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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.
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!
You’ll see. Don’t say you haven’t been warned
@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
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.
no Government debt Scorpion. The management failed to utilise CCFF. another screw up which might have averted their current cash crisis!
doubt if open offer fund raise would work for Card. Quite an interesting one MAB have used actually. Not seen that one before. In any event don't MAB have a consortium waiting in the wings? Yes, they have prime estate in their portfolio which i understand property developers are rather keen on too. Different gravy to this entirely!
Correction - up to £6k per shop - still worth £6m to CARD
@scorpion but the data doesn’t show a loss of market share. When stores were open they traded a head of PY. Yeah a bit of this was Christmas brought forward but shows the emotional attachment a lot still have to card purchases
Also the freehold estate point I get but it’s not a solvency point here it’s purely a timing point. Debt to ebitda multiple and our ebitda is low as stores are closed. Even if there are some customers who are gone (let’s say 30%) and assume no online growth (so I think a fairly strong downside case as stores went up after last lockdown and estate trading also went up) then knocking 30% of FY19 EBITDA is £56m so we are well under the 2x normal covenant period. This isn’t a solvency issue at all it’s purely a “we can’t tick that box as the stores are closed”
Raising cash will reduce that debt number and just mean we are back on track sooner
On the grants point from chancellor im sceptical we will get anything
That's a real positive and should help a good deal with reopening costs / cash flow while also taking pressure off the refinancing. Clearly, better to wait a bit to refinance if possible as the SP recovers a little...
Scorpio winger you talk absolute rubbish on your posts....
Where in earth can you see that existing shareholders will be diluted to only 10%....mate get your maths right you are wat y h
Maths right....
They are also not with rental arrears as most was covered by govt grants....
The total figure of 50m - 100m could be right but that's it. That suggests a shareholder dilution assuming a RI at 32p of between 33% to 50% NOT a 90% dilution as you imply....
@md but what on earth do we need £50m for?
This issue isn’t too much debt. It’s that the EBITDA is too low. All we need is to bridge until the EBITDA recovers
This business is very solvent and cash generative. We are just at a point where we are technically breaching a cov but when stores open we will be so far inside our covenant we will just have a silly amount of spare cash and debt headroom we can just draw the debt back and pay shareholders the RI back
Danl90, if you believe they will repay all the profits to shareholders you are very trusting. I work for one of the top ftse
100 companies and I know for certain if they had excess money some would be paid to shareholders but most would be paid to the directors as they are the ones who choose the fate of the firm.
@steve which ftse100 company is paying directors more than shareholders?
The point here is say we RI for £70m so we are at the 3x ebitda leverage point. In 12 months when ebitda is back at £80m we can go back to 2x leverage so in effect take out a big bank loan to pay back the RI. This is the policy card factory has been very clear on over the last few years just take a look at those special dividends they payed every year
You believe if card becomes profitable they will suddenly make a special dividend? I know the BOD will take bonuses as thats what every BOD does then what's left will be shared with shareholders. I haven't looked into it but have card BOD took a pay cut to support the firm in the last year? I know my company has and they are one of the most profitable ftse companies
Look at the dividend record fella. Just read your last few posts I think you seem to jealous of others earning more than you? Don’t worry about it
Thank you for letting me know my issues, I didn't realise how jealous I was. From now on I won't worry about it. I feel like a weight has been lifted.
There’s a lot of merit to what has been said on this thread. But I don’t buy into the fact that card has lost permanent market share. It’s pure unfounded speculation. CARD has a strong usp as a budget/value retailer and I don’t believe it’s competitors are able to compete on that element and many such as moonpig have no interest in going budget.
Yes card need to evolve, but I don’t think we’re going to see a mass exodus of their client base.
For me though, the bigger target is not the return to retail, but the return to socialising. Because without social occasions, there’s not much for the shops to be open for.
Google already loves card because it is called called. Mo9npig have to advertise and hope people remember the stupid name..
Card factory win already. Top of google without spending a penny. Luck I expect but good luck.
Anyway online is fake. People like shops. Buy a card, buy a bottle of wine.. done. No waiting for online to lose your delivery or smash the bottle.
I agree. Who are CARD alleged to have lost market share to? This company had some serious moat and customer loyalty the last time I checked. I must have imagined the online growth in 2020 (and that was with a poor website)
Also won't be any dips now.
Every investor in the land will see this 'best performing ' and wonder why its so cheap..
That's my call anyway... a big call but see you at £1.50. Chow chow guyssss
I’m in long, but I’m still expecting some bumps in the road. As great a business as card is, it’s been very poorly managed over the years and rather than sitting on large cash reserves, it’s sitting on large debt.
They’re being very coy about this refinancing and offering little forward guidance, so I’m expecting a nasty surprise at some point. But it will recover and card will head north because a return to profit is almost a given.
@carllapos - have you not seen the Restaurant Group refi? They are giving cash away and waiving covenants
Well said Carllapos. Too many here do not want to see the negatives but are all too quick to shout about the positives. You need to evaluate both sides and ultimately make your own choices. Paddy did not press sell or buy for you...that is your decision. I sold...not because of Paddy but for me I was happy to bank the profit. Yes I would have loved another 20% today but hindsight is a great thing. Card has potential to go on from here but as Carllapos has said...it is not without risk. Enjoy the rise but don't allow the conversation to become one sided...if someone is not your cup of tea stick them on ignore.