Card Factory Share Discussion Threads

[actscap] 08/1/2024 13:50

Supreme (SUP)

[arab3] 08/1/2024 12:25

what is your largest holding ACTScap if you dont mind me asking ?

[actscap] 08/1/2024 12:08

Full disclosure, Card is my second largest holding and as a long term holder I have every confidence this will rise significantly from here. Two main catalysts being It has suffered the fate of many profitable cash generative UK small caps in a clearly undervalued market. A rising tide should raise many UK small caps from current levels (many with mid single digit forward PEs). It has significant growth potential (gifting, partnerships, overseas expansion) underpinned by an excellent management team. Worries include:Increase in cost of postage Minimum wage increases introduced in 2024 Expansion risks / expansion yields materially lower payback than expectedOnline foothold Footfall and general retail volume

[actscap] 08/1/2024 11:54

I think it's fair to note the fall in foot fall with the likes of next, JD sports, etc. I recognise they operate in a different consumer segments but if less people are out and about on the high street there may be some read across to customers popping in to card factory to pick up items. We know footfall has decreased in some weeks in Q3/q4 2023 Vs 2022 but not materially so (see footfall stats in https://www.ons.gov.uk/economy/economicoutputandproductivity/output/bulletins/economicactivityandsocialchangeintheukrealtimeindicators/9november2023). These stats don't include December so difficult to assess overall impact. The next and JD updates are useful tho and may provide a bit of context why this has flat lined over the last few months.

[mindminer] 08/1/2024 11:07

The fact that other retail has slowed down is a non-issue and is more or less expected.
All the diamonds in the rough have had stellar performances as consumers seek quality and value.
CARD is one of the diamonds.
The cream is rising to the top.

[casholaa] 07/1/2024 14:12

Harry, it's not that sort of retail

[omron] 07/1/2024 14:08

Harry - I understand your caution but in my view, spending 120pounds on the latest Nike tracksuit top at JD Sports is discretionary spend but buying your spouse/partner/parent a card at Christmas is not.

[harry_david] 07/1/2024 13:58

darrin, thanks for the comment, it is definitely punchy and one hopes the last three months have borne out this performance. My only question would relate to the general retail and footfall slowdown others have reported since the beginning of October, let's hope Card have marched on anyway.

[omron] 07/1/2024 13:45

A full year dividend of 7p would represent a payout ratio of 40-45% on 16p eps which would be in line with previously disclosed policy. On a share price of 177p that is a yield of 4%, ahead of the FTSE 250 yield of 3.5%. It would be added back into the FTSE250 and various ETFs would have to buy in again...happy days!

[omron] 07/1/2024 13:22

As a sense check, that ebitda increase should take the eps to about 16p and a share price of 177p would represent a PE ratio of 11x. I am not suggesting it will get there immediately what with Teleios still selling down but a positive result on Tuesday could see Teleios cleared out and if there is positive news on the dividend could start the re-rating.

[omron] 07/1/2024 13:15

Ebitda at H1 was gbp7.3m ahead of prior year. Prior year ebitda was gbp112m so even a flat H2 ebitda performance would lead to gbp119.3m ebitda. I am expecting more like gbp125m ebitda. At a modest 6x ebitda this equates to gbp750m enterprise value and once leases and net debt of 100 and 30 are deducted it suggests a market cap of gbp620m. There arec350m shares so that suggests a share price of 177p. At 101p it looks massively undervalued to me.

[darrin1471] 07/1/2024 09:24

Old story but I can't remember seeing it posted here: 04/10/2023

Cardfactory’s coo Adam Dury shared the value retail giant’s data which is gained from its annual survey of 4,500 respondents, now in its sixth year commissioned through Dynamic Data, where “we’re not far off an 80-20 mix between stores and online”.

He added: “We know our customers have found things tough, but celebrations remain incredibly resilient. Our view of the UK retail market, is that we believe it’s worth £1.4bn and we’ve had a view that the markets about £1.4bn for a couple of years and for first time ever, all three views from the GCA, Kantar and ourselves have come within about £80million of each other.

