Card Factory Share Discussion Threads

[lastchance23] 11/1/2020 02:07

>>Fenners66

My guess she bought less, as she wasn't expecting a party invitation from cutting the special dividend; added to the fact she's already got a significant stake.

The market is fearful of anything retail, on look north today it said the high street had the worst xmas in 25 years. CARD has just been pick of bunch for targeting, as its not so long Clintons had problems, but CARD is value end, like the PRIMARK of CARDS, where else can you get 7 for a £1, or premium Valentines for £1.49. The business needs restructuring a bit, online had 14% increase, they have been trying to get the 30% that want access to the shops through expanding stores, but I think they'd be better off getting POP UP stands/displays where they can't access certain populations i.e. rural, outer urban through partnerships with convenience stores, uni's, schools etc. They've already survived 2 recessions, so I don't think it's game over yet, but I would like a rise in next 6 months preferably, my £140 initial purchase is now a headache.

[fenners66] 11/1/2020 01:04

When arch ramper and sticker of fingers in ears UKN posted that about the FCA I literally cracked up laughing !

Then he repeats it all day and tries to make it "the" topic of conversation

Meanwhile the share price which he cannot fathom has continued to plummet.

So lets get back to debating the whys and wherefores.

Lastc - if the share price is now almost 50% of her buy last July and she is so confident - why did she only buy 12.6% of what she bought last time ?

Hardly acting with the same confidence is it ?

Add to that her previous investing record is not great - she's down about £109k.

bbonsall - if you want to believe that a hit of £5-10m is good news , out of the blue , you are probably in a small minority - share price movement shows that.

Of course you have to take debt - not mentioned in the RNS into account , and the calculation that LFL dropped by about 3 % in their busiest 2 months....
Rising costs to come.....

Anecdotally profit warnings come in 3's......

[bbonsall] 11/1/2020 00:44

1. The headwinds of exchange rate and wage increases will impact ebitda by £5-10 million next year.
2. The level of ordinary dividend will be reviewed, there will be no special dividend next year.

I am afraid the market is dominated by doomsayers and pessimists because that is the lifeblood of the stock market.

A more optimistic way of reading those statements is:

1. This year’s ebitda is predicted to be £81-83 million. With increased turnover next years ebitda might reach £93-98 million, who knows? However, the headwinds will reduce it by £5-10 million. So next years worst case outcome could be ebitda of £83-88 million. So better than this year! The statement does not mean that next year’s ebitda will be £5-10 million less than this year.
2. The level of dividend will be reviewed does not automatically mean downwards. Since the statement follows the one that says the special dividend won’t be paid next year, it is just as likely to mean the regular dividend might be increased to compensate. This, especially because it says the company is committed to returning surplus cash.

[lastchance23] 10/1/2020 21:27

The salary is £610,000, she's had a 20% increase in past 2 years; but regardless of salary she has a good track record at major companies like BP, ASDA, M&S; hopefully in time things will resolve themselves, some wealthy people won't even put money in a charity box, so doubt she'd willing write a cheque to the market, but who knows what goes on in the minds at the top. She admits she's a prolific card giver, lets hope she's not delusional;, part of reason I added was because my mum is same, she literally sends several a week, birthdays for family / friends / work, funerals, easter, pretty much any reason, she even find's reason's I've not heard of, so unfortunately my judgement was clouded by a pile of cards at that time.

[russ1983] 10/1/2020 21:20

I'm on monkeynutts and even I could buy 7k worth!

[farrugia] 10/1/2020 21:12

lastchance - what we need to know is the salary of the CEO Karen. 10,000 shares is nothing for her.

[edmondj] 10/1/2020 20:55

Not your fault. There's been a bear as well as bull case here, if chiefly around long-term decline in greetings cards (the CEO vigorously counters) but they have replaced a sense of dependability of cash flows with uncertainty - pending the outcome of their strategic review and what it achieves. Hence the de-rating. If the re-set works then there's value but they've left us guessing.

[lastchance23] 10/1/2020 20:40

I feel I should of done more research before entering this trade, I bought before and after, so am merely looking to break even at this point.

However I find this company hard to value, some of the metrics are skewed, it has buffets key things such as a high ROE (21&), the ROCE is 14.8%, and forecast earnings in 3 years are still high at 23.5%. Its assets out strip its liabilities, but it is well covered by cash flow and for interest payments.

