Card Factory Share Discussion Threads

[omron] 29/10/2024 14:18

Hi Fenners both the H1 2024 and H1 2025 would have had the employer nics in and so the 9.8% NLW only explains just under half of the 20% labour cost increase. I accept they opened a few more stores - was it as much as a 2% increase in store numbers? That still leaves some 8% increase unexplained. I am very comfortable that they have headroom to offset any NLW and employer nic increases through pricing given their pricing relative to the competition and because their customer base will be getting the wage increases and so can afford more.

[fenners66] 29/10/2024 11:50

Omron - because the NLW went up most of that additional cost would have attracted Employers NI which was 13.8% on top. Then if they actually pay a pension contribution (they should) that would have gone up too, so the increase costs more than the increase in the NLW.

Are you missing the line "overall increase in our store portfolio" as well ?

However you are making the same point - their costs are difficult to manage when they are dictated by outside events.
Now its being touted as a potential 6% increase in NLW + 2% to Ers NI + NI on Ers pension contributions - my calculations have that costing 8.1% for someone on NLW...

[omron] 29/10/2024 09:23

Fenners - if you look at the 1H results labour costs went up by 20% whilst NLW went up by 9.8%. The unaccounted for additional 10% increase was £5m - the same as the ebitda shortfall. So something else was going on.

[fenners66] 29/10/2024 09:16

Omron
"Fozzyb - as they are so much cheaper than the competition they are able to increase prices to protect margins - "

You are ignoring the last results with which Card blamed the increase in NLWage as the main reason for the massive fall in adjusted PBT - "HY25 Adjusted PBT was down £7.6 million to £14.5 million, reflecting substantial increases in National Living Wage, "

"Direct wages, including store and warehouse colleagues, include a minimum 9.8% increase in National Living Wage from April 2024 in addition to the impact of an overall increase in the size of our store portfolio. As a result of the increase in National Living Wage, store and warehouse wages increased as a percentage of sales which has contributed to the reduction in Gross Margin."

Whilst the next increase is not until April (unless the govt changes that) so they can try and manage the second half , the increase sets up another round of this next year.

[thebears1] 29/10/2024 08:42

Maybe for WH Smith

[chester9] 29/10/2024 08:01

Card has raised their gross margins 28%, 32%, 35%, 36% in last 4 years. This year it's harder, wages and dist up 21% in H1, but they run a tight ship. Still waiting news on US and Australia and if I were card I would get this week out of the way. Then bring us some positive stories.

[garycook] 29/10/2024 07:51

Surprised CARD is not taken out, especially now, at around current price !

[omron] 29/10/2024 07:40

Fozzyb - as they are so much cheaper than the competition they are able to increase prices to protect margins - especially if their customer base has just had a wage increase. The issue is for the mid market players like Clinton and Paperchase were.

[fft] 29/10/2024 07:16

This, and the NIC changes, do make the boards efforts to expand overseas even more important. It will be very interesting to see how big a step they intend to make in the USA and Australia. Easy to see those countries being far more profitable than the UK.

[premium beeks] 29/10/2024 07:06

I presume like all sane leaders, CARD are not reacting to speculation, awaiting the budget to then take action.

Any corporate will have a spectrum of actions lined up based on risk.

Let's see what they do.

[fozzyb] 29/10/2024 06:50

So now we hear 6% on minimum wage being touted and minimum wage must be 2/3 of median wage plus the employer NI costs. CF clearly blamed last results on wage inflation. They have no insulation from this without reaction on pricing to compensate to protect their margin

[peddlers] 28/10/2024 21:17

WorldQuant starting to cover their short position

[bigbigdave] 25/10/2024 12:54

Had a few on that volume

[premium beeks] 25/10/2024 12:52

I think so

[premium beeks] 25/10/2024 12:45

Is that our seller out of the way today?

[davius] 25/10/2024 08:44

> Blackhorse2324 Oct '24 - 23:49 - 6898 of 6898
> Overvalued stock! Could drop below 50p easy

So could VOD.

Here's the AI view on card, rather more intelligent than you're one liner.

As of October 22, 2024, the broker consensus for Card Factory (CARD) is neutral or buy. The overall consensus recommendation for Card Factory is also buy.

The median 12-month price target for Card Factory PLC is 175.00, with a high estimate of 200.00 and a low estimate of 125.00.

Card Factory's H125 revenue growth demonstrates that it is delivering well against its multi-year growth strategy.

Management is confident Card Factory will achieve its full-year estimates.

Peel Hunt Limited indicated a 26.3% potential upside for Card Factory PLC.

[blackhorse23] 24/10/2024 22:49

Overvalued stock! Could drop below 50p easy

[bbonsall] 24/10/2024 20:52

The recent rise in postage costs was for first class stamps only. I doubt that many send cards by first class postage.

[premium beeks] 24/10/2024 20:51

I can't see that affecting the card sending types. They'll just move to 2nd class stamps if needed which haven't risen in price.Suddenly after a mild warning not related to sales, the sector is heading for the dogs. Meanwhile a profitable company that has lost some investor confidence. Advisors will be fuming, major shareholders knocking on the door: I wouldn't expect the board will want to be seen lacking in Q2.Back at well below the price that the major seller was out at, it really does seem a steal here, sans major surprise in the budget.

[pugugly] 24/10/2024 20:38

elsa> Feedback much appreciated.

[elsa7878] 24/10/2024 19:04

Have been to my 2 local stores. Staff said there had been some comment on stamp cost and therefore reticence to buy cards but it was only from a few customers. On the other hand gifting was going really well, including a toy range that sells for £10 plus. Thought >£5 might be a struggle but apparently not.
I've been buying recently so hope they're right. The reaction to the "in-line" (apparently!) results has been excessive leaving a lot of room for marginal disappointment.
Curious that since the results there have been circa 70 million shares traded but no RNS.

[pugugly] 24/10/2024 18:53

With Skype - emails - and social networks coupled with the massive increase in the cost of postage the macro economy is not in favour of card usage.

Anyone got any hard data on volume trends?

[bbonsall] 24/10/2024 18:20

Plummet is a strong word!
If it “plummets̶1; it is at risk of going below its low of 50p when all shops were closed and it was loss making, in danger of going bust and in danger of needing to raise £70million.
Instead it is profitable, cash generating, debt reducing and paying dividends of over 5%. Whatever the budget it will not be loss making that is for sure. Just fretting over whether it will make £35 million or £50 million profit. What a tragedy!
The market needs to put things into perspective here.

[grahamytrain] 24/10/2024 07:33

Yeah and it may plummet further between Budget and November news. Surely an increase in CGT rates must be priced in by now!

[chester9] 22/10/2024 13:57

Next week brings up 4 weeks for US and Australia news, bottom being formed despite Rachel possibly up to no good. It's looking like get the 30th news gets absorbed/understood and then off we go. When to buy more? I think we will all have the radio/tv on for this one, but it may move before.