Member Info for LorenzoLynch

… that this stock starting moving again!

Promoting Pippa to MD following her temporarily stepping in after Bernie’s departure looks like a huge vote of confidence to me, and a deviation in strategy away from the one that resulted in the recent mess.

With inflation falling and interest rates expected to start falling in the not-so-distant future, everything seem to be lining up nicely for a rebound here.

I envy those who were able to load up at 20p.

I’m furious that I missed the RNS regarding the MD change, however. How the hell does one sign up for RNS alerts for CRL?

… one of them being the market’s incapability of understanding the RNS announcements. I take a balanced view on today’s RNS. Imo, before today, it all hinged on Phase 2… and today, it still all hinges on Phase 2. It’s now clear to me why we only ‘tested’ such small areas; both for licensing and de-risking purposes, it seems.

The positives are being massively overlooked by some imo; just as the potential/likely issues with Phase 1 testing were overlooked. The lack of information relating to MOU-1 makes me cautious, however.

There are so many geniuses on here who offer very little other than criticism, whilst others offer nothing more than speculation and fantasy. I can’t recall any of the trolls foreseeing this, even though it was clearly referred to in prior RNS’. Countless times people have asked ‘why sandjet?’. Well, you have your answer now.

Morocco remains high-risk/reward in my opinion. I’m only here for Morocco, so Phase 2 is a make or break for me. I am optimistic about Ireland, but I dread to think where the SP is heading if Morocco falls apart; likewise with shareholder equity.

The question I keep asking myself is will MOU-5 be drilled before Phase 2 commences? My preference would be for this to take place and add it to the Phase 2 testing programme (if the drill is successful, of course).

GRH, I’ve found your insight of late even more useful than usual. Thank you, because I’d be lost without your pointers as to where to look.

Soon, I believe, the speculation (both positive and negative), will finally be laid to rest.

Disclaimer: My knowledge in this field is extremely limited. Do your own research.

For putting my hat on straight earlier. I was snowed under at work, so could only glance over the RNS (which I read as a merger), but then I read a mainstream article, which very much packaged it as a straight takeover.

On my break, I took a deeper dive and found myself in agreement with you guys. I did a few valuations (post-merger, post-synergies, earnings upon recovery etc), and no matter which method I used, I was left underwhelmed.

Long story short, I sold my shares today, and I’m absolutely dumbfounded at why this merger has been recommended by the board (I certainly can’t think of a way in which it benefitted normal shareholders). I expected near £9.50-£10.50 per share from RDW, upon a housing market recovery, and I tend to be conservative. By my reckoning, there’s about 35% upside, with all being well, and with a time horizon of over 2 years.

I still own a small holding BWY (previously 50% of my HB weighting with RDW), but my days of being invested here are very much behind me.

There seems to be some confusion with the RNS. To me, it seems very straightforward, but the below information is just in my opinion (see the more mainstream articles for a more simplistic breakdown of the RNS).

£6 per share (closing price) + a 27.2% premium = £7.63 per share.

The market hasn’t noticed yet, nor have the institutions had time to wade in. Once the investors who don’t understand the RNS have sold out, the volume should bottleneck, sending the SP to somewhere very close to the £7.63 sale price. I think we’ll see £7.40(ish) in short order.

When my other stocks have been bought out (SCS last year, for instance), they’ve followed this process.

Why anybody would sell, or even trim, at this price, is an absolute mystery to me. To me, it’s like being promised 27.2% (or even 20%) above market value for your house at 3pm…. But still selling it in the morning at market value… hardly smart investing imo, but each to their own, it certainly doesn’t affect me.

Do your own research, and congratulations to all holders

The market hates uncertainty, and while there is hardly any uncertainty for me (or any other remotely discerning investor), some people like to be spoon fed. They wait until the cat is completely out of the bag, and the opportunity is missed… such people certainly weren’t invested here at 30p, when many of us were.

