Card Factory Share Discussion Threads

[renewed1] 04/4/2019 09:51

We should be getting the prelim results sometime soon.

[riostroy] 03/4/2019 17:35

You will not see similar behavior in other shares. After auction share price is always corrected to the level at which 100k shares has been sold at 16:35.

[luderitz] 29/3/2019 19:49

I would agree bbonsall.

[bbonsall] 29/3/2019 19:03

Riostroy
It is labelled UT which means it is the uncrossing trade after the close. I think it is a book balancing operation as a result of the closing auction. I do not think it is an individual buy or sell, just a statement of the total volume and the average price resulting from the closing auction between buyers and sellers.
I stand to be corrected.

[riostroy] 29/3/2019 16:51

And again 97840 shares sold in auction

[riostroy] 29/3/2019 05:09

Few days in a row at auction someone sells roughly 100k shares for cheaper price than at 16:30. Someone is panicking and escaping ASAP. Would be a sign of further drop in share price

[bbonsall] 18/2/2019 00:07

To illustrate the neurosis of the market, I suspect it was because US retail sales were lower than expected. You might wonder what the hell that has to do with CARD. I rest my case.

[leopoldalcox] 14/2/2019 17:16

Why did this get such a slap down today?

[bigboyo] 01/2/2019 12:23

LeopoldAlcox,

Its a copy and paste from MF .. Motley Fool.



This is the disclaimer at the end of the piece ::::>>>

Roland Head has no position in any of the shares mentioned.

The Motley Fool UK owns shares of Card Factory and PZ Cussons.

Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

[leopoldalcox] 30/1/2019 01:50

Where's that from GC?

[garycook] 30/1/2019 01:35

A high street winner

Times are tough for high street retailers. But one company that’s performing well is discount giftware retailer Card Factory (LSE: CARD).

This £600m firm continues to expand and enjoy stable sales from its existing stores. This may not sound exciting, but Card Factory’s policy of designing and producing all its own cards has made it a surprisingly profitable business. For example, last year’s results showed an operating profit margin of 17.9%.

For shareholders, this means that this retailer is something of a dividend heavyweight. At current levels, the stock offers a forecast dividend yield of 8% this year.
What’s the catch?

Card Factory’s share price has performed poorly in recent years, falling by more than 40% since January 2016. But the firm’s financial performance has been much more stable. Sales have risen from £326.9m in 2014 to £422m last year. Profits haven’t quite kept pace with this growth, but given the firm’s high margins, I think that’s acceptable.

I’ve been watching this stock drift lower for some time now. I’m starting to consider a purchase. I’m confident this discount retailer will be a high street survivor. And with the shares trading on 10 times forecast earnings, and offering an 8% dividend yield, the risks seem acceptable to me.

[riverman77] 26/1/2019 15:33

The trouble with card shops is anyone can set up in competition - no barriers to entry at all. I've seen a few very similar shops to Card Factory recently - I think there was one called Cards Direct which looked like a clone. Coupled with that you probably have a general fall in card sales and lower footfall on the high street - so I see this as business in slow steady decline, which is very much reflected in recent results.

[renewed1] 24/1/2019 11:29

Cause they obviously make a lot of cash numbnut!!

[ny boy] 24/1/2019 10:21

Why so many shops when online sales are booming?

[fenners66] 11/1/2019 12:02

bbonsall >11 Jan '19 - 01:15 - 1004 of 1007

"When you say there was negative cash flow last year "

Looked up the financials page and its says £-5.6m

[garycook] 11/1/2019 11:38

Purchased here at 162p Bargain if 160 holds !

[bbonsall] 11/1/2019 10:05

So a 0.1% fall in LFL sales equates to a 15% drop in share price! Usual neurosis of the market.

[garycook] 11/1/2019 03:57

Outperforming

In the rough seas of the UK retail environment, Card Factory stands out as a company that has what it takes to weather the hostile environment.

The UK’s leading specialist retailer of greeting cards, dressings and gifts today reported sales growth of 3.4% for the 11 months to the end of December 2018. On a like-for-like basis, sales declined by 0.1%.

What I’m really interested in, however, is the growth at the firm’s online business. The update notes cardfactory.co.uk delivered revenue growth of 59.1% for the 11 months to the end of December 2018, following an increase of 65.8% in the same period last year. Granted, this is still a relatively small part of the overall business. Management estimates the group has around 1% of the £100m online personalised card market, implying total sales of just £1m compared to overall revenue of £400m+. But it is expected to start turning a profit this year. Any further sales growth should go straight to the bottom line.

With sales rising by more than 50% per annum, this online division will be a considerable driver of profits in the years ahead. Thanks to growth from the online business, as well as the contribution from new stores to overall sales, management expects to hit its profitability targets for the current financial year.

The City is expecting earnings per share of 17.4p and a dividend of 13p, implying a forward P/E of 11.2 and dividend yield of 6.7%. Based on today’s trading update, I see no reason why the company cannot meet these targets.

Overall, Card Factory’s growth looks to be hotting up, and this retailer appears to me to be a much better investment than Sainsbury’s.

[bbonsall] 11/1/2019 01:15

When you say there was negative cash flow last year do you mean the positive figure reduced to a lower positive figure for cash flow? Otherwise you are suggesting cash outflows occurred, which was not true.
LFL sales reduced by 0.5%. Pretty good I would say in the circumstances most other retailers find themselves in.

[fenners66] 11/1/2019 01:07

From the trading statement

"We continue to mitigate a large proportion of expected cost challenges, including National Living Wage and electricity wholesale prices, which will result in GBP5-6m of additional costs.

In light of the current consumer and macro-economic backdrop, we anticipate that FY20 will be another difficult year. "

They managed revenue growth only because of new stores and LFL is negative.
But new stores have start up costs that hit the P&L
When they run out of new locations the LFL suggests that sales will actually decline - but we know that there will continue to be wage inflation and arguably more.

Management do not see profits growing this year or next.

Net Assets £218m but that includes £332m of intangibles...
There was negative cash flow last year and 51 stores to pay for this year so how much of the debt do they expect to pay off and when ?

Add the doom and gloom of lower footfall and high street sales and this could well go into reverse in the future...

[bbonsall] 11/1/2019 00:39

Forget the 15p special dividend. Even if it is maintained at only 5p we are now talking about 9% re5urn on investment at this share price Pretty tasty!

[bbonsall] 10/1/2019 08:35

Yes agree, the share price doesn’t deserve this treatment. Saving 10p on the special dividend will surely cut debt by £30 million plus. Card is still highly cash generative, how many companies can claim that?