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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....
Paddy Boy,
I'm sorry but I also would like to let you know that, while negativity is welcome for a balanced view on shares on the discussion forums, your views are extremely negative and not realistic and only cause to scaremonger. I myself am a trained fund manager (member of the CISI) and can say that in the scenario let's say things only open in May the company will do a RI but not go bust. And the banks would be stupid to force this also. So mate tone down your negativity...In my opinion without an RI CF has 5-6x upside over next 18 months....with an RI ...still 2-3x upside....
What I really like about card factory is that their product is very low cost.....i.e. the last thing people stop spending money on in a recession.
Also the elasticity of demand is very flexible due to the low price....so they can easily lift prices 20% plus without affecting demand much!
They already did this by increasing 58p cards to 68p.....this will have zero negative impact from fall in demand.!
Mitdoow,
Which town do you live in to say the shops are all empty?
How long did you observe the shops for and on what days?
To analyse properly you need to check the volume of clients going in and out over several time periods i.e. during the day ahand at the weekend as well as in different towns and cities. Did you do this? Because they stated that Sept sales were only down 7% from previous year. So please back up your statements with stronger evidence instead of making unqualified blank statements on this panel.
unbelievably poor report!
With all their measures taken to improve profitability and not paying 6 months of rates and still land £12m loss...Shareholder value being destroyed year after year....Difficult if not impossible to see a 3,5 , 10 x bagger in this. Probability is much higher of a purchase by Boohoo etc for a nominal sum maybe 1m pounds. Share price growth HIGHLY UNLIKELY NOW....sold all my shares and am out!
Yes and the click and collect is a USP for the online card sales which online only providers dont have....the ability to give the card without any postage cost to the buyer....
Many many positives .......
Sumoverhistories
Good question when will volume and interest pick up? That is really difficult to say but I would say at the LATEST latest going into next 6 month report or final year results...could be well before if they give update to market that sales are back on track again....etc. Also vaccine effect - early next year ...most of these shares will get an immediate boost from this.
I think next year this time SP is already back at £1.50 at least.
PFEn,
I admit my analysis is based upon the assumption that they are telling the truth about everything. No new CEO as of yet does not help of course as well as of course the reasoning for the departure of the CEO after 4 years. Although tbh I prefer a mile more an unexplained CEO departure to a CFO departure. CEO's tend to get strategies wrong. CFO's can be cooking the books secretly and know stuff which may not be being declared.
BUt looking at this from on outside business perspective - you cannot compare Card factory with travel companies at all.
People still go on and buy cards for events, (as proven by only a -7% fall in comparative sales last 4 weeks) and the elasticity of demand for cards is very high. They have tested increasing cad prices from 69p to 79p which had no negative impact upon sales volumes. IMHO they could EASILY go to 89p per with little impact to sales. They are still by far the cheapest player on the market and have massive scope to increase sales/revenue by simply increasing the prices by 10-20p a card. Still way cheaper than clinton cards.
Online card purchases still miles way form really badly impacting this market .....online cards people cannot sign or then have costs of postage to send to themselves ...this alone adds on nearly £1 in costs.....
Once COVIF gone return to parties and and boost in sales of high margin balloons....
It is to be honest this reason that I see post covid the possibility of profits returning and going higher than previously.
Other facts- they are starting to negotiate rents as % of turnover as are most retail stores ..they have strong negotiating power AND the rent lease liabilities are only about weighted 2 years to maturity!
This is why their strategic aim of net profits of ca. £100m in 4 years are not at all a dream target! As we know net profits on £100m and the SP is likely to be at £1.6b market cap and 15 x the present price. Not impossible at all.
As for debt (well debt excluding IAS 17 leases) is just over £100m. Remember the leases have recently been classified as debt with offsetting right of use assets on the Balance sheet. This debt is hence IMHO well manageable.
Likelihood of stores being reshut completely- close to zero...if it does happen then only for 2 weeks or so.
Main risk of COVID transmission not is stores like this but where people spend long time i.e. airlines, restaurants, cafes and bars!
They remain the market leader in card sales in the UK....
Possible takeover target at this price level......most definitely.....maybe not another card player but other retailer maybe B&M etc ....with very high market caps now....
PFen why dont you back up your conviction with a bet?
I bet you that in 18 months the share price of Card Factory is in excess of £1.50, If not you win if yes I win.
I bet you £100. If you lose you pay me £300. If I lose I pay you £200.
Furthermore i bet you if the possibility of the SP hitting £3 in next 2 years. If it hits it you pay me £500. If it does not I pay you £200. Based upon your gloomy analysis this should I guess be attractive to you.
You definitely must be looking at the wrong stats.
Sales in last 4 weeks only 7% before previous year.
All stores now open. Small increase in card prices on way from 69p to 79p. Very high elasticity of demand for low priced goods. Average sales per visit up 25%. this can boost revenue easily to make up fall of 7% in sales. Online offering up in sales. 8 million pounds in exemption from business rates over next 6 months.
Once covid vaccine out and resumption of kids parties etc expect net profits to return to 50-60m range or higher. With lowered interest rates expect. 16x earnings =target market cap of 1b in 18minths to 2 years. Or a target SP of circa 3 pounds at least.