I also noticed CEO Karen picked up last xmas 2018 46,000 (at 1.71), in july 2019 79,000 (at 1.88) and this jan 2020 10,000 (at £1.10); either she's bank rolling the company, has very deep pockets, or is planning to sell these at some point, not sure she'll want to sell at this price guys, think maybe next update might sound bit more optimistic. I will ask my Magic 8 ball whether to add more :D

[ukneonboy] 10/1/2020 20:30

que sera sera

[edmondj] 10/1/2020 20:28

CARD has triggered the sell-off by changing abruptly from a narrative of strength in dividend capabilities, to uncertainty.

Obviously other dynamics are involved but dividends (as an expression of cash flow) underline them.

[lastchance23] 10/1/2020 20:13

I don't think the FCA have time to baby sit all this banter...

I am just wondering who has triggered sell off, as no insider sells, director picks up; I was surprised but ownership is around 70% institutions, 10% individuals like us, and 20% hedge funds.

The company is now 56.4% undervalued, someone earlier suggested the 5-10m lower ebitda meant 7% less profit, but according to simply wall street it is about 3.8%, but the ebitda also has to factor the currency and other accounting issues with stores, hence I still feel this market reaction is crazy at this point.

I think it must be hedge funds, banks, CFD companies selling.

[edmondj] 10/1/2020 20:12

lastchance23,

Interesting video, thanks for sharing. But what she says about the various card segments being strong except for Christmas, doesn't square with the sudden about-turn in the company's narrative: how an apparent dip in Christmas sales has prompted a strategic review, termination of the special divi in respect of 2020 and re-appraisal of the ordinary according to conclusions of the review.

[bargainbob] 10/1/2020 20:07

Neonboy , i may have missed something i see no one trying to post any misleading info .

The only one suggesting a buy was EJ earlier this week , but said with lots of caveats maybe better to wait to after update or invest half before or half after.All excellent advice given what happened.

So who do you thinks being misleading . Your behaviour is very suspcious to be fair.

[extrader] 10/1/2020 19:37

Hi all,

Mark Twain had it right: it’ s notwhatyou don’t know that kills you, it’s whatyou knowthat just ain’t so ....

AT

[bargainbob] 10/1/2020 19:18

Ukneonboy , you sound guilty . Experience off fca they could not run a hot bath , let alone police every bulletin board .

Enjoy the banter , take nothing too serious . You will see over time which posters make good judgement based on all known public information .

[smokybenchod] 10/1/2020 18:59

So is not ramping the share on this BB a few months ago saying how good Q4 results would be not false and misleading? Hope the FCA investigate that.

[lastchance23] 10/1/2020 18:16

Forgot to add: heres video:

[lastchance23] 10/1/2020 18:15

There is a video on card factory from Nov 2018 with CEO Karen Hubbard, this puts card market picture into reality, it is not in decline, it is 2-3.4billion industry, it has lot of competitors, but card factory are market leader. According to video, about 30% of people don't use card factory because of access, which is why I believe their plan has been to roll out more stores. A few tweeks and the share price will gain momentum again, this has just been a over reaction and panic sell because its retail, but the stats show physical cards remain resilient, the market structure and users are changing, but plenty of opportunity with right plan. Time will tell.

[ukneonboy] 10/1/2020 18:03

Twitter is the place for banter, arguments and the usual bad mouthing

but more importantly it (Twitter) is not CURRENTLY being monitored and scrutinised by

the Financial Conduct Authority unlike this BB and others like Motley Fool

[edmondj] 10/1/2020 17:54

Realists know BB's are banter. Meanwhile here's what CARD had to say on 14 Nov through the *Regulated* News Service:

Karen Hubbard, Card Factory's Chief Executive Officer, said:

"I am pleased with our year-to-date performance. Our ongoing focus on customer experience, and the quality and range of our card and complementary non-card products, has led to an increased average spend both in stores and online. This has helped us to substantially offset the effect of the lower high street footfall experienced in the quarter and the corresponding impact on our like-for-like sales.

"We remain on track with our new store roll out and are focused on pursuing other new growth opportunities and retail partnerships to extend our market penetration in the UK and overseas.

"Our quality/value proposition and new product ranges give us confidence that we are well positioned to deliver a good performance in our key Q4 trading period. The Board anticipates profits for the full year to be broadly in line with its previous expectations."

Question is what extent this reflects misfortune, incompetence, or gloss...