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Completely agree, Billy.
In 2 of the shopping centres near me, there are still 2 Clinton shops very close to the Card Factory shops. And the difference is huge. Whereas CC had 1 staff member in each shop with only a few customers, Card Factory had 3 members at the tilss in each shop with big queues.
They gave a Xmas trading update on 14th January 2021 and so I would expect one around the middle of January 2022.
Will January be there next financial update?
Back in April after 3 lockdowns the Card Factory’s Board of Directors sat round a table cap in hand with the bank.
The stores had been forcibly shut down by the Government for 5 of the previous 12 months and tight restrictions on parties and gatherings meant the banking covenants were about to be breached.
They were desperate.
Fast forward to January 2022 when once again there is a likelihood that they will be sitting around the same table with the bank but this time after 9 months of successful trading things will be very different.
This is a no brainer for me and (after Avacta) is going to turn into one of my best investments.
There were many reasons Clinton’s went bust that are not relevant to CF.
Cc was run by the founder’s son (Clinton Lewin) who lacked his fathers retail skills. Don Lewin had retired a few years before it went under.
CC was a pure retailer and so only made a mark up on what it bought from American Greetings and Hallmark. CF designs and prints it’s own cards and so earns a greater part of the value chain in its margin.
Clinton was locked into expensive 20 year upward only leases.
Clinton (despite charging very high prices - 3x what CF charges) was not a premium retailer, it was part of the squeezed middle. CF is a clear value retailer.
As a result CC shops were empty while CF shops are full of customers.
Very well said Banburyboy, I used to trade Clinton cards many times making money before their American owners stabbed them in the back.
Card F looks much better run and still making profits to pay down debt and with luck when we really open up sales will be up more with more profit and paying down debt even faster.
Simes is just putting out fear to try and take down the SP of card F as he doesn't really have any bad things to say about them. But he / she does give us a laugh in these winter days.
Hi Simes
- I share your concerns around margins and income. It is easy with so many interuptions to trading to creatively present the numbers as better than they are. For this reason I have based my investment on cash flow and debt reduction. The fact debt has fallen from £175m on 31st January 2021 to £108m on 31st October 2021 to me that is fundamental to the investment case. I can see no obvious manipulation to that reduction (increased creditors / share issue etc) and the inference is the business is extremely cash generative - can you provide evidence to the contrary ?
- Your comments about Clinton Cards and going private did actually scare me. Clinton was unique and represents the ultimate in sharp practices by American Greeting's (AG) there now owner. Post the crash Lakeshore Lending a subsidiary of AG purchased £35m of secured debt from the then distressed bank leding to Clinton . As the only secured creditor they pressed the button on winding up the company. Not only did they get £29m back (and I doubt they paid £35m) having read the liquidators report they were a preferential buyer for what remained of the company. Remain is a key word they took the shops they wanted and the rest of the shops the unsecured creditors took a hit on and were closed they got less than 1p in the £ . Clintons was not evidence the model does not work they are thriving on the high street today !! But rather extremely sharp and hopefully never to be repeated experiances of distressed bank asset sales. How do you see the mechanics of taking this private because its not Clinton. Great to know as I will objectively consider any position.
Best wishes Banbury
Hi simes I like having you onboard here because you actually come across (to me) as a nice person ok with an axe to grind with the Card Factory but that’s cool it keeps everything here balanced.
I actually agree with a lot of what you said above and it might turn out that you are right but for me that’s the excitement here - you could be wrong.
The stamps is a good point but the carrier bags must add up! It’s still ‘up selling’ and believe me it’s definitely working. “Wrapping paper sir” ha ha
If the shops stay open then that is good news but there is no denying the Upgrade to the existing IT system is a big risk but it needs to be done to unlock Cards on line potential which is MASSIVE.
Simes20,
What stocks are you holding mate? I've asked you this many times, but to no avail. It's almost like you're here with the sole intention of de-ramping CARD
It's the different views that make share gambling such fun..
I base my view on facts and experience. The last thing this share is, is exciting.
