Card Factory Share Discussion Threads

[fozzyb] 26/9/2017 17:32

Brutal mark down

[garycook] 26/9/2017 14:54

Special dividends

Also offering upbeat income prospects is greeting cards retailer Card Factory (LSE: CARD). It reported half-year results on Tuesday which sent its shares lower by around 15%. This was largely due to higher costs eating into profitability, with the company’s profit before tax declining by over 14%.

However, it was able to maintain its special dividend of 15p per share while also increasing interim dividends by 3.6% to 2.9p per share. This means that the company has a dividend yield of around 7% at the present time. This suggests that it should offer a return which is well in excess of inflation in the long run, with it committed to returning excess capital to investors via special dividends in future.

Clearly, the outlook for UK retailers is relatively uncertain. However, Card Factory trades on a relatively attractive price-to-earnings (P/E) ratio of 14.4 at the present time. Alongside its high yield, this indicates that it has a wide margin of safety and could be worth buying for the long run.

[minerve] 26/9/2017 14:49

Buying some - all below 300p. We are in an environment where anything short of v.good leads to SPs crashing. Bought about 2% of my portfolio.

[haroldthegreat] 26/9/2017 12:02

Cards cost peanuts to produce.the profit margin if you manufacture and retail is immense.they make a profit at 7 for £1. To increase that they could do 6 for £1.
As a sideline I retail cards and undercut all the local retailers . I do bulk offers eg 6 as 5 and 10 for a reduced price and customers purchase handfuls.
Luckily I do not have_a card factory site near me.
When visiting our local shop I found their tills were not as advanced as they should be.I was overcharged as an offer was not applied to my purchase. That is not acceptable for a company of this size and was a trading standards offence. it's not an excuse to say the staff were new and made an error. It should be automatically applied.

[renew] 26/9/2017 11:27

Still look reasonable value to me.
If net debt is still around 140m and with the additional stores this year ( compensating for headwinds) only maintaining profit after tax at 66m. A reduction of the special dividend to 10p next year would give them 17m towards reducing debt and still leave 19p for dividends.
Would give a return over 6% at 320 and approx 5% at Peel Hunts 400p.

[alex1621] 26/9/2017 10:12

Interestingly two buy ratings today, Peel Hunt at 400p target, Liberum with 365p target. Peel Hunt reduced target from 430p, Liberum unchanged.FYI

[hew] 26/9/2017 09:53

Recently in here in a small way, H1 numbers disappointing but mainly concerned that the Board seemingly took no action re pricing as the costs increased. (Previous posts refer.)

As it happens I made a purchase in my local (south east) store yesterday. At the front was a rack of some 30 cards offered at SEVEN FOR £1. Decent enough cards, two or three I could have used though not right for me then. Many comparable with the main displayed cards.

Surely such pricing, given today's news, is just not sensible?

[mister md] 26/9/2017 09:27

fenners - an average dividend yield of 6% over a broad range of shares is still possible currently - I have some SHOE, haven't considered the currency impact there yet

[fenners66] 26/9/2017 09:23

Mister MD - a 3% yield against the whole market is reasonable

But I am scouring the market for better dividends.

Of course with the specials this is would be much higher and I was looking at them - but if specials are to cease then it does not meet the criteria.

I have had some success over the years chasing 7% dividend yield - received wisdom says that the divis at that rate are at risk - however for the most part I have found sustainable dividends and therefore capital gains to boot.

On a slightly tangential note does this currency issue read across to Shoe Zone another with potentially high yield?

[garycook] 26/9/2017 09:02

Selling out of CARD today crazy.Should be topping up.Happy to top up at 293p for a 8.25% dividend yield.Fenners thanks did it with PFC at 349p also.Always a good time to buy when others are panicing.I read the Divi will be progressive but the Special maybe reduced in line with debt.A very prudent move.I have every confidence in CARD.It is not like a CLLN,or IRV.But has been oversold this morning,and buyers piling in because it is cheap at these levels.

[mister md] 26/9/2017 08:53

fenners, I am merely pointing out that they are not ruling it out altogether. Besides, 3% dividend yield is still reasonable. Happy with my top-up at 294p. GLA

[fenners66] 26/9/2017 08:51

> Gary good timing and showing some balls.

[fenners66] 26/9/2017 08:49

> Mister MD - when you add the whole of that sentence it gives a completely different picture - are you a journalist by any chance?

"Therefore, mindful of the increase in leverage noted above, as well as the margin and cost headwinds which may limit profit growth in the short to medium term, the Board plans to review the amount and timing of future special dividends."


They are not paid to say - mindful of all the stuff going against us there is little chance of future specials - who knows something out of the ordinary may turn up - but that is about as definitive (for me) as they can be , signalling the end of specials.

[fenners66] 26/9/2017 08:37

Without future specials the yield will drop to about 3%

[fenners66] 26/9/2017 08:35

But they are signalling there are only to be normal dividends in future

[fenners66] 26/9/2017 08:34

thanks smokey !
Since we are just past half way through 2017 I did not look at that !

[fenners66] 26/9/2017 08:32

Also

The review will take into account anticipated trading performance together with likely reinvestment requirements, and may result in a deviation from the pattern of annual special dividends which has been established over recent years.

[smokybenchod] 26/9/2017 08:31

@fenners66 we are in FY18, todays results are based on $1.4.

[fenners66] 26/9/2017 08:30

That will bake in a 14.6% rise in imported costs next trading year.

[fenners66] 26/9/2017 08:28

I think I found it

"At the date of this announcement, foreign exchange exposure is hedged for the remainder of FY18 and a large proportion of FY19, giving expected full year weighted average exchange rates of c$1.40 for FY18 and c$1.34 for FY19 (FY17: $1.64). The weighted average exchange rates are subject to movements on transactions yet to be hedged for FY19 and assume all structured options are exercisable. "


So if costs rose at an average of $1.64 what are they going to do at an average of $1.4 and $1.34 ?

[deanowls] 26/9/2017 08:26

Debt whilst paying large divis?

[fenners66] 26/9/2017 08:23

What is it the market is punishing so hard?

[this_is_me] 26/9/2017 08:22

It looks like I will be buying more today.