Card Factory Share Discussion Threads

[eeza] 18/1/2018 13:45

Dumping usually starts at 1500hrs.

[haroldthegreat] 18/1/2018 12:13

In fact some cards are more expensive but priced on the back and near other shelves with special offer prices marked on them so the customer might find their bargain not such a bargain.

[haroldthegreat] 18/1/2018 12:08

The problem for the business of poundland was the £1 price. With inflation that meant shrinkflation or reduced profits. Now they intermingle £2 items up to £5 with the £1 they have got over that problem.
The problem for the customer in a hurry is that pound bargain might not be £1 !

[yump] 18/1/2018 11:55

How come poundland is so successful ?

I really don't know why anyone who decides to invest on the market, doesn't read up about market segmentation. Without that, might as well forget about understanding anything that happens that might affect a business.

I'm still on the fence here. imo no reason for any significant share price growth above a rating of about a p/e of 10 if there's no profit growth, but there's a very good case for taking the dividends. The share price might go up if funds buy for the dividends of course - they can push ratings up even in companies that are not growing profits, as long as the dividends are reliable.

That's my middle ground as I don't feel the need to split neatly into good and bad.

[haroldthegreat] 18/1/2018 10:04

At Xmas the local shop was full of stock to over capacity. Bearing in mind that it is peak sales time one can see why ! Perhaps some more upmarket cards at a higher price point might improve margins ?
I am sure they must have designed their ranges around their perceived target market
My criticism is that the first time I went in and picked up an offer ,something like 79p each or 2 for 99p ,I was charged full price.the new girl didn't.do something on the till to get the correct price. She shouldn't have to , it should be automatic without any extra staff input.
The local branch does not see that busy to me. There are now 2 supermarkets,3 charity shops and now 3 other shops selling cards. We are the cheapest and only dedicated card shop. We are the quietest when I walk past.
The growth area is nail shops.we have3 and they are always packed.

[marksp2011] 18/1/2018 08:43

Novice

i bought some cards in there a couple of weeks ago
The quality was fine at least the same as Tesco 65p cards......

I agree the shops look chaotic...they do like to cram stuff in

never had a problem with the staff.

If they can hold where they are...on a dividend of 10p they are fairly priced. If they can manage more than 10p and can get any growth, the value is significantly higher - you can make what assumptions you like but any growth puts it way up from here

[attilio7] 18/1/2018 06:37

Mr 1 novice, card factory is in fact undervalued


The calculations below outline how an intrinsic value for Card Factory is arrived at by discounting future cash flows to their present value. We use analyst's estimates of cash flows going forward 5 years.

See our documentation to learn about this calculation.

5 year cash flow forecast
2018 2019 2020 2021 2022
Levered FCF (GBP, Millions) £58.30 £67.70 £73.20 £78.05 £83.22
Source Analyst x1 Analyst x2 Analyst x2 Extrapolated @ (6.63%) Extrapolated @ (6.63%)
Present Value
Discounted (@ 8.3%) £53.83 £57.72 £57.63 £56.74 £55.86
Present value of next 5 years cash flows:
£282

Terminal Value
Terminal Value = FCF2022 × (1 + g) ÷ (Discount Rate – g)

Terminal Value = £83 × (1 + 1.49%) ÷ (8.3% – 1.49%)

Terminal value based on the Perpetuity Method where growth (g) = 1.49%:
£1,241

Present value of terminal value:
£833

Equity Value
Equity Value (Total value) = Present value of next 5 years cash flows + terminal value
£1,115 = £282 + £833

Value = Total value / Shares Outstanding (£1,115 / 341)

Discount to Share Price
Value per share:
£3.26

taken from Simply Wall Street

[attilio7] 18/1/2018 06:33

Hello Mr 1novice,how many of the 876 card factory stores have you visited?
And were the staff mostly rude in all of them?

[eastbourne1982] 17/1/2018 23:21

1novice,

Revenue around 400 million, free cash flow around 80 - 90 million, this isn't made up EBITDA as is the case with most listed companies, this is free cash flow that was paid back to shareholders.

Doesn't look like poor margin to me.

Who do you work for Old Boy ?

At these levels (£2.10) this is a screaming buy.

[al h] 17/1/2018 22:53

"It's staff are mostly rude" ... the stupidity of this comment pretty well sums up the rest of it. Almost all BB's have goons like this one, no change here I see.

[eeza] 17/1/2018 20:54

Sterling up to 138.56 against USD.
Should be positive for CARD.

[staylow2] 17/1/2018 19:09

I can't believe how defence people get over their belief on the direction of a share. It's almost like people believe that a negative / positive perspective will affect the direction of the price.

[1novice] 17/1/2018 16:49

I'll wait til it hits the low £1.80's before I buy again.

[eeza] 17/1/2018 15:19

Afternoon session weaving its magic once again.

[marksp2011] 17/1/2018 14:44

the issue with being vertically integrated is that any volume fall increases the production cost/unit

I bought 10 pretty decent Birthday cards for £1 with the cards. Nothing special but fine for kids birthdays at school etc.

CARD could do 8 for £1 and o=noone would care it is still a cracking deal v tesco and the like but what impact does that have on manufacturing costs?

This is a delicate balance.

I am not expecting CARD to do anything but churn out the divis year on year

260 would give an 8% yield if the specials are in place..I would have thought that would be reasonable risk/reward pitch

[woodhawk] 17/1/2018 13:06

Wait and watch, yump.

[yump] 17/1/2018 13:03

Where's the bull case then ? The divi obviously is, but why would the share price rise ?

[woodhawk] 17/1/2018 12:57

Ah, I see the scavangers are out in force today. Just as subtle as usual.

About to bounce, imo, ridiculously oversold.

[yump] 17/1/2018 12:52

Just to clarify my point above about gettingpersonal.co.uk. Many of the large gift sites have been running affiliate schemes for years, which generate substantial volume. If you're an affiliate, you'll know the conversion rates for those (some are very good) and you will never place a new gift merchant on your site, if you've already got a good selection, because there's a risk that some of your clicks will go to the new merchant and not convert. No need for risk, when you've got secure revenue.

I work in different markets, but its the same. No new merchants, if the ones I've got on sites convert well enough already. Not unless they are really unique.

Obviously if a new merchant wants to take away some of the risk by paying a fixed increased commission that's fine, but 99% of them want you to just promote them on the same terms as the existing ones, as if its not a competitive marketplace - simply not going to happen.

(Take note merchants if you're reading and wondering why your amazing new affiliate program isn't working).

[fenners66] 17/1/2018 12:48

spoole - what specials? that was last year.

[yump] 17/1/2018 12:43

I'm sitting on the fence here wondering whether to buy some for the dividend, which, even if they stop the specials, is still very good and looks safe.

I don't think any retail business that is not growing profits will command a p/e over 10, so not holding out for any substantial share price gains.

The gifting market is very crowded and competitive. I think they should ditch gettingpersonal.co.uk and just cross-sell those gifts on the cardfactory website.

If you just put any sort of gift search into Google you'll see substantial businesses that have been going for years appearing. Getting separate new visitors to gettingpersonal.co.uk means competing with those - imo that's an expensive non-starter.