Moreover, the market had certain expectations for the level of information provided in the RNS (dividend reinstatement, an update on net debt etc), and these were not met. In my opinion, the RNS told us everything that we needed to know in order for us to draw enough conclusions as to the direction of the company… i.e progression towards our targets of being in a net cash position and/or reinstating the dividend. Personally, I would rather CARD go completely debt-free, as this is more tax efficient than paying dividends, but for a share price rally, I must admit that I believe a dividend reinstatement would act as a far better catalyst for igniting the share price, forcing value investors like myself towards the exit, as the dividend brigade make their purchases.

All just my opinion; draw your own conclusions and DYOR, as always

Nice to see that you’re still invested here Roxbury House

Trendz,

I was holding SCS recently in utter disbelief at how cheap it was, before the inevitable takeover bid came in at about 20% below my estimation of fair value (being conservative). There’s a significantly greater discount on offer here in my opinion, so I really wouldn’t be surprised if a bid comes in soon.

There’s no point in people pointing the finger claiming corruption; the bottom line is that the market is full of neanderthals who can’t value companies. I’m not complaining though, I just increased my holding by 17.6% at a nice discount and now I’m looking forward to the annual report.

It’s only a matter of time before fair value is achieved here, in my opinion. I’m in no mad rush for my money. Long may the share price slide continue

Dcov,

I fully agree on prioritising debt reduction, for the benefit of the business, but the market never seems to fully price debt in, so I think a dividend reinstatement would generate far better short-term shareholder returns. My status as a shareholder probably hinges on this, if I’m honest. That said, the outlook for next year could be so positive that this matter becomes rather insignificant. We’re still nowhere near fair value imo; I will reevaluate when that gap has closed to a significant extent

The card factory in Aldridge was rammed when I went there at 16:45 on the weekend. Not due to indecisiveness either; people were moving through quite swiftly and the tills were working even harder than the staff.

Personally, I have never been so impressed by CF’s selection and quality of cards. I noticed the price increase, which is something that pleases me. If you want something cheap, they’ve got you covered; likewise if you want something more impressive.

Things have improved immeasurably under Darcy. As a man who despises shopping, I must say, it was a seamless experience with exceptionally helpful staff (I almost accidentally took an additional envelope, but the member of staff kindly insisted on returning it to the shelf for me). The shop was clean, tidy and the staff were in good spirits, as were the shoppers.

CF appears to be progressing on all fronts, and at quite a pace. I didn’t look at the gifts, because I was in a rush, but I was able to purchase unique cards for all of my immediate family members in no time at all. It’s an honour to own a small part of such a remarkable organisation. It’s such a strong business in fact, that nobody even attempts to instil FUD on here (oh how times have changed!)…

To summarise this company in a word, imo: bulletproof

Starmog,

Agreed on EH. Brodie and Stone made sense imo, and I think we could see some nice sales as the economic struggles really take hold in the U.K. It was, at the very least, logical. The sum paid and timing however, was questionable.

Emma Hardie however, was a shambles in every way imaginable. CRL’s margins and return on capital have never justified borrowing money at such high interest rates, let alone for the purpose of buying a luxury brand that barely broke even good times, during an economic crisis! It was completely irresponsible and it demonstrated that the management team know absolutely nothing about economics.

The extra cash and lower interest payments would have seen us in a very different position at the moment.

William and Pippa, if you follow this board, please find an MD that understands inflation, interest rates, cash flow, short-term debt cycles, how to treat employees, how to advertise effectively on social media (use influencers and it’ll cost peanuts!), and how to develop a company’s general online offering.

There’s a huge opportunity for a turnaround here, but for me, it all hinges on the MD appointment. If another clown takes the helm, I’ll cut my losses.

