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As you just highlighted and I forgot to mention...think a bid is highly likely and the opportunity cost is worth it.
Curry's received a bid from one of the most astute operators out there...that is a pretty crap business. Card is probably now quite a bit cheaper on very clean earnings now vs. Curry's...and it has real sustainable competitive advantage.
Very few positions where you can feel the upside is very healthy vs. (I would argue) a pretty limited risk profile.
In this tough market, it's my favourite!!!
"socio-demograhic, the fact +80% of card purchases are by females adds to the lack of 'getting it' and its hard for them to understand that for many people xmas might be a budget of 80 quid for 6 loved ones and card factory allows them to fill an entire basket of cards and goodies"
Come to think of it, where i live, Bishops Stortford, I hardly ever see men in there, you really hit the nail on the head re females shopping,.
Also the £££ cost is very true. It also dawned on me that while i can afford dearer cards aka Clintons, I asked myself why should i / do i spend £££s on a card that is going in the bin a week later. Huge waste. Also what turned me onto CARD was the quality increased too without much of a price rise.
The one thing of note with my local store tho is that it is very small and as a result very limited with some of its offerings. I found the anniversary cards and surprisingly the mothers day cards to be very small in terms of choice..
my two penneth !!!
Good luck all and for those that do, Happy Easter
Well said ggrantsu nice overview
Time for action is coming though as this has been. Played for a good year now
Still don’t see any real indicators there is a seller around but don’t intrinsically look at all transactions
If the board don’t get fair value someone has to out there
Basically...we have a really big opportunity here. What is fair value? Well it certainly in my mind isn't a single digit PE, not for a business that throws off these margins (and growth)...and certainly not for a business with its competitive position / marketing leading position in an attractive sustainable niche.
I don't know where we end up, but certainly 1.50 would be a good start. interested to hear other views!
Nice to see some chat on here for once. I just cannot get my head around the lack of interest here...but to be honest, thats what makes it so exciting.
I've had many instances of things getting to extreme valuation levels over the past year and snapping back hard rapidly and near bagging. However, in terms of raw quality of business, and lack of complexity to the story, Card Factory takes the crown by a mile. At 6x earnings (potentially under 5x for january-26 YE), you get the highest margin / return on tangible equity (CF's is negative i.e. they have to put up no equity of their own to run the business and are completely financed by their payables / landlords) in the UK retail landscape. Additionally, you get one which is value focused and performingly strongly currently, with lots of growth upside in the form of gifting / baloons / international expansion. Customers are sticky, and competition is completely withdrawn e.g. Clintons + expensive crap selection of cards at supermarkets.
I find the online/moonpig debate quite funny...people who shop at card factory are never going to be spending 4-8x as much at moonpig. the obsession of the city and other people on here with online highlights why this is being so massively missed. as an earlier poster has said...you can't argue with the numbers. and the resilience of card buying has been clear for a long time.
I think you have a few big things going on here - 1) there is still a large seller, fine but that will at some point clear and so while this has been frustrating in terms of opportunity cost I don't want to miss the inevitable clearing of him which will alone send this much higher, 2) people in the city are rich males predominantly who really really do not get the clientele of card factory - more so than the different socio-demograhic, the fact +80% of card purchases are by females adds to the lack of 'getting it' and its hard for them to understand that for many people xmas might be a budget of 80 quid for 6 loved ones and card factory allows them to fill an entire basket of cards and goodies, 3) the card factory shopping experience is not appreciated unless you really travel around and spend time in the stores speaking with staff...they provide a truly excellent experience for everyone which other value retailers simply don't do - they are generally messy and grim to be in...every CF I've been into is immaculate, clean, nice lighting and staff that make you feel good; as was pointed out to me recently which I hadn't picked up on, every person who goes into card factory is buying something for a loved one...I can't think of any other retailer where every time you buy something its for someone else and part of a little emotional journey.
if I have one criticism...they have been far too slow to do something in terms of capital allocation ie a buyback with this seller around. they could create a lot of value!!
Interesting at the last agm 7.5 per cent wanted the chairman moody gone
Wonder who has a beef with him …..interesting that
I think they are sitting on a bid
Has to be nobbled at this price and pathetic it is stagnant
Plus the buyers get a chunky div as soon as they buy
Clearly market hates paper cards market in a store model but completely ignores the hard factual metric numbers
The lack of card rns are a disgrace they should be rns new stores
Hello Stach, agree with you. Bought 22000 the other day to add to my substantial investment in Card. Thought this would fly in January but it didn't. Some games of course... But it will fly sooner or later. Hoping for a nice rise leading to the results at end April. Obviously we're all awaiting dividend news. Hard to see turnover and profit not doing well what with extending product lines, improved online product, more stores, better systems, decent staff morale and management, more relationships and global reach, and a great and simple core product with lower costs than most competitors.
