Card Factory Share Discussion Threads

[ggrantsu] 07/2/2024 16:15

nothing emotional about it, but thanks for the opinion.

i tend to view a company trading at a massive discount to any notion of fair value not as something emotional. you seem to want to try and time this perfectly in terms of Teleios getting out of their position...fine. i respect that and hope it works out for you.

i just simply don't care if this gets worked further down...the downside is probably 10/15% from here, maybe more i guess. but the upside to fair value from here IN MY VIEW is 80-100% and this is a company performing extremely well in a sector where that is not the case across the board.

there's no dissonance, I just don't care about the share price downside as a result of the seller in the short term.

[premium beeks] 07/2/2024 16:05

Far too much emotional attachment and cognitive dissonance here at the moment.

[ggrantsu] 07/2/2024 15:56

sometimes mr market throws up the most clear obvious gifts...he gives with both hands in abundance.

this is one of those instances...i take the point from elsa about how this could be walked down all the way to sub 80...but buying at 90p is free future money in my eyes. business is now sub 6x for a company that blew it out the water in UK retail through december / november when uk wide footfall figures were in the toilet. high barriers to entry and an exodus of the rest of the (poor and high priced) competition.

buying with both hands - am of the strong opinion that i'll wake up in 5 years and be smiling.

[vaston] 07/2/2024 15:01

SYME IS NOW READY TO FLY

[hardupfedup] 07/2/2024 15:00

hi elsa where do you glean your info for teleios
Regards

[bbonsall] 07/2/2024 13:58

Elsa

As you say, what a fantastic return someone could make if they had £300 million to invest. Where else could they get 20% return?
Lookout for a takeover, how tempting is this stupid valuation?
Twice the price would still yield a massive 10%

[casholaa] 07/2/2024 13:35

They have to take this into the 40s to shake them out of me.

[elsa7878] 07/2/2024 13:27

As of 17 Jan Teleios are down to 38 million shares. They have sold 2 million recently. Until we find buyers that will pick up those shares then the share price will keep being walked down. Eventually the market will find the clearing level. Will it be 88, 85, 80? Who knows. I'm adding as it drops and will buy a lot more when I see their stake has been placed. In the meantime you'll just have to accept it. £62 million pre-tax on a £300 million market cap. Ridiculous hence happy to add in tranches.

[bbonsall] 07/2/2024 13:07

Curiouser and curiouser!!

[premium beeks] 07/2/2024 13:07

I doubt you'll get poor from that trade.

[omron] 07/2/2024 13:03

I have added more today

[premium beeks] 07/2/2024 13:03

I responded to another user that it was more likely to go to 90p after results than 110p.

[casholaa] 07/2/2024 13:00

@Beeks, I thought you previosuly mentioned that you were looking for 90p entry????

[casholaa] 07/2/2024 12:59

They should have rns'd re-payment of Tranche 'A'.

[premium beeks] 07/2/2024 11:46

You don't even want to consider what may happen if it goes sub-80p.

[premium beeks] 07/2/2024 11:40

Caveater - companies generally look to run their businesses and create value for investors. Concentrating on the former is better than the latter for longer term considerations.I've pencilled in those chart bottoms at mid 80s for a re-entry point.

[caveater] 06/2/2024 23:05

Yeah but bounce to where.....would be nice if it bounced to 160. We need info from this company. Can't understand why the radio silence. Aren't they bothered about their investors?

[casholaa] 06/2/2024 18:17

Well, now you've got me thinking that even at 160p, it's a bit cheap. There hasn't been a year where I've not sent/received cards. Also, from a amateur trading perspective, I expected that this would bounce at 88.90p-89.90p upward. Let's see if I'm correct (which is rare).

[omron] 06/2/2024 17:17

Casholaa - I tend to focus on net debt rather than gross debt and I would have thought that net debt at the year end is c30-40m at most. The RCF is often misunderstood and is effectively an overdraft facility to help fund the working capital swing around the build of stock for Xmas.

[casholaa] 06/2/2024 16:48

Thank you. I have no problem with them having some debt. I'm not sure I've seen any business without some form of debt to help them maintain operations and agility.

This is from 'This is Money' website dated 7 August 2023 - "Card Factory eventually agreed to a new £225million refinancing deal that comprised a £100million revolving credit facility, £75million loan and £50million through various Covid-19 loan schemes" Also for those that don't know, "Coronavirus Business Interruption Loan Scheme is CBILS"

I recall the nonsense that was being banded about in relation the misunderstood 75m a while back.

By my (out-of-date)estimate, they should not currently have more than 86.6m of gross banking debt -they put the loans and cbils down with banking debt in the interims to 31st July 2023. It is worth noting that Tranche A was costing 5% in interest and Tranche B is/was costing 5.5% in interest.

Interestingly, of the 60m rcf, they only had 33m undrawn as at 31st July 2023. Also, Tranche A was repaid in 6 month intervals at 2.2m and 4.4m. I'm guessing that the rcf could assist them with Tranche B if needed.

[omron] 06/2/2024 16:03

Casholaa - there is no need to eliminate all of the debt and they have stated they want to maintain an efficient capital structure by which I interpret as some debt. Everyone has different attitudes towards leverage (especially after COVID) but I would be comfortable at up to 100m of real (non lease) debt on this business. Roughly equal to 1x pre IFRS 16 ebitda.

[casholaa] 06/2/2024 15:55

@Omron, thank you. I was hoping that someone on here would chip-in. I agree, that's a massive share price + divi potential and I don't think that it's wishful thinking. In my mind, any divi would indicate a resumption in normal service. But I bear in mind, that they indicated divi cover of 2-3x, so eps of 13.4 would in theory within the range of 4.47p-6.7p and 5.59p being in the middle. Personally, I wouldn't mind 4.5p divi as long as they set some money aside for Tranche B, which I think is due next calendar year.

[omron] 06/2/2024 15:35

Hi CasholaaThe half year results made reference to 8m of tranche A debt outstanding which was due to be repaid by 31/1/24. Given they had 22m of cash then (Sept 2023) and as announced on 16/1/24 have traded well over Xmas (so generated more cash) you can be pretty sure the A tranche is gone. They said they wouldn't consider dividends until the FY25 (which began on 1/2/24) - so now. They confirmed full year PBT expectations at the top end ie 62m so tax that gives 46.5m (using 25%) or eps of 13.4p. A payout ratio of 40% suggests a dividend of 5p - which I expect to be announced with the full year results in April. Meanwhile a modest PER of 12x on 13.4p is 160p - outstanding value when you can buy the shares at 91p

[casholaa] 06/2/2024 14:40

Is it time to play guess the bounce level???

[darrin1471] 05/2/2024 18:21

I bought back in after 4pm today.