Member Info for gulfharbour

Moo7j,

There is no need to keep your concerns to yourself, however all the points you raise plus others have been recently tabled and discussed at length on this and other bulletin boards.

You are correct that the CARD business model is different and more robust (imho) from many other retailers, partly because of their tight cost control and vertical integration of the business, plus the fact they are acknowledged cost leaders who should have the ability to raise prices slightly to offset wage related cost increases, whilst still maintaining cost leadership.

To me the wage related cost increases appear to be the only significant negative here, but there are a whole raft of other positive factors to consider including:

-recent CARD acquisition of Garven in US

-recent conclusion of a separate US distribution agreement

-early December Garven acquisition RNS also reiterated that CARD were on track to meet the FY financial targets

-recent insider share purchases

-multiple anectdotal reports on this board of heavy CARD store footfall compared to other adjacent retailers including Shoe Zone

-they are in the middle of a cost reduction exercise which has been confirmed as being on track to deliver expected results

-increasing momentum during 2023/24 to move reliance away from a very high weighting on lower margin greetings card business, to expand heavily into the higher margin gifting segment which is evident from visiting any CARD store, plus viewing improved financial results over the past 2-3 post-covid years

-significant reduction in net debt down from (from memory only) £141m in 2020 to £34m 2024

Finally, you should bear in mind that CARD financial results are heavily weighted towards H2 i.e. circa only 1 third of profits occur during H1 while 2 thirds of profit is earned during H2.

The proof in the pudding will be when the next trading update is issued on 14th Jan.

I've just received a response from Card Factory Investor relations who confirm the trading statement will be issued 14th January, so just 2 weeks to go!

Thanks Alnwick.

I have made a note of that date, and if I do get a response from investor relations will post it here.

Xhita, I hope you are right with your Q1 predictions which are slightly more optimistic than my own thoughts.

Given the SP is drifting back from the recent 580's (largely in line with the wider market malaise), I would love to see the Q1 quarterly update include some statement indicating that a share buyback could be one of the future options to generate shareholder value, although I accept that type of statement is not normally included in a quarterly update.

Seeing the assistance given to the IAG SP which has risen 30% since their early november buyback announcement, I would love to see EZJ follow suit, even if initially only at low buyback levels.

That sort of buyback would at least be a start to redress the additional shares currently in play as a result of the Covid rights issues.

Hardly a massive purchase, but as you say it all helps.

I have today emailed CARD investor relations asking for confirmation that they will be issuing the January trading update as they have done the past few years, and to confirm an expected date.

Assuming they do issue the update during January we only have 3-4 weeks to wait to get that update which should include commentary on the key Christmas period including UK partnerships, plus the US Christmas trading news following the takeover of Garven and signing of the separate US distribution agreement.

Agreed that the current SP seems crazy and I am very tempted to add at these prices.

The only thing really holding me back is that the current 11.5% yield is covered 1.1 times which is quite a low divi cover level, and this is my only real current concern about SEIT.

IMHO the low SP seems to indicate that the market does not believe the current divi level is sustainable, however the SP is trading at a massive discount to the NAV of 90.6p which was only announced a few weeks ago.

That is a very strange disconnect between SP, divi yield and NAV which I really don't understand.

I see that the next earnings date is 26th Feb so that should give better clarity over the true direction of travel for SEIT.

Seemingly CARD has dropped due to today profit warning at Shoe Zone which has so far resulted in a 42% drop in their SP.

The market clearly views CARD as a similar (retail) type of business and has maybe signaled that it thinks other retailers may also be adversely affected, however as we all know CARD is a different business that is growing revenue, profit, product range and market penetration supported by an increased number of stores, acquisition of Garven, and the US distribution agreement.

I thought I had bought well yesterday when I topped up at 97.8p, but the SP drop today is too much to ignore, so I've bought another 6k at 95.1p.

That probably needs to be my last purchase as this is now my largest holding, and I don't like the thoughts of the SP being mucked about too much more by "the market"!

thats really quite a sad outlook on life ian which goes some way to explain the depth of **** this country is currently in.

I also meant to add that this is a strong buy imho.

DYOR etc

I agree that this drop seems crazy, so although I don't normally go along with conspiracy theories, you have to wonder if it is being manufactured in some way.

Obviously "the market" sets the price and must see CARD differently from mere PIs', but I really believe the current fair value is probably closer to 150 which we were close to only last month.

I've just bought another tranche at under 98p which seems an absolute bargain, and this is now my 2nd largest holding behind EZJ which I also think is drastically underpriced.

Agree the RNS wording could have been clearer but it stated they were 2 separate agreements (or similar wording) therefore my take is that Garven is additional to, and presumably complementary to , the distribution agreement.

Hi all.

Some small pendulum swings up and down recently including a 2.5% drop today on fairly low volume, but overall the trend over the past month has been positive from the lows of around 79p on 19th November.

All the while the cash tills are ringing and the board has reiterated full year guidance which implies strong performance up to the Jan trading update during what is CARD busiest time of the year.

My most local stores have all been very busy with High Wycombe and Gerrards Cross very busy on Saturday, plus today in Amersham the smallish store had 9 customers including me when I visited this afternoon, 8 of which spent money at the till (including me).

I am itching to see the content of the next t/u because every time I pass a store in the past month they always have plenty of customers, and that seems to be the experience of other posters too so long may that continue!

Additionally we should get positive updates on the US distribution agreement, plus on initial performance following the acquisition of the Garven business.

I would love to hear other posters comments on activity at their local CARD outlets.

Those extra shares in issue, plus the persistent (perceived) undervalue in the SP, are both good reasons why the next results should include a buyback element.

Even if its not of a massive scale, that would signal intent to the market.

Very encouraging rns this morning but you never know till the market opens his it will be received.

As seen, the market reaction has been very good, so the recent sub 80s sp seems even more crazy.

Without wanting to tempt fate, I think I can smell shorts burning.

Half the daily volume in first 10 mins of trading

Back in profit for first time in month and a half.

I'm so glad I took the chance to top up in low 80's, and at 79p only a few weeks ago (seems a lot longer).

Is this the start of the re-rate running into the peak christmas period?

Card Factory High Wycombe was busy on Saturday, and the nearby Gerrards Cross (which is not a large store) had 11 shoppers and 2 cashiers busy when I visited it this morning.

I was also (pleasantly) surprised that only half the store was dedicated to cards, and the other half was given over to the higher margin gifts such as toys, mugs, calendars, and the like.

The cashier I spoke to said they had been busier than usual for the past couple of weeks, and that she was looking forward for the Christmas rush to end!

I hope this augers well for Jan update.

Todays volume so far is only just over a third of the average daily volume, so although the drop is bloody annoying, it wouldn't surprise me it there was a rebound tomorrow.

Just bought a further 10k at 86.4p, and intention is to hold this tranche until at least the Jan trading update which I expect to be very strong.

Can you put me down for £621m please