Hello to some old and good posters on this bb and to the newcomers, who stick to posting relevant to this share.
The full year results to be announced must be good as otherwise CARD would not be oppening new shops in various parts of the Country.The South African store should be profitable as well and I'm sure will be mentioned in that Report.
Just bought 55000 shares this morning and expect considerable share price rise from now on.In my own opinion CARD's share prices have been grossy undervalued for to long. Stach
FY24 sorry…
I’m thinking about the millions … in the tens… they will have had by the end of of FY25… a few stores a few 100k… the rest?
...interesting to know what they are spending their surplus cash on…
Bhaveen,
They have opened 3 new stores in only the last two weeks
https://www.leicestermercury.co.uk/whats-on/shopping/opening-date-new-card-factory-9157278
https://www.gazettelive.co.uk/news/teesside-news/card-factory-opening-soon-former-28787295
https://www.petersfieldpost.co.uk/news/new-card-factory-to-open-in-long-vacant-petersfield-carphone-warehouse-unit-673844
It makes sense to take your pick of the available retail space before Interest rates get cut and the economy picks up.
You make an interesting point about net debt… I tend to think about the net debt excluding operating leases as this is what their convenants and dividend payment requirements are based on…. Which should be around the 60s millions come Q1… what’s interesting is that they have states then only aim to reduce tranche b by around 7m in 2025 whereas they could do a lot more…. So that indicates to me either plans for a dividend or some heavy capex…. Actually think their online offering is now quite strong … would be great to hear from others if they think there is a lot more they can do online
There are only just over 5 weeks to wait till Q4 res.
Bring it on!
Given their £173mio of net debt at the end of H1 I wouldnt say they're swimming in surplus cash, though likely generated ~£100mio of OCF in H2 which would make a decent dent in that and might bring them under 1x Debt/EBITDA. To be honest, Id much rather see them invest in beefing up their online presence, and dont object to their international expansion given the continuing decline in UK card sales (by volume)
It was tranche A and the covid loan… think the covid loan was paid off last September and tranche A was due end of Jan… both out of the way now…they will pay a dividend as they have declared this ambition back in may 2023 … I just don’t understand if it could be mid way through FY25 or we would have to wait till end of FY25… if nothing happens in relation to FY24 then it would be interesting to know what they are spending their surplus cash on…
Funny because debt was a fair bit more when they were paying dividends last.
Am I right thinking it was the tranche b loan that was preventing capital distribution and this has now been paid ?
Did have a look at the accounts…..increased Rev which we already knew about but didn’t spot anything else….come on Card give us that divi!
I do not think this is right. It is a wholly owned subsidiary of Card Factory…
Interesting Printcraft Ltd, Company No. 07019834
Who produce 75% of Card Factories cards and intertwined with them, located. 25 miles from Head Office is owned/directed by a family relation of Rymer. Just had a look at there accounts
Did see a card factory ad on YouTube a few days before Mothers Day. Wasn't great - wasn't terrible. I guess they're spending on system improvements, websites and store refits. Maybe time to advertise after that...
The whole Moonpig valuation vs card is sketchy … all I can think of is the broker notes that seem to indicate cards online weakness vs moon but that’s really such a messy point as cards online offering is actually good now … nice platform and better prices … just wish card would do some advertising like pigeon and pig do to show it off and drive new customers there… really don’t understand why they don’t considering all the cash they have
Too cheap to ignore, just bought some more! Rhymes!
Sadly the UK is out of favour with investors everywhere - including the UK. When UK institutions advertise predominantly US funds what chance does the UK have? And the games with hedge funds and venture capitalists... Nuts!
Only comfort I get when I compare CARD to MOON is that over the past 3yrs the respective share prices have moved as follows : Card 70 -> 50 -> 90 -> 90 ; Moon 420 -> 225 -> 100 -> 160 ... so CARD gained 30% ; MOON down 60%
However that convergence I have long been hoping for, and which was close to occurring this time last year has sadly not materialised ... yet ! Everything about the past three year's trading performance tells me CARD should be 150p and MOON 125p ... so why don't the "efficient" markets recognise this ?