I must admit that I had some sort of blind faith in the Emma Hardie acquisition at the time. I strongly disagreed with the payment terms, the amount paid and the timing etc, but I thought ‘they must simply know much more than myself and the other shareholders’. Couldn’t have been more wrong. Would love to see a presentation, but I doubt they’ll have the audacity. Would be nice to hear more in relation to the strategy moving forward… you know… a plan… and one that actually involves people using their brains.

Lastly, I must say that I now agree with your stance on Pippa becoming MD; I would much rather us get somebody else in. Just look at how Darcy has turned around Card Factory in no time at all

Starmog,

Personally, I think the negatives are more than priced in by the market; a stark contrast with how the market overvalued the company (imo) previously when it was around £1.30 per share.

Should Bernard offload his shares, it will create one hell of a top up opportunity, so I don’t fear this at all. I think it’s futile to speculate on this matter, unless one is trading (something I rarely engage in), but you make a valid point regarding short-term price movements. If I was in his shoes, I’d want to pass those shares on to my offspring or sell at fair value, when that is achieved.

Usually, I would be topping up right now, given the valuation, but I must admit, I want further clarity before I commit to a top up or a sale of my shares.

Myself and the other Creighton’s investors I know (friends and family), all hold Pippa in very high regard. If she takes the MD position, it would certainly settle my nerves.

The big question here, for me, and the only question I think any of us need to be asking, is ‘what exactly has Bernard done to be sacked so abruptly, and what impact does this have on the business?’.

I think we are all unanimous in our stance of this being a ‘wait and see’ situation. I think the SP could continue to slide if the board fail to elaborate on yesterday’s RNS in swift order.

I don’t see why Bernard would want to offload his shares, unless the company really is in dire straits, and if it was, I don’t see why he’d be sacked with no explanation. Moreover, there was no profit warning and the directors haven’t been selling en masse. If we disregard this black swan event, there’s huge upside here, potentially, so for now, I’m holding, but I must admit, I am concerned.

I don’t like to speculate, but the wording in the RNS appears to suggest gross misconduct to me, as there is no ‘thank you’ for his services after 20 years (or so) of being MD.

The fact that it appears to be a sacking, and not a suspension, implies to me that whatever action has been taken, is regarded as unforgivable, and the evidence must have been beyond any reasonable doubt.

Brown envelopes or the like? A complete breakdown of relations with the rest of the board (he seems to be a very assertive man, possibly to his own detriment).

At this stage, I think it’s far too early to write the company off, and this could provide us with a huge turnaround opportunity, with fresh ideas and a more suitable MD. For example, the website (at least from mobile) is unsatisfactory. Customer service could be improved. Staff desire and deserve better treatment. The acquisition of Emma Hardie appears to have been a shambles in every way imaginable. Cash wasn’t preserved effectively in the face of serious headwinds (imo). There is certainly a lot of room for improvement.

I was hoping that Bernard would part ways with the company, but upon recovery and due to retirement. This is a curve ball, but it’s certainly not the kiss of death… just yet… I hope

Trendz,

I strongly believe that we’re less than 8 weeks away from me being in full agreement with you. I also agree on your stance about the valuation continuing to grow into perpetuity.

When the debts are completely paid off, the cash will have to go somewhere. Expansion, dividends, buybacks etc are all possibilities. I can’t see any reason why earnings won’t grow y-o-y for the foreseeable future, and the management team have some very ambitious targets moving forwards. I won’t mention future valuations as I don’t like to speculate, but IF their revenue targets are met and a healthy margin is maintained… Jesus Christ

The perfect storm seems to be brewing for CARD imo.

- The decline in household disposable income is leading to bargain hunting for consumers.

- We’re already well into the turnaround, and CF was very profitable last year, even in the face of high inflation.

- Inflation has cooled down and CF’s prices have been increased.

- We’re nearing a position of net cash.

- Lower debts = lower financing/interest costs (I.e. the I in EBITDA)

- Dividend reinstatement is likely fast approaching.

- U.K. stock market sentiment seems to be changing, for the better.

- Jan update, following Xmas, could and should be very positive.