I would think twice about lending the board a kebab van, never mind a business they have no clue about.
The one thing people like Darcy are good at is b...
The ERP has disaster written all over it - apart from 'what is the point?'.
The 'partnerships' are just glorified wholesaling, even Aldi are also using a specialist to supply them, rather than a competitor.
International? who isn't...
Extended franchise...what?
The board will soon be long gone.
I see you confirmed the oldest trick in the book - lets ask every customer if they want stamps - get the sales figures, worry about the zero margin later. They need to do what the supermarkets do with petrol - exclude stamp sales from their figures.
Hopefully the large shareholders will demand this.
I could go on.
Yes it was having problems before Covid but not major and mainly due to reduced footfall which they were addressing.
All my research is pulled from somewhere Banbury and I always normally provide links to back it up.
Check out the following to get you up-to speed.
Great to have you on board by the way.
An obvious one first:-
https://www.cardfactoryinvestors.com/what-we-do/strategy
Google “Bonkers Bargain Card Factory”
That’s a good read.
Check out the ‘Risks’ section in the following RNS:-
Annual Financial Report
RNS Number : 5394D
29 June 2021
Hope you are right Rox.
Three to five years ago this fluctuated between £2 and £3.
It really hit the buffers in Dec 19 and Jan 20 and we had director buys at 88p pre pandemic.
I'm assuming all the things you list are a response to some underlying issues with business model that emerged shortly before the pandemic?
Hope you are right Rox.
Three to five years ago this fluctuated between £2 and £3.
It really hit the buffers in Dec 19 and Jan 20 and we had director buys at 88p pre pandemic.
I'm assuming all the things you list are a response to some underlying issues with business model that emerged shortly before the pandemic?
Research Research Research.
Yes Banbury now you can see why I am ‘all in’ here!
The potential is staggering and here’s the best bit…
RNS Number : 4057B 10 June 2021
CEO Darcy Willson-Rymer said:-
“The preparations for our ERP implementation, on hold during the third lockdown, is now progressing well, with phase one now scheduled for October 2021. We expect this will further improve efficiency and replace multiple solutions, many of which are no longer supported and unreliable.”
This announcement was back in June and by all accounts is going well so we are due an update.
Along with news on any of the following:-
- New/existing UK Retail Partnerships.
- Growth in international markets through partnership arrangements.
- News on its e-commerce multichannel propositions including click and collect.
- Extended franchise agreements.
This is such an exciting share to be in at the moment and as each day passes gets more so.
If the government shuts down businesses it will have to restart the furlough scheme which I can’t see them wanting to do that as it will add billions more debt for the UK to repay.
Brought in yesterday and thinking of adding if CNE (awaiting £1bn cash from India) and AVON (distressed and hanging on a strategic review) come good.
I like the fact there are no share issues and they have had 342m like for ever.
They have ridden out the pandemic by removing dividends and using debt funding.
Pre pandemic
-Y/E 2018 Sales £422m an eyewatering 24.2p per share dividend. Debt £165m
- Y/E 2019 Sales £436m dividend 14.3p Debt £144m
- Y/e 2020 Sales £451m dividend 7.9p Debt £144m
Debt shot up to £175m in the 2021 interims, fell to £118m in the 2021 finals and again to £114m in the 2022 interims. Latest update had it as £108m and sesonally high due to stocking and £108m on October 31st 2021
An awful lot to like about the speed they are paying down debt and the share base not changing. I also love the fact debt is circa a third less than business as usual pre pandemic.
If the shops stay open i would be confident on my investment.
If the shops shut again the main consideration for me is government support for wages if that happens i would be mega confident from what i am researching. Wages seem the most significant cost and are fixed in nature.
I comented previously that cash flow in interims looked eye wateringly good but having researched further I can see the attraction of this share and link to dividends past and immediate debt strategy.
I also love the updates from shops which all sound really promising.
LTH's will be aware of much of what i have written but i like to do my own research so apologies in advance
Good luck all Banbury