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I would agree about your suggestion on how easy it is to navigate the site, but they really do have to get a better ,more up-market range too i believe. There is loads of scope to be had. Some lovely cards in smaller outlets which could be introduced into their range. The profit margin may not be as high as producing them all in house, but i'm sure would attract more business. I'm a long term frustrated holder!
So the government is opening up non essential shops on the 15th June , hopefully that can kickstart
card Factory, now that should lift the shares tomorrow , excellent decision. GLA
Well people were saying I was de-ramping here at 95p, let the share price do the talking then, I hope I’m totally wrong though, and card Factory ends up being the remaining and best card selling shop on the high street. GLA
thomasbrowne, " there will be a large number of people still to afraid to visit the high street" you lost your credibility there. It's too afraid not to afraid. Your illiterate de- ramping is pointless . It will be up tomorrow.
Eliasjones that’s a fantastic summary sir, excellent,
Though would I still jump in and invest right now !!!
“NO” card Factory should have held onto there special dividends and payed down there debt levels, ask warren Buffet about that, with his $130 billion of banked cash, that’s the way to do it, save up and buy into cheap companies in trouble during a recession.
Maybe he will bid for card Factory if things get bleak ,
I would just love to buy card Factory again , but the high street is weathering away, and things could turn bad and very quickly for card Factory , that’s my
thoughts around everything, just look at how many stores are closing, and I assure you we’ve seen nothing yet, in my honest opinion there’s going to be a bloodbath in retailers in the coming months and years. I know, I’ve spoken to enough of them , from the horses mouth I listen and learn. Can you imagine hearing these things and then go and buy a high street retailers shares, no thank you, I need my sleep. Seriously strip out social distancing and card Factory will still struggle on the high street, but that not guaranteed at all, as I’ve said I truly hope I’m wrong here. The risk is just to high to throw in a couple of thousand pounds to card Factories shares, I see better risk around with better rewards.
The company have been investing in the online platform and this is now clearly proving to be a godsend, the Cardfactory.co.uk is a growing sales channel, with growth of c.25% announced at H1 from the Cardfactory.co.uk website. Full year results are due on June the 2nd 2020 and this is one element I will be looking closely at and the updated strategy update on the 28th of July, which will include maximising the gettingpersonal.co.uk avenue I am sure.
Much like the crash of 2008, retail was forced to change and this will be no different, the beauty of Card Factory going forward was the investment in the online, and the website is very easy to navigate, effective and with a personalised bespoke option which is very good to see. Following the Covid-19 lockdown we have seen significant growth in visitors, conversion and sales via the online channel. The Cardfactory.co.uk web site has delivered sales growth of 267.5% since the lock-down with Gettingpersonal.co.uk at 57.5%. In response to this increased demand, and to support social distancing, Card Factory have established a second fulfilment unit in Wakefield.
The company is also benefiting during lockdown from the agreements to sell its ‘everyday’ cards through the entire Aldi estate which have remained open and in Australia through the exclusive five-year retail supply partnership with The Reject Shop. They also have agreements to benefit sales with Matalan and three franchised outlets in new markets Gibraltar, Jersey and Guernsey. I would expect more of these type of sales agreements to materialise in the near term.
Based on the above, Card Factory (LON:CARD) is a company I was happy to add to the ISA as a value recovery play coming from a Covid-19 bashing.
Ticker code: CARD, Shares in issue: 342m, Current SP: 28p, Market Cap: £98m, 52 Wk Low: 22p, 52 Wk High: 199p
Card Factory (LON:CARD) rates 99 on Stockopedia Value ratings, with an overall StockRank of 64, and impressively hits green on 7 out of 9 on the Piotroski F-Score which aims to identify the healthiest companies amongst a basket of value stocks through applying a set of nine accounting-based stock selection criteria.
Balance sheet wise, the cancelling of the dividend to see through the pandemic will help with liquidity and the company is also accessing all the Government Covid-19 support schemes, including furloughing of over 90% of staff and utilising the loan scheme. They have also done all the other things you would expect such as cutting back non essential capital expenditure, negotiating rent with landlords etc.
