Card Factory Share Discussion Threads

[cantrememberthis2] 10/4/2018 07:35

Peel Hunt = WRONG to have said don't expect a special dividend... halving it or 1/3rd less is conservative. Indeed with their record performance hint: better news than expected IMO. 210p finish today.

[woodhawk] 10/4/2018 07:33

Agreed Gary, I'm happy to hold with that yield and add on any weakness as it could be significantly higher.

[garycook] 10/4/2018 07:28

Got the Special right at around half.It will be interesting how the market takes the results.But must be positive.Minimum special of 5p together with 9.3p is 14.3p.So a guaranteed 7.52% yield atm.

[marksp2011] 10/4/2018 07:16

A mixed bag

Special divi cut and the debt to sales ratio is rising which isn't so good. Cutting the special to 5-10p from 15 will help with that.

No excitement in 2019
2020 financial year has different currency hedges so things should improve then

So forecast 8.6% yield looks like it at a 190p share price

6% gives a share price of 270

[woodhawk] 10/4/2018 00:15

In the morning.

[inthemix] 09/4/2018 23:56

When are results due?

[bbonsall] 09/4/2018 23:42

Eeza
I think they should change two of their capital letters!

[riverman77] 09/4/2018 21:15

The same Peel Hunt who had a target of 430p as recently as H2 last year when share was trading around 300p. I'd say do the exact opposite of what they suggest.

[eeza] 09/4/2018 20:55

In which case Peel Hunt will need to change one of their capital letters.

[mattcookson] 09/4/2018 20:38

CARD's strong record of cash generation means the vertically integrated retail chain has returned almost £250 million to shareholders since its IPO in May 2014.

Year ending 31 December 2017, the company recorded like-for-like store sales growth of 2.7 per cent on the previous year, with "solid" performance over the Christmas trading period.

A total of 48 new stores were opened during the period and this is expected to rise to 50 by the end of the financial year. Card Factory added it was "confident" of opening a similar number in its upcoming financial year, ending 31 January 2019.

Solid business with great 12% divi, what’s not to like? Retail sector in general is struggling but if tomorrow CARD shows signs of some stability over the last few months, share price will be well over 250 over the coming days/weeks. I am sure we will hear from the CEO tomorrow about the stability of the card market and Card’s strategies to benefit from its strong market-leading position. Solid BUY!!

[bookbroker] 09/4/2018 12:37

Absolutely awful business this, go to B&M Retail, it’s just as awful!

[asturius101] 09/4/2018 12:12

market seems to be expecting dire results imo

[marksp2011] 09/4/2018 09:28

FWIW, PH are right
Sales are flat, debt was increasing and cash was falling
Xchange rate weakness has now gone the other way so is less of a "headwind" and the RNS have been written to blow smoke over what is happening. For me, the fact the LTIP pays out on 1% growth was the indicator of where this is expected to go.

My view is they stop paying the special and pay down the debt. There is no point is eating the company to pay the dividend

Not sure about "growth" in sales that comes from stuff that erodes the margins. That is a management decision they can't use it as an excuse

My view is that this is like a utility, growth wont be exciting but the returns should be OK if they can get the debt down.

It has no assets really, the cost of opening a store is low it should be a decent cash cow if they don't overdo it.

[renewed1] 08/4/2018 13:53

Mark
Conviviality's demise may have been clear to you but as you point out it wasnt to many so called professionals. Surely the similarity is is in high debt levels and falling profit and throw in directors buying.Hopefully the similarities end there and we will ,as i suspect, get good news this week.However although I had no share in Conviviality ,the nature of its demise was enough to prevent me committing a lot more to Card Factory, which I may consider a PITY in a couple of weeks time.

[marksp2011] 06/4/2018 18:29

Renew

Conviviality went to a wholesale model where they had to fund their customers from a retail model where their wholesaler funded them. All they did was sell it, put the money in the bank then pay the supplier. As the wholesaler there is a really complex cash/debtor management game to be had.

It is no great shock that they would need a lot of cash to make that move in their business model

The shock is that they didn't seem to understand that their game had changed and they didn't seem to have a scooby on how to manage the cashflow on a wholesale business. High growth ==> High working capital demands and they simply didn't have the wherewithall to run the business at that scale.

Second shock is that the brokers, tipsters etc didn't seem to notice that debt was rocketing or recognise that it would keep rocketing as the business grew especially as debtor days were increasing

Management need shooting but I don't see the relevance to CARD that has a long history of vertical integration and hasn't made any great business model changes

[alex1621] 06/4/2018 11:29

Compare pre-tax profit of CARD with total debt (short and long term liabilities) then do the same for Conviviality. The latter was heavily indebted. Might as well compare CARD to Enron or Lehman Brothers. Your comparison makes little sense.

[renew] 28/3/2018 19:25

A1H
I think my logic is quite clear Maybe reading not your strong point.
The point being made was that on the face of the facts we think we know at the moment these are probably at a good buying level. The word pity was used because as you point out (quite obviously) if and when good news is confirmed we wont be able to buy them at this price.
So is the risk worth taking? Ask the Conviviality shareholders who bought last week.

[eeza] 28/3/2018 17:24

Absolutely, Rodney.