Card Factory Share Discussion Threads

[garycook] 28/3/2017 12:52

A budget retailer with premium appeal

Moss Bros’s dividend yield of 5.9% is dwarfed by the 8.8% on offer at budget greetings card retailer Card Factory (LSE: CARD).

To be clear, this dividend is made up of a 9.1p per share ordinary dividend and a 15p per share special one. The ordinary dividend alone gives a more typical yield of 3.3%. But the company said on Tuesday that it expects to make a special payment again this year, as cash generation remains strong.

Card Factory does appear to be in good health. Like-for-like sales rose by 3% last year, while revenue including new stores rose by 4.3% to £398.2m. Profit margins were also stable. The firm’s underlying operating profit margin was 22% last year, compared to 22.4% in 2015/16.

One reason for this is that costs have been well controlled. Although the National Living Wage caused store wage costs to rise faster than sales last year, rental costs are expected to start falling this year as new leases are negotiated on older stores. Total operating expenses accounted for 7.1% of sales last year, down from 7.2% a year earlier.

It’s hard to find any serious faults with Card Factory’s 2016/17 figures. But the firm’s growth rate is low and may remain so. Analysts expect earnings per share to rise by just 2% this year. On that basis, I’d argue that the forecast P/E of 14 leaves the stock looking fully valued, regardless of dividend income. I’d hold at current levels.

[spoole5] 28/3/2017 12:42

What a frustrating share this is.

[1novice] 28/3/2017 11:08

Found it 0.6% down from 3% last year.

[1novice] 28/3/2017 11:03

Wonder what the like for like growth is as a percentage

[stentorian] 28/3/2017 10:30

spoole5,

Special dividend expected to be paid at the end of FY18. Last year's Special divi was paid in November 2016 - end of FY17. By parity of reasoning, this connotes FY18 Special divi will be paid in November 2017.

[spoole5] 28/3/2017 08:04

OK hopefully. That would be a bonus. A little disappointed there were no updated sales figures here but steady as she goes. This seems to be an income stock now with a bit of growth. Republic of Ireland expansion plans seem logical and deliverable.

[garycook] 28/3/2017 07:57

spoole,That would be the return of surplus cash to shareholder,s.A Special will be paid if trading remains the same.That,s how I read it.DYOR

[spoole5] 28/3/2017 07:43

Didn't they say the next special would be 2018?

[garycook] 28/3/2017 07:38

Nice steady results with an increase of 7.1% in total dividends, the final dividend is 6.3p,bring a current total of 24.10p including the 15p Special so yielding 8.8% atm,and there is surplus cash which will be returned to shareholders at the end of this financial year.

[garycook] 27/3/2017 03:11

Yes it is Final,s on Tue 28th.

[spoole5] 26/3/2017 22:06

Think it's full year results tues.

[fozzyb] 24/3/2017 18:35

Trading statement this coming Tuesday, what's the consensus? If dip, could be opportunity for top up

[1novice] 16/3/2017 14:29

They have 3 shops if you include the retail park.

[fozzyb] 16/3/2017 13:50

@1novice, can I enquire as to what town that is and if card factory have a presence?

[1novice] 15/3/2017 16:22

The town I live in has a number of independents, many are cheaper than CF. Many local people think CF are cheap and nasty products and all "samey" so shop with independent retailers. They also say the level of customer service puts them off CF. now I know they offer cheap, but you can only p!$$ off your customers for so long. That is what I based my assumption on. I appreciate that you all invest and want a return and I apologise to you all if I'm wrong.

[fozzyb] 15/3/2017 15:41

@1novice, don't think those examples are fair, Woolworths was a jack of all trades, master of nine, the other two were largely dated clothing retailers who didn't move with the times, look at m and s and their struggles to modernise the offer, food continues to prop them up. Card factory is the defacto go to destination for cost leading cards and people recognise the older incumbents are vastly overpriced and don't offer anything better. The paper chase customer is certainly a different one and continues to do well a la Waitrose...

[raymund] 14/3/2017 11:50

Interesting, my BUY just now of 795 shares at £2.82992 shown as a SELL!

[garycook] 13/3/2017 23:44

1novice,You are barking up the wrong tree here !!!

[1novice] 13/3/2017 18:03

They said that about woolies, C&A and more recently BHS. Fozzyb.

[fozzyb] 13/3/2017 10:46

@1novice, story is still strong, you have the cost leader but will still above average margin, great choice which is designed in house and so differentiated, rivals are suffering, and basket spend is low so fairly well insulated from any downturn, if you need a card and believe that trend will continue, Easter cards anyone? Then these will continue to do well, in terms of store footprint, still vast swathes of U.K. Underserved and also there is international expansion to consider. Also a great management team to lead this

[1novice] 13/3/2017 09:14

Like for like sales are poor. High st foot fall is going down. The artificial bubble they have created by opening 2 and 3 stores per town is greed and the bubble will burst. But that is just my opinion

[fozzyb] 13/3/2017 08:23

Looks to have established a strong uptrend in share price now. 300p first target