Card Factory Share Discussion Threads

[riverman77] 10/6/2024 16:28

I'm thinking more about LFL growth, but agree opening new stores is another route.

[rmillaree] 10/6/2024 15:52

the fact they have very specific forecasts suggests they should be able to answer your question here riverman77 - does the 90 potential new stores not get most of the job done in that regard?

[riverman77] 10/6/2024 15:40

If growth is going to come it will have to be through gifts, as can't see a lot of growth in cards. Gifts are lower margin of course, but potentially a big market.

[rmillaree] 10/6/2024 15:33

"I think some get a little hung up on growth."

the problem is that if they are opening new stores and have specific targets they need to hit - ref this 650 mill and 14% margin then they could be making a rod for their own back here . Extra costs may be very "fixed" and upfront if its spend on new stores - so presumably sales growth needs to flow through as expected for them to "be on track" -

its never pretty when one spends the cash opening new stores to find out they dont deliver the expected cashflow bonanza.

Not saying they will fail - simply that they are generating the narrative that they will do the £650 mill sales by ye 31/01/2027 and that means they NEED to deliver that growth - if we expect promised profits . In some respects your comments that they should concentrate on margin is the opposite of what they are looking to acheive - clearly they have sales targets that are fairly ambitious. imho £650 mill is a big ask for 2027 if we only expext 576 mill for 2026

[everton448] 10/6/2024 15:20

Price rises implemented in H1 I think

[darrin1471] 10/6/2024 15:18

Added a trade at 92p to my holding.

I think some get a little hung up on growth. CARD are doing a bit of internationally expansion which will be at lower margins than the mature UK shops.

CARD should concentrate on margin, FCF and dividends. Which I think they are.
The consensus forecasts I see have dividends down as 3.7p, 6.4p and 8p for the next 3 years

[riverman77] 10/6/2024 14:51

One thing I noted from looking at the FY results again is that YoY growth was very strong in H1 but by subtracting the H1 numbers from the FY numbers, growth appears to have slowed significantly in H2 - haven't looked into the company closely enough to understand if there's any reason for this loss of momentum. The fact they mention a H2 weighting in the last update suggests momentum could be struggling a bit?

I am tempted to buy at these levels, but still put off by their complete lack of investor relations - no broker notes on Research Tree and they never appear on platforms such as Investor Meet Company.

[rmillaree] 10/6/2024 14:26

on top of other items is the weakeness here not simply a follow on from the confirmation that earnings growth this year is expected to be very much h2 weighted - in which case its likley the newsflow till they "deliver" aint likely to be great until quite late in the year - plus with h2 weighting there are those that may speculate that they are perhaps more likley to miss targets than beat. None of this means anything is amiss but if near term news is likely to be promising jam tomorrow thats not the same as jamy rolly polly with custard now.

[chester9] 10/6/2024 13:52

I agree they are operating well, getting better on line but I don't agree with supporting the IT illiterate with purchase equipment devices in store as the labour cost would wipe out the profit let alone the IT plus the costs of devices.Customers need to be able to do it for themselves at home or on their phones. That needs well written software. That makes it cheap and easy and keeps staff in stores just taking money.

[rubstick] 10/6/2024 13:19

Who says they are doing anything wrong? Numbers look pretty good to me!

[blueclyde] 10/6/2024 12:36

This imo is where Card is going wrong. We just assume that it will only be old folk that go in and try and make the custom cards. It is so ingrained in everyone's thoughts that nobody under 60 goes into a Card Factory store that nobody is open to the possibility of up selling the digital side. That's where this investment falls down.

[chester9] 10/6/2024 07:56

Have a look at Narf if you like that idea their investors video just gives the tip of the iceberg on the dark web war that is being fought right now but is hardly discussed on media. Hope CF have their system protection bang on, though I accept they are not such a target as digging secretly into PLC accounts to get the results before the city or shutting down NHS systems for ransom.

[kaos3] 10/6/2024 07:50

i would hire a kid with a track record, agree a budget with him. than give him double that amount and certain card organisation assets (after reasonable explanation and agreement) - to attack moonpig.

corporate old farts are evolution, low risk and highly profitable but

certain action can be done by youth revolution mostly.

it just is that way

imho

[chester9] 10/6/2024 06:19

The best way is to get apps and web pages to be super simple, they have made good progress but more to do.I agree that the marketing is low impact by comparison with moonpig and funky pigeon. It's a big no to machines in store as it would put labour costs and equipment costs too high.Imagine standing by a person that is not tech savvy needing 20 minutes help to send a card. With min wage that's £3.50 in time.

[blueclyde] 09/6/2024 23:00

Yes that's my point. Card should be cross selling the online element and eating Moonpigs lunch. There should be signage / machines in store where you can up load pictures ect for custom made cards. Just when I saw that tweet you see how bad they are at selling themselves. They have only just removed the Covid stickers from my local stores floors for example. It would not be hard to unlock more potential.

[bbonsall] 09/6/2024 21:33

bluecycle
Yes indeed Moonpig has a much higher market cap than CF.
But CF makes much more profit and creates much more free cash flow and has a much higher EPS than Moonpig.
Therein lies the evidence for the vastly undervalued shares of CF
CF is a much more financially successful company than Moonpig.

[rubstick] 09/6/2024 13:33

However you look at it seems to me Teleios have destroyed their own market in the short term. A placing would have been much more efficient. Markets like transparency and frankly even if they don't plan to sell another share without transparency a lot of investors still expect them to. That alone takes away the investment case in a market with plenty of opportunities.

[blueclyde] 09/6/2024 11:59

What I am trying to say is that Moonpig has a higher market cap that Card despite Card having the capability to do the exact same online custom cards ect. This is a complete failure to cross sell what they do on social media and create retail spaces that appeal to everyone. They could easily just follow the Paperchase look without the silly prices to engage with young people.

[podgyted] 06/6/2024 23:59

The norm if a major shareholder wants to considerably reduce its shareholding is a secondary placing.

Don't get me wrong, this will be done at a discount so its painful to holders, but it gets the situation out of the way, at least for a while, and normally the share price recovers. Often involves a tie-in for the remaining shares which equally gives some stability.

What is strange here is the continual slow reduction in their holding given nothing obviously wrong with the company. This leaves willing investors (II and PI) with the problem of when to invest as a steady stream of sells will depress the price or keep it going sideways. This is more of a problem when a lot of the UK market is under-valued - why invest here when there is a major holder which seems determined to depress the price for who knows how long?

[tradertrev] 06/6/2024 08:23

bbonsall - if you don't understand why the perceived overhang of a 10% shareholder, who is known to have been selling, bears down on the price of an illiquid small-cap share, then I gently suggest that small-cap investing is not really appropriate for you.
Teleios' reticence as to what they want to achieve is almost certainly hurting their cause. If they set a level they want to sell at, it would be possible to organise a group of buyers to take them out completely, even at a modest premium to the current price. People buy when they are confident they are removing the overhang. They don't while the overhang is present.
This is small-cap broking 101.
Car Factory themselves could help this process significantly by joining in the buying group.
I have a worthwhile holding, showing a decent paper profit, but am very frustrated by how "stuck" this share is.

[bbonsall] 05/6/2024 20:36

I do not really understand why someone like Teleios with a holding if 10% they might or might not want to sell can have so much influence in holding the share price down.
Surely CF financial and business performance should have far more sway over the share price
Forget prospects for growth or declining demand for cards. The actual published performance deserves a share price closer to £2 right now. That’s a known fact. If the share price were to properly reflect performance Teleios could sell at a higher SP, why does anyone care?