“We believe that 40m UK adults buy greeting cards per year, last year that equated to 73% of the nation, this year it’s 80%, again, reason to believe that more people are engaging with this category across the entire industry.”

Explaining that Cardfactory manufactures 160m cards each year in its Printcraft facility, which are sold across its 1,032 stores as well as the online shop, Adam said sales wise, the retail group now has close to a 50-50 split between cards and gifting but this will probably grow gifting accounting for 54% within three to four years.

“Cards are super important,” he said, “but it’s also important you have the gifts to go with it. The whole gifting market is worth £13.4bn in the UK,” although Cardfactory is looking at a £10bn market as that covers relevant products such as soft toys, confectionery and speciality.

And the retailer has identified a clear opportunity with the younger generation, with Adam showing a slide which he described as “telling us that the younger audience are really into cards” and adding that he hoped “lots of eyes will open with huge reasons to believe, lots of optimism, a huge positivity”.

Adam added: “The 16-to-24-year-olds now have the highest cards per buyer rate, and that’s been a continuing trend since 2020. We as a business and we as an industry have a huge responsibility to work with this group and help when they come on the card journey.

“There’s clearly probably three life stages in there, secondary education, possibly university and first stages of a family, we work with that group now and think about what they’re telling us, ‘I like people to know I’m thinking about them,’ and this is their words to us, ‘a card is more personal than an email or text’ – must remind my 13 year old, because I’m sure he’s not quite there yet – ‘cards can be a keepsake for special occasions’, and ‘this is a nice way to connect with people’.

“As feedback from that age group, it’s just another brilliant reason to believe in the industry. The headline message is that we should look ahead with a huge amount of confidence.”

[fruitninja84] 05/1/2024 18:14

https://youtu.be/ttrTusiNcjE?si=NbMf3xjx_AMKGr6EFrom about 1:20

[mindminer] 05/1/2024 16:36

NEXT is irrelevant IMO
CF is completely different proposition

[chelseamann] 04/1/2024 12:33

last 3 years of trading updates in Jan were 10, 13 and 14 respectively so it seems very likely that the trading update will be sometime next week, but nevertheless cannot understand the sheer yo yo of this over the last 2 months but still fully believe it to be well undervalued.....good luck everyone

[darrin1471] 04/1/2024 11:20

Beeks Happy New Year.
Next trading figures shows growth came from online rather than the high street and retail parks. Next volumes are down as figures include price inflation.
Figures are versus last year when Royal Mail strike caused problems with couriers and general public went to the shops rather than buy online the week before Christmas 2022.

[premium beeks] 04/1/2024 09:12

Topps Tiles.: 4% decrease yoy.About as relevant, but doesn't support the bull case eh?

[premium beeks] 04/1/2024 09:11

Have next started selling cards?

[darrin1471] 04/1/2024 07:47

Next:
Online Q4 +9.1% H2 +7.7%
Retail Q4 +0.6% H2 +0.0%

[fft] 04/1/2024 00:20

Trading update was 10th January last year. So, any time next week would be when I expect one this year. Not long to wait !

[bbonsall] 03/1/2024 17:31

When you remember that the share price never dipped below 40p when CF was losing millions, the shops were closed and the lenders demanded that a £70million cash raise was needed! That was avoided when the bankers saw how much cash CF was generating as soon as the shops opened again.
Illustrates how grossly undervalued CF is now.

[hatfullofsky] 03/1/2024 16:50

- Yes, but the problem is, and has been lately, that the Market hates this share. Despite all the 'ahead beats' -I expect that to change very soon

[casholaa] 03/1/2024 15:32

@eeza, I disagree. You need to take into account that card gets lumped-in with the 'retailers'. It is 'retail' but it's also different as cards are given throughout the year. Also, no divi yet.

[bbonsall] 03/1/2024 15:07

The market might change its mind when dividends start rolling in this year?
Was in Burton on Trent yesterday in the pouring rain! There are two CF shops in separate sections of the mall. Both shops had queues at the tills, a different brand of card shop was empty!

[eeza] 03/1/2024 15:03

Yes, but the problem is, and has been lately, that the Market hates this share. Despite all the 'ahead beats'.