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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
https://app.stockopedia.com/content/covid-19-retail-performers-and-a-bashed-pick-card-factory-611923?order=createdAt&sort=desc&mode=threaded

Covid-19 Retail Performers and a Bashed Pick - Card Factory

https://app.stockopedia.com/content/covid-19-retail-performers-and-a-bashed-pick-card-factory-611923?order=createdAt&sort=desc&mode=threaded

The retail sector has been badly hit for obvious reasons due to the Covid-19, however opportunities also present themselves to pick up good value stocks, and for me £SCS is one that falls into that category, hence adding to the ISA along with another couple of retailers including £CARD which I will also share my thoughts on time permitting over the next few days.

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.

ScS moved quickly as the Covid-19 situation progressed and have utilised the Government schemes available to protect the financial situation. Including the £12m inflow from a revolving credit facility, as at 23 March 2020, SCS held £74.8m in cash.

The company noted on the 6th of April on holding back the interim divided:
“Our focus in recent years on building a business with increasing resilience is reflected in the strength of our balance sheet and the level of flexibility in our cost base. We cannot predict the impact of COVID-19 but we believe the Group is as well positioned as it can be.”

“Despite the strength of our balance sheet, the Board feels that it is appropriate to suspend payment of the interim dividend, which was due to be paid on 7 May 2020. At a time when the UK Government is supporting ScS, it seems inappropriate to use the cash for anything other than protecting the financial strength and resilience of the business.”

ScS, or to give it its full title the ‘Sofa and Carpet Specialist’ is one of the UK’s leading furniture and flooring retailers and have over 100 years of furniture and retailing experience. The operate from a 100 stores and via the website and the current share price is currently sat on the 52wk low of 128p and that being 51% down on its year high of 258p. On the current market cap of £48m, this compares favourable with a net cash position of £63m stated at the end of March. The company is trading at less than 5 times net profit (if you believe they will get back to pre Covid-19 performance) this compares favourably to the market leader £DFS who are on 7.8 and with a weaker balance sheet.

ScS with an overall StockRank of 91, hits green on 5 out of 9 on the 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.

Having just announced on their website this bank holiday weekend that all its stores located in England are now back open under the new safety measures the company can start to rebuild following the shut door period.
With the economy dipping into recession and the likely housing market stagnation certainly this year and fewer people moving house, coupled with restrictions on flights and actually the confidence needed to be in the air in a confined space, I believe more people will invest in their homes later this year and will spend on things like new sofas, furniture, carpets and tables, with the 4 years interest free credit being a huge bonus for some families.

ScS for me is well placed to survive the Covid-19 due to the strong balance sheet, established market position and actually selling a product that I believe will benefit this year from the stagnant housing market and stay at home theme.
Recent investment in the e-commerce offering has driven an online sales increase of 24.5% to £9.8m (2019: £7.8m) at the half year stage, this again has helped the company during the lockdown period where the company has still maintained its website and active twitter feed to drive traffic with 4 years interest free credit, deals of the day and offers of money off if you buy before midnight.

I have previously shopped at ScS purchasing a 2-seater for the conservatory, no complaints at all to be honest and would shop with them again. ScS continues to focus on customer service with an "Excellent" Trustscore on Trustpilot which is based on over 200,000 reviews, one of only four companies in the UK to reach this milestone.
Based on the above, ScS Group Plc is a company I was happy to add to the ISA.

Ticker code: SCS, Shares in issue: 38m, Current SP: 128p, Market Cap: £48m, 52 Wk Low: 128p, 52 Wk High: 258p

Retail Pick - ScS Group Stores Now Back Open

https://app.stockopedia.com/content/retail-pick-sc-s-group-stores-now-back-open-611788?order=createdAt&sort=desc&mode=threaded

Ted is struggling to beak out of £1.5 / £1.6, and is in a range being controlled by the algo’s £1.20/£1.60 which probably accounts for the differences in the shorts we see here.

https://shorttracker.co.uk/company/GB0001048619/

Will see more shorts closing in my opinion before the report is out over the next few trading days.

“Ted’s strategic priorities and Transformation programme will be detailed in full at Ted Baker's Full Year Results which are expected to be announced in MAY.”

Got a feeling either a large buyer or short trying to close in Ted Baker over the past few days before the full transformation update and annual report due any day.

Ted Baker was over £3 end of Feb, over £15 a year ago, some very positive corporate developments recently, good potential from £60m cap.

The due update is set to report last years profit of £5m-£10m, along with a transformation update could see this back to Feb £3

Ted Baker poaches Arcadia design exec as creative director

“We look forward to welcoming Anthony, whose experience at a number of high-profile brands has given him an excellent understanding of what it takes to amplify a brand and make it more relevant,” Ted Baker chief executive Rachel Osborne said.

At Topshop, Cuthbertson was responsible for overseeing all design and product as well as designer collaborations, Idol and boutique collections.

Prior to that, he was the design director for Roberto Cavalli, based in Italy, where his remit included menswear, womenswear, accessories, beachwear & swimwear, optical, children’s, bijou, home and all licensing products.

“His experience will be particularly valuable as Ted Baker sets out to expand its product and its relevance, a crucial part of its strategy to return Ted Baker to profitable growth,” Osborne said.

https://www.retailgazette.co.uk/blog/2020/05/ted-baker-poaches-arcadia-design-exec-as-creative-director/

Next piece in the Ted Baker turnaround they have appointed Arcadia’s global design director for Topshop, Anthony Cuthbertson as its new global creative director.

This chap has a really good pedigree.

Retailers will be bought next week as almost certainly to be included in Borris Johnson update next weekend.

Ted is over 90% down on year, plenty of upside from £62m market cap.

Good chance cone the next announcement in a week and a half that shops can open. Ted Baker has a lot of ground to make up, new CEO, CFO, New Chair Ex Next, sale of building £76m, internet sales c33%. Staff savings £5.7m, Rates savings £6.2m, transformation plan in place, annual report out any day now.

Great entry price imo

Could get quite decent quotes in the last couple of weeks but the MMs have put limited online quote to 6,000 shares under 44p, might start to trend back to 50p send over.

Could well see increased dividend payments now, outlook positive especially with the contribution from the acquisition and new orders to impact on H2.

Bottomed out by the looks of it, some news from the new Far East office could well come, must have been some good inclination of security orders to set up there.