Member Info for Carllapos

Aimtitan,

Exactly, peopling just comparing the SP to last year is madness. Although, the cap raise has added for the balance sheet, so we can’t just look at market cap either. The best metric would probably be the EV, but I haven’t actually worked this out to see where we stand.

I think even pre covid, brown was undervalued to be honest as it had become unloved. So there is plenty of headroom here and minimal downward risk. But we need to see genuine and sustainable growth over the next 6-12 months and we need to also see a return to dividends. At this point, we may breach 100p and can then look to the future, but I can see this being flat for some months now.

As your post shows, there is serious value here in browns. What there isn’t, is hysteria like Boo had and nor is there market confidence just yet.

The market expected/wanted to see YOY growth and we haven’t had it. There is an element of
Conservatism from the BOD here which is a double edge sword and has worked against us today. They also have a very different demographic to BOO/ASOS with different spending habits.

The future is solid for Brown, the RNS wasn’t bad, it just didn’t meet market expectations which has caused an exodus of speculative shareholders. But the fundamentals of browns remains unchanged and the long term holders will still prosper.

It may well has been 140p last year, but it dropped heavily on January’s results last year and we’ve had share dilution this year too. So you can’t look at 140o as a simple benchmark, to get back there we need to show YOY growth.

This isn’t a bad RNS, but I don’t think it’s one that’s going to attract a load of investment.

It’s created uncertainly, I think the covenant will be renegotiated paddy thinks there will be a rights issue......one of will be right......or maybe both!? Ha ha.

That’s a bit like asking whether Selfridges will eat up primark of whether Marks and Spencer will eat up Poundland.
A totally different demographic.

Given the news of the potential covenant breach, I think the SP is holding up well and the run in to close will be interesting. This is a small cap stock, so it doesn’t take much to move it 5% as we’ve seen many times in recent months. So all in all, I’m happy with how it’s held up so far and perhaps the sales have largely been investors that were betting on the results rather than a run for the hills?

Not sure. Boo and ASOS investors tend to have rather high expectations and already have a ridiculous PE ratio. Browns has a lot more headroom and still sits well below dec 2019 levels.

It’s done 30% In recent weeks, so there’s bound to be some profit takers. I’m betting on good results tomorrow, but I honestly don’t know how they will be received by the market and what general market expectations are.

Good post.

When people buy in store, there basket value goes up compared to online. There will also no doubt be an element of people wanting to get out of the house and find any excuse as they rediscover their freedoms!
Massive back log of weddings and christenings. massive backlog of parties such as missed mile stone birthdays that will likely be made up for etc.

I have zero concerns about CARD’s ability to return to very profitable trading. I think the balance sheet is the main issue that concerns the market and presents the risk of an RI.

I do agree with your comments and more should have been done to push their online offering.

However, with the lack of weddings, birthday parties etc etc. I should imagine sale of greeting cards are down a fair bit regardless of this.

The pandemic won’t last forever, CARD will move on from here and return to pre pandemic sales volume and perhaps beyond. This is short term pain in my opinion and it wouldn’t be such a bargain stock had things been managed perfectly.

They have a regulatory responsibility to report a potential breach of covenant. But I agree that it’s in the banks interest to extend terms and card has proven that it can bounce back and trade well.

CARD really should have fixed the roof when it was sunny though. I hope lessons have been learned.

Hard to advise as it’s not my money. If you are in a position to forget about the money for 18 months, I think you will do just fine. But if you’re going to need that money within 6 months, then you may be better getting out now whilst you are near break even point.

An RI is by no means guaranteed, but it is a realistic proposition.

Why not sell half of your holding? That way you lower your exposure and can also subscribe to the RI should it happen.

Lorenzo,

I did top up in this mornings dip, which was perhaps premature. But it was only with funds from when I reduced my holding leading upto the results. So either way I’ve reduced my average. My gut instinct is that the covenant will be renegotiated off the back of the positive trading figures of the last 6 months.
Brighter days are ahead and then banks hopefully won’t view card as a default risk.

But I could well be wrong and paddy could well be right! So it’s going to be an interesting few months.

I’m here for a couple of years at least and will subscribe to any share issue, so I’m not going to lose sleep over it.

Capital raising isn’t always the end of the world if there’s a clear strategy and path to profit. I took part in brown group recently and that’s gone very well for the SP. so let’s watch this space.

To be fair, the trading element of the update wasn’t bad and it would imply that they’ve actually clawed back over half of H1 losses.

But the kick in the nuts is the covenant breach, until this is resolved, there will be a lot of volatility. I still think the future is bright for Card as it’s a consistent cash generating business, but lessons must be learned.

No arguing with that Paddy.

We need to get to the end of the month to know what’s going on with the covenants. If they car renegotiate then the SP will recover, if they don’t and and RI is looking likely, we’re going to head back to low 30’s

I’m happy with the long term potential, so just riding the storm.

Ringo,

I can’t argue that card has been mismanaged in the past. But none the less they’ve turned very healthy profits with good net margins. So I really don’t see going bust being on the cards (excuse the pun )

Changes are already been made and net debt has been reduced despite the awful year. I think lessons will have been learned during the pandemic and that card will be a better company for it in the long run.

Poker. I can’t get my head around the chocolate gift scenario, boggles the mind!

Thanks Pokerchips, I’m on my iPhone, hence the spelling errors with fat thumbs! Ha ha

Dacorum,

Was you hidden away in a cave in November? All non essential retail was closed nationally for 1 month!

Paddy, in the update it said the terms off CCFF changed making it unavailable to them. I read this as they never had the opportunity, but are you saying they has a window to get this and missed it?

Sorry for spelling errors, it drives me mad that you can’t edit posts ha ha