Card Factory Share Discussion Threads

[aringadingding] 28/9/2021 16:32

rmillaree, by incentivised they are referring to the £5m fees for missing (what is nonetheless described as) a "pre" payment.

Indeed there is an accounting concept of pre-payments but this is different really. Here pre-payment is being used like an overpayment on a mortgage. Often you have the flexibility to overpay say 10% of a mortgage balance in a year, which you have the right but not the obligation to do. Here, they have the obligation to pay actual scheduled repayments. They don't have the obligation to make pre-payments, strictly speaking, but in practise they probably want to otherwise they will have to pay £5m in penalties.

The market seems to have reacted badly to the trading update! I'm a long term holder anyway. Moonpig is also down today so maybe that's related.

[fenners66] 28/9/2021 13:12

On top of that the last CEO's strategy was criticised as having a scatter gun approach to opening new shops .
Now we have reduced footfall and sales per store AND a plan to open 100 More shops.

It's more of the same.

[fenners66] 28/9/2021 13:10

aringadingding

In the context they raised of making the online offering a growth engine - expecting 20% of £600m a year in 5 years - after pre-covid saying they were going to shut it down as it was not delivering; they choose to highlight vs figures 2 years ago!

The migration of clients to online , whether existing clients or new , is now the stated aim.
So after a year in which the shops shut and that migration started to online , now they chose to highlight 2 year growth instead of 1 year shrinkage !

If you had done a good job of capturing your chosen target market , a la Amazon , last year , you would HAVE to expect that was the start of the growth. Not the end of it.

Because they have retained some of what they gained is not to be trumpeted its to be ridiculed as the strategy they turn to has gone backwards already.

That's why I hate the spin , the figures are just below the paragraph , its obvious.

WORSE the target growth is also going to be Non-cards the part of the online offering that shrunk most - 20% !!

I want the reports to just face facts and stop looking around for ways to window dress/spin bad news as good.

[rmillaree] 28/9/2021 12:28

"By "pre-payments" I would assume these are simply scheduled principal repayment events with consequences if missed, but because those consequences are not default they are called pre-payments."

I think its more likely that there is some agreement/or likelyhood that payments will be made ahead of the "scheduled due date" as they said the following

"The facilities are structured to incentivise an early reduction of overall debt,"


hxxps://www.investopedia.com/terms/p/prepayment.asp
What Is Prepayment?
Prepayment is an accounting term for the settlement of a debt or installment loan in advance of its official due date.

Based on what this website says it looks like the term has/may have been used in the correct context - however this is a non UK website (us facing primarily?) so i will sit on the fence slightly as to whether the form of english used in right or wrong - i wouldnt presume its wrong though.

[aringadingding] 28/9/2021 10:51

fenners66, I am open to what you are saying about misleading representation of data, in general, however might you be able to flesh out what you are saying a bit more or give more full examples?

To me, to compare a fully post covid time period with a fully pre-covid time period is fair enough. You have chosen yr-on-yr to be a more appropriate measure but I don't think that is valid because each of those years is a differing portion of in, versus out, of lockdown.

By "pre-payments" I would assume these are simply scheduled principal repayment events with consequences if missed, but because those consequences are not default they are called pre-payments.

[fenners66] 28/9/2021 09:08

Then the online commentary starts with

"Online sales performed strongly compared to HY20, i.e., pre-COVID-19"

But of course online was DOWN 10.3% Yr on Yr with their "Getting Personal" gifts ominchannel growth engine down 21% !!

I have always hated reading such awful useless spin when looking at the "facts" of financial results.

It says they think their audience is lazy or stupid and will read the start of the paragraph and miss the facts !

As if AMAZON is going to be comparing this years sales to the online numbers pre-covid !

[aringadingding] 28/9/2021 09:04

I think the company is very solid. Shops selling low cost greeting cards. Hard to imagine anything more solid and repeatable than that really, if managed well.

With regards to multi channels and multi products. I think this is a case of 'why not' really. I mean they might as well try some of these ideas to see if they work. They have the brand recognition from the high street so if somebody wants to order a load of balloons, banners etc. for a party, then they go online to do that, then recognise the card factory branding... why not really I can see that working well and being very low cost to deliver. It's just selling stuff online really.

With regards to the £5m penalties... yes I am sure these fees are best avoided. This is back to the old question about what "subordinated" means in the RNS "trading and refinancing update" from 21 May. But as per previous number crunching, even if they did raise the full £70m as new equity share issuance, I don't think the dilution is particularly bad for the ongoing financial prospects. It's a tricky one really. If they end up raising 50% from shares and paying 50% from free cash, well is that better than just taking a big hit of £70m early on?... hard to say.

Generally though I think the share price is massively depressed just due to these outstanding issues. It's like people panic buying petrol for no real reason. It's what we are like as humans we are much more focused on risks and downside than upside.

