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Big difference with M&B. Latter has freehold estate and their competition is unchanged and the sector will boom when we are free to socialise again.
Card on the other hand has lost permanent market share and has a vast estate with massive rent arrears, bank debt and Government debt. It still has a vertically integrated model which has some merit and can play catch up online but is way behind Moonpig in gifting and average spend per order. Properly recapitalised and having sorted out the leases, it may be a very good recovery play, I just think that existing equity will be the last to benefit behind bank, new equity and landlords.
@scorpion not meaning to argue just more curious on your insight
As I say this was £80m EBITDA before Covid. Even if you see that falling by 30% you’re easy back in 2x cov range needed
Even if they raise equity now. When this all goes back to normal the business will just be generating cash and have a clean balance sheet?
Do you not think this could be a straight refinance? In a Mitchell and butler RNS at the same point they said “recapitalisation” and said equity was being considered. This RNS reads different
You’ll see. Don’t say you haven’t been warned
My my, more garbage. What a skewed bit of tosh. Stakeholder simply means anyone with a stake! Staff, management, BoD, shareholders, Banks / debt holders. It doesn't just mean Banks!
I can see that "stakeholder" was used 3 time within the RNS about "Annual Financial Report and Notice of AGM"
Released : 19 Jun 2020
RNS Number : 5412Q
Card Factory PLC
At least we can see that they have used this term before, thanks hope this help.
Go on card factory RNS website and you can search it
I don't recall the word stakeholder being used before in an RNS here!
@paddy say it how you want net debt moved £29m. So either we are holding £29m more cash or have paid back debt. It’s really quite easy fella
Also EBITDA is a proxy for cash is what I said. This is why it’s used by investors (common with PE) as each owner will have their own capital structure (ie different interest and depreciation depending on the model they use)
@scorpion - stakeholders has been used by card a few times and I think here it can mean a lot particularly as before this it is referring to stores opening
On a business which can generate £80m of EBITDA why do you think there is such need to pay the debt now?
This could be refinanced and in three months time the run rate position will show the debt is manageable?
Better informed than us but unlikely to have been insiders under the MAR definitions
Yes, i think they dumped upwards of 20m shares! they didn't make any profits that's for sure & i'm sure those guys would have inside knowledge too!
I think Sparta was the custodian for Douglas Bay
Same as Sparta Malta. Got rid of huge holding in last couple weeks!
Ps Douglas Bay are very shrewd investors. They didn’t dump their shares at 30 because they thought it was worth 50 or 100!
The board are insiders and can’t trade. Rest assured whatever the CFO loses on his shares will be compensated by new options at the post refinancing price and a large refinancing and restructuring cash bonus
danl90. Please read up on accounting stuff. EBITDA is not cash & £29m was not 'paid back'!
I've said it before and I'll say it again, I can see a shareholders revolt brewing.
I'm not happy with the current board or the appointment of the new CEO.
The fact that THE CFO is holding makes me think otherwise... speculate all you want - Monday will speak for itself. Does anyone have anything of any real merit to add to this board?
Scorpionwinger. you talk total sense here. The'stakeholder' phrase wasn't missed by me either & yes seemed to be overlooked by the market!
There is so much garbage written here.
I worked on the Clintons restructuring and was very underwhelmed by The new CEO. I offered my services to this Board. I was told they had it all under control and didn’t need any help. While they have been shout, Moonpig and the supermarkets have eaten their lunch and dinner and won’t be giving the customers back. The high street has changed forever. Card is way off Moonpig or funk6 pigeon on tech. The store estate is too large and the combination of leases and bank debt will mean that any free cash flow over the next 3 years is going anywhere but shareholders. The final straw in Friday’s ridiculously timed RNS is the use of the word “stakeholder” not “shareholder”. Having worked on plenty of restructuring since this in code means the banks are in charge and any equity issue will be massively dilutive and conditional on a debt for equity and cva with warrants to the banks and landlords.
I reckon new equity may be asked for £50-£100m and with a recapitalised sensible debt financed business on a post warrant basis I would suggest a broad ownership of the post new money equity as being 55pc new equity, 20pc banks, 15pc landlords,10pc current equity. On that basis, current equity is probably worth no more than 10p. I was truly shocked the marker didn’t grasp that in the last hour of trading on Friday. First RNS they had which used the word stakeholder.
For what it’s worth a new investor post rights could do very well although I do have concerns that the business model is holed below the waterline for good. The Moonpig share price suggests the market agrees.
Trading update in Jan-21
“ Despite the unprecedented nature of this year, our aggressive but considered management of costs and cash has resulted in a material reduction in our utilisation of the debt facility, resulting in net debt being reduced to £90m as at 31 December 2020, compared to the net debt of £119m as at 31 December 2019”
£119m - £90m is £29m
Also the £10m loss is accounting adjustment and not cash. EBITDA earnings were £5m and EBITDA is a proxy for cash
can you point me to the RNS saying they paid back £29m last year please!
The risk of a company going bust which they've already funded with a £200m RCF & has made a £10m+ loss. God knows how much they owe in lease liabilities. they keeping a close lid on that little Pandora's box!
The banks got paid back £29m last year. Why is it risky for them? The stores will reopen. Vaccine roll out is happening
Last year stores were closed for a lot longer than they will be this year
Stores were even closed over peak Christmas!
All said we handed back £29m
This year cheaper cost of sales, growing online, more store activity and Christmas
The banks do not want the risk. It is that simple. The shops are not guaranteed to open in April either & they are not guaranteed to stay open either. BoJo stated he cannot guarantee his timescales or that they will be irreversible. That=RISK
When the bank waived in Jan-21 all was good until end of Apr-21. Since then
- app has performed well
-£ has increased making costs cheaper
- stores to re-open earlier and even earlier in Wales
These are all upside from when we got the last waiver when all was happy to end of April
Other sweeteners include stuff that rishi will give on Wednesday
- business rate deferral or cut?
- business loans from state?
- vat deferrals?
All upsides to where we were end of jan
Also what’s the need for the equity? We will go back to £80m Evitda and and be 1x debt very soon when stores open
The RCF is a dumb and expensive debt. Give a proper loan with a 3 months pause to start and this will fly and the banks paid in full