It’s remarkable how quickly things can change with good management in place.

All imho.

I ran my own calculations yesterday, and I think we’re on course for £1.50 per share in short order. I hope, and believe that this will be achieved in Jan.

From Mid Nov 2022 to Mid Feb 2023, CF’s share price rose c.45%.

By the end of FY24 or Jan 2025, I think we could be looking at more like £1.80 per share, and I’ve been conservative in my calculations.

Then there is the benefit to be received from the outcomes of the growth strategy, which I haven’t factored in, as I like a healthy margin of safety.

The recent rally demonstrates that the market is excited for what is to come, and FOMO will likely start setting in soon imo.

I’m more excited about the Jan update than I am about Christmas, and I love Christmas.

GLA

Https://www.pressreader.com/uk/the-sunday-telegraph/20231119/282175065852365

Quite a few newspapers have ran this story, but many of them behind paywalls. What’s everybody’s attitude towards this potential merger?

I’m not invested in either company atm, but I’ve held shares in both previously, and I always keep a close eye on REDD

I’m as frustrated as the rest of you, but I think the claims of PG and Lonny not having shareholder’s best interests in mind are wide of the mark… they are shareholders, and quite sizeable ones; especially the former

I’m hoping that somebody with a wealth of experience in this sort of situation can explain the reasons for this in greater detail

I see this as a cause for frustration, but not a cause for concern. What matters is shareholder returns, not transparency. Negotiation supersedes comms for me

Raggedtp,

I always avoid investment trusts, but it sounds like you’ve found some bargains. I’ll take a look. Thank you.

I was a shareholder until the offer came in. My valuation of SCS is (rounded down slightly to account for psychological resistance at round numbers) £3.50 per share. That said, this is based on several assumptions, and is a fair value figure which I would expect to achieve upon economic recovery. While I don’t have a crystal ball, I think we’re approximately 2 years away from that.

That’s 30% upside in 2 years; a satisfactory return for the buyers, however, when opportunity cost is taken into consideration (there is much more upside elsewhere imo) and the return is adjusted to account for risk, for me, selling my shares was an absolute no-brainer.

SCS is an exceptional company imo, but I think the offer was equally as exceptional.

Any suggestions on where to reinvest this cash? I’m far too concentrated to redistribute into my remaining holdings.

What’s more efficient, paying down debt amid rising or sustained higher interest rates, or paying dividends, which requires the company to pay dividend tax AND interest on borrowings? It’s this efficient and wise financial management that is causing the turnaround in CARD. It wasn’t so long ago that the company was paying a huge dividend, whilst being burdened with huge debts and the share price was nose-diving. You can’t have it all. If all you care about is a dividend, there are plenty of options out there for you. In 2020, when I started investing in CARD, it was 30p a share…. The share price is c.250% higher than that today, due to better financial management…. But yeah, I’m very disappointed because I haven’t been paid a dividend. I really don’t understand the logic (or lack thereof) at all. I also wouldn’t be paying a dividend. Get your calculator out and work out what this stock would/will be worth when debt free AND paying a dividend AND on a p/e of 12 (or more) AND inflation has subsided AND earnings have continued on their upward trajectory due to CF benefiting from investment strategy AND the economic outlook is more positive. That’s what I’m focusing on

I was expecting some estimates on volumes of gas for the sands we discovered in the MOU-3 and MOU-4 drills. Can’t say I’ve got much value from the CPR, due to my lack of understanding. Seems to me as though it’s primarily stating what volumes are required for CNG development, but with no real reference to the potential upside at Guercif?

Strictly,

I think with TW trading so closely to NAV per share, there’s some serious downside risk if the housing market takes a turn for the worst. Conversely, some alternatives are trading at a significant discount to NAV per share. I think those stocks are a much safer place for my money, personally.

In an economic climate like this, mitigating risk is always my priority. The dust seems to have settled recently, but I’m not counting my chickens just yet.