Debt wise, Card has non-current liabilities, which is a debt not falling due within 12 months, with the finance expenses at H1 amounting to £4.2m. Within the non-current are the borrowing facilities, which consist of a £200 million revolving credit facility terminating 31 October 2023 with an additional £100 million accordion. Borrowings under this facility attract interest at LIBOR plus a margin in the range 1.0% to 2.5%.
Generally I have been looking for retailers which are well run and historically well performing which I believe will see the Covid-19 crisis though and who have a commitment to reinstating the dividend payment as soon as we get to the other side.
Card Factory (LON:CARD) clearly fits this brief, it is the leading specialist retailer in the large and resilient UK greeting cards market, the British public spent £1.7bn on cards in 2018, with generation Z (18- to 24-year-olds) buying more cards than any other age group according to the 100 year old Greeting Card Association’s 2019 market report. On top of the greeting cards the company is also into the associated market of product sales including gift dressings, small gifts, and party products, which is estimated by management to be worth £2-3 billion.
Established in 1997, Card Factory (LON:CARD) IPO’d in May 2014 and over the past 6 years, £344.3m has been returned to shareholders in the form of dividend payments, which is equivalent to c. 45% of the IPO price.
This is a well-run company and the numbers as can be seen in the table are of good solid performance.
They operate from a 1,000 stores and via the website and the current share price is currently sat on 28p and that being 86% down on its year high of 199p. Three years ago the market cap was sat on a billion pounds, a far cry from the £98m today. The company is trading at less than 2 times net profit (if you believe they will get back to pre Covid-19 performance) and although its products are the cheapest on the market it maintains an industry leading operating margin 16.3% due partially to the vertically integrated business model with an in-house design team, an in-house printing facility and central warehousing facility.
As we move from only the essential stores being open to now the non-essential potentially being allowed to swing the doors open from June the 1st. I have been picking up value stocks in this retail space. One was Scs (LON:SCS) which have now opened their doors for trade throughout England as furniture retailers took the key to open after the government subtly clarified its definition of “essential” retailers on 13 May to say homeware stores were included, rather than its earlier definition of “home and hardware” stores.
A bit riskier than my Scs (LON:SCS) ISA addition is Card Factory (LON:CARD), however potentially the reward could be greater, I will share my thought process on adding this company to the ISA.
The Covid-19 pandemic has been particularly brutal to many sectors, non more so than the retail sector. Having said this some retailers have done well and proved resilience due to the ‘essential’ element of their product offering, with the supermarkets seeing everyday pre lockdown a Christmas trading day and empty shelves became the norm at Tesco (LON:TSCO), J Sainsbury (LON:SBRY) and Wm Morrison Supermarkets (LON:MRW), having said this, bar the initial excitement of the increased buying, their stock price has reverted back flat but resilient on year, probably down to the restrictions and increased cost of sales post lockdown and which may continue to be seen for a long period yet. The purely online retailers are once again in a crisis is the best position to be, still on the food retail theme the share price of Ocado (LON:OCDO) has gone up over 100% in the past two months, valuing the company at a mouth-watering £14.65billion, not one I would touch on its financial numbers.
Most retailers are shut on the bricks but still live on the clicks element of the business albeit at a slower rates due to extra measures in the process to protect the employees. One clothing company seeing good support by its loyal customer base in terms of an uplift in online sales and support by its financial backers to see it through is Joules (LON:JOUL) Being an essential supplier, Wynnstay (LON:WYN) the manufacturer and supplier of agricultural products and a StockRank 100 company has remained very robust and those who spotted this would have bagged a real bargain at 200p in early April.
Halfords (LON:HFD) hit 51p in March and is now sitting on 166p, again a quality company who have benefited from the essential retail category to remain open due to the car servicing side and what has been an absolute flyer for them has been the bikes, with many buying for the one a day exercise on lovely quiet roads, or as it is now as many exercise sessions you want per day and on much busier roads!
Another company in the bicycle space what has rallied well over a 100% since the March lows is Tandem (LON:TND), a company scoring 8 out of 9 on the F-Score.
Covid-19 Retail Performers and a Bashed Pick - Card Factory
Covid-19 Retail Performers and a Bashed Pick - Card Factory