[kaos3] 28/9/2021 08:17

what I like:

- 600 mil rev in 2026 - they have the mood
- stability of the business - superb one
- words - scalability and unique business model integration
- growth markets are huge - all 5 eyes nations are there for a grab

what I wonder:

- they needed years to find out - they have to use better distribution/selling omni (a fancy word for a professional sounding impact) channels to the existing ones - it takes several highly paid brains to figure that one - my kid could give them such an advice for free)

- what is their pricing strategy - they could be "milking" some more margin imho
- report their figures against the market - market share and margins comparison
- each "omni" channel margin

what I am afraid of:

- spreading to broad into gifts and parties - short term profits are not that important - also in the gift markets they should have a PROFILE (I do not want CARD to end up like china shop)
- persisting on their own internet channel if they are not able to do it alone
- "....with fees of up to GBP5m payable if pre-payments are not made in line with specified dates by 30 November 2021 through until 30 July 2022...." - meaning that after the start they have to come up cash for the debt installment each month or they get 5 mil trigger fine - meaning - they have no time to sort out the debt till july 2022 - it is on "as we go" basis -they will have to act in some way sooner than I thought

when I sell some carrots I ll be buying more of CARD

[longwell] 28/9/2021 07:37

Solid results, will take time and no dividends for a few years , on track to be a Solid ,safe investment.

[aringadingding] 27/9/2021 17:50

Not a bad rise in the share price today in advance of "interim results for the six months ended 31 July 2021" tomorrow. Could do well tomorrow if the interims give the impression of financial performance being back to normal coming soon.

[makinbuks] 23/9/2021 17:24

And you're way off topic

[bountyhunter] 23/9/2021 11:30

you missed out the fact that 53% of production is in Russia sold at a fixed price

[jwilkes1] 23/9/2021 11:23

One that some of you would do very well to monitor is JKX because of whats happening in its end market. Produces natural gas which is the hottest commodity about, all over the news and prices are ballooning. For context , last qtr (April to June)the average gas price was around 7,000uah, it’s currently just below 29,000uah ! Jkx Earns $700 per 1000m3 gas, they sold 120m in h1. At current spot prices they are making over $40m a quarter. They have no debt and current market cap is a paltry £75m. Production is around 9,000boepd. Really starting to re-rate anyway as trading on ev/ebitda below 0.7x and at spot prices ig on a PE ratio of around 1x!

[roxburyhouse] 21/9/2021 06:17

Encouraging.

hxxps://news.sky.com/story/amp/staycation-boost-for-high-street-as-footfall-improves-in-august-12397186

"On the basis that nothing untoward occurs and restrictions are not put back in place, it appears to be a reasonable expectation that by the end of the year footfall will be just 10% to 15% below the pre-pandemic level."

[aringadingding] 20/9/2021 11:02

kaos3 you are being pretty harsh on yourself there.

What % of the UK's population is budget constrained, in the sense that they have to make difficult trade offs between what they decide to buy and are very price sensitive? Maybe 70%?

I am pretty skeptical about the online market for buying cards. I am a bit of technophobe but I don't think I'm the only one. People like to receive a physical card with a hand written note or even just name hand written inside, and it's a heck of a lot easier to just pop into a card factory branch or a concession inside a supermarket to get the cards you need. This company's physical store proposition is to deliver the meaningless bit at the lowest possible cost so allowing you to add the meaningful bit yourself i.e. the written note.

Silly investors get caught up in hype. Good investors look for downside risk protection and the prospect of long term gradual profit growth and potential for re-rating. In three years either this company will have gone bust or will be doing fine again.

[kaos3] 17/9/2021 09:37

CARD product is sold to a retail emotional driven buyer

not to a rational emotionally cold middle aged calculated stingy logical man with silver rimmed glasses with no sense for humor ideas fun and joy - me?

who is in the driving seat @CARD - my type serving my audience or the the other #UNICORN#FEEL#FUN type?

[bbonsall] 17/9/2021 08:30

Card Factory app is excellent. Personalisation is easy and included first class delivery is faultless. All this for less than you would pay for a standard card elsewhere.

[kaos3] 17/9/2021 07:40

moonpig is engaged with vino in online - they have the drive, energy, are going places - and card ? more of the same? optimization of the balance sheet with the debt etc

[bountyhunter] 14/9/2021 18:00

..................Tue 28 September 2021: Interim Results for the six months ended 31 July 2021: Tue 28 September 2021

[bountyhunter] 14/9/2021 18:00

..................Tue 28 September 2021: Interim Results for the six months ended 31 July 2021: Tue 28 September 2021

[kaos3] 29/8/2021 08:22

"
Use Relative Strength to detect significant changes in a stock's performance relative to the market.

In particular, I like to use 10 and 20 week moving averages of Relative Strength. Relative Strength is particularly useful when buying into recovery stocks or when considering sales of long- term winners. The larger the market capitalisation of the stock the more useful Relative Strength is. For small cap stocks, price movements are too erratic and random for Relative Strength signals to be reliably useful."

[kaos3] 28/8/2021 15:18

1. new well informed buyers seem to have no angst in refi thing - hence they buy. and there is their capacity to help
2. UK might be saturated - but in Oz, Canada, US .... there is a huge market
3. Aldi with whom CF has a deal - has lesser CV19 restrictions (food) than its own shops - and there is the internet - so CV19 should have limited impact. and there was governmental help
4. maybe a small equity raise at this levels would sell quick and push the cash flows (going for the web business) with less than 1 year ROI - improving all kind of numbers (BS, market share, revenue growth, margins etc...) to get better negotiation position with the lenders (if there are no restrictions)
one needs balls sometimes imho

[fenners66] 28/8/2021 13:55

cardf , but might be confused with south wales.....

Its sad but probably true, that Card Factory is TOO long for most people to type into google...

the human race gets closer to the fiction of WallE every year...