Card Factory Share Discussion Threads

[monet] 05/11/2024 21:57

CF is not big enough to partner with Walmart

[bbonsall] 05/11/2024 17:34

Another stimulus might be the announcement of who the American partner is. Must be quite a big actor that covers all the States, Walmart??

[omron] 05/11/2024 17:01

Junebug - there is no huge liquidity in this share and I think shorters have been pressuring the share price on fears based on the disappointing interims and the impact of the budget. What I think could move the share price up quite quickly would be Brett Blundy disclosing that he has increased his stake at these low levels. That would be a vote of confidence.

[bbonsall] 05/11/2024 16:37

Car1pet

The dramatic fall to 31p in May 2020 was due to the lockdown and the closure of all stores. So CF was unable to trade and became loss making with a fear of bankruptcy.
Since stores reopened CF quickly recovered revenues and its well known ability to generate cash. So much so the banks dropped their requirement for CF to raise £70 million. CF then went on to repay the government Covid loans and repay a great chunk of its previous accumulated loans.
So its debt level is now much reduced, its revenue is increasing and it has just started paying dividends again. This combined with an Australian retail billionaire (Brett Blundy) buying an 8% stake in CF caused the share price to begin rising towards a fair valuation for CF.
The recent half year results disappointed the market and have caused this quite irrational (in my opinion) fall in the share price, The first half EPS was 3p compared to last year’s equivalent of 5p. Despite CF blaming the increase in the minimum wage and at the same time re iterating it will meet the full year forecast of 14p per share, the market has taken it as a profit warning.
In the half year report CF said it has found an American partner which will allow it to trade in all States in America in time for Christmas and it has increased its partnership with Aldi so it is the sole provider of greetings cards in the entire network of Aldi stores in the UK and Ireland.
In my opinion, if CF EPS is only 10p per share this year the share price should still be above 150p.
Please do your own research.

[car1pet] 05/11/2024 16:31

thanks Thisaintme

[thisaintme] 05/11/2024 16:28

Car1pet,

Lockdown happened in 2020?

From two RNS's back at the time.

23rd March 2020..

"Further to our earlier announcement, we have decided to close temporarily all of our shops from the end of business today. We will keep this under continuous review and update further in due course."

RNS:

Roll on a few weeks to 6th May 2020..

"With our stores remaining closed, as per government guidance, all of our store colleagues have been furloughed under the Government's Coronavirus Job Retention Scheme."

RNS:

[johndoe23] 05/11/2024 15:52

A lot of his acolytes will now depart stocko because he's gone

[car1pet] 05/11/2024 15:15

I'm not an investor (yet). Looking at the history back in December 2019 it reached 163p then by May 200 it was down to 31p. Does anyone know what happened in 2020 apart from covid which i guess did impact the high street stores. The recent fall from 141p in September 2024 looks to be a very similar downward path.
As a newbie on CARD I assume the Xmas period is its peak trading period so the 2020 fall looks as if it was linked to the end of the Xmas period.
Given Xmas is its best trading period shouldn't the price be climbing now not falling?
As I say I'm not an investor in CARD but always interested in recovery stocks - is CARD a recovery stock or an end of line stock?

[emigna2020] 05/11/2024 09:49

Aye they are a laugh a minute, the mask phobia alone should get them into a BAFTA award.

[chester9] 05/11/2024 09:40

I know hilarious. Paul Scott massive loss to Stocko. I was a bad person for thanking him. Some people should reflect that moderating people says more about their own insecurities, made me laugh though!

[omron] 04/11/2024 21:06

Junebug - if BB did want to try at 120p, I am not sure that would fly, but he would have to offer the ability for existing shareholders to roll in alongside - which I would do depending on his timeframe and exit plans.

[omron] 04/11/2024 19:42

Junebug - as you know a suitor would have to pay a premium and given the share price was 143p a few weeks ago - it would have to in that ball park at least imho. Also it would be a brave buyer to step up before Xmas given how important that is to the business. Private equity has the issue of how they exit. It could appeal to someone who wants a steady cash flow though.

[bbonsall] 04/11/2024 18:58

Omron
Good analysis. Thank you.
I have said before that the valuation now is ridiculously low compared to when CARD shops were closed and it was making losses with banks wanting it to raise £70 million. CARD avoided this when banks saw how much cash was being generated as soon as shops opened again.

[omron] 04/11/2024 18:50

For a bit of fun I thought I would compare the enterprise value (MCap plus debt incl leases) today to the depths of Covid. I have used the debt figures from the AR 2020,2021 and 2024. The share prices were 1/3/20 32.8p and 1/1/21 35.8p, today it closed at 84.5p. The net debt in the FY20 report was 289m and at January 24 was 135.2m. The debt reduction of 153.8m divided by 348m shares gives a 44.2p reduction per share and we have had two dividends 4.5p and 1.2p. If you take all three of these off the closing share price today it gives you an adjusted share price of 34.6p. So Card Factory share price is currently valued in line with the depths of Covid when shops were shut and many believed it would go bust. If that is not crazy I don't know what is. Fill your boots while you can.

[yump] 04/11/2024 14:09

O/T Over the last few years I sent several messages into political media programmes asking them to ask Labour what they meant by “working people”, as they’ve used that phrase a boring number of times.

Post election Kuenssberg on Sunday started asking the question over and over again with “awkward”; results. Also Starmer was asked what he meant with equally embarrasing results.

Perhaps it was a semi-conscious attempt by Labour to stir up the old class system, but its shot them in the foot.

“At what level of earnings does someone stop being a ‘working person’?”; - that was one awkward question.

I take no credit but it was very satisfying. They’ve had to define it now and it doesn’t include v small business owners. Honest government here we come…?!

[actscap] 04/11/2024 13:21

I think undervalued. However grossly undervalued, perhaps not anymore. The headwinds are strong. Risk free rates are going to be quite sticky. Long term valuations may be depressed for some time to come. I'm sure we'll get a bump if numbers come in moderately close to target, but there's a lot of pressures. I'd see a multiple expansion to 10 or 11, but beyond this will depend on how the market perceives the return on the growth levers in US Australia etc. great to watch it play out over the next couple of years