Member Info for RoxburyHouse

yes accipiter and if there is a cash call then I will be the first to take it up because i am confident that it will be used to inject £ into the business NOT pay off Covid debt because that will be already sorted with the cash generated from profits.

and another way of looking at it is that Card have 7 full months (May to Nov) to build up cash (profits) that can be used to subsidise the loan payments starting on November 30th 2021.
Even if this is half what it was before Covid then that is £25 million.

Talk of a RI is ridiculous.

That will never happen. IMHO.

If you can’t follow the above then a more simplistic way of looking at it is that we “only” have to generate £70M cash in 15 months of trading when previously we generated £110M.

Ok I haven’t proof read this and I know the columns will not line up on this first attempt but I would like your thoughts on this please because if what I am about to post below is correct then CARD is a strong Buy IMHO and we have found a real gem here.

Thoughts please..

Column A
Accumulated average monthly cash not deducting any loan.

Column B
Available accumulated monthly cash deducting loan payment (when due) of £7.77M PLUS the monthly profit of £7.3M.

2021. A. B. C.
May. £7.3M. £7.3M
Jun. £14.6M. £14.6M
Jul. £21.9M. £21.9M
Aug. £29.2M. £29.2M
Sep. £36.5M. £36.5M
Oct. £43.8M. £43.7M
Nov. £51.1M. £43.3M
Dec. £58.4M. £42.9M

2022
Jan. £65.6M. £42.4M
Feb. £73M. £41.9M
Mar. £80.3M. £41.5M
Apr. £87.6M. £40.9M
May. £94.8M. £40.5M
Jun. £102.2M. £40.0M
Jul. £109.5M. £39.5M
Aug. n/a. £

Facts.
1 Total loan of £70M to be paid back in instalments by 31st July 2022.
2 First payment due 30th November 2021.
3 Final payment due 31st July 2022.
4 ALL shops fully open on 1st May 2021.

Assumptions
1 The £70M debt is paid in 9 equal payments. (£7.7M)
2 For simplicity divide the preCovid annual average Profit into 12 equal figures. (£7.3M)
3 As a starting point and for simplicity let’s assume the average profits are the same as they were preCovid (£88M).

Conclusion.
Based on the albeit unrealistic assumption that CARD will create the same monthly average profit immediately all the shops reopened in May there will be a surplus of almost £40M cash at the end of July 2022 when the £70M loan has been fully repaid.
A more realistic model would be to ramp the profits up from May and be lower but my point is we have £40M to play with here and if we took that off the left hand column above (ie accumulated cash) then we would have the following:-

109.5 - 40 = 69.5

and then divide this by the 15 months that the shops will be open before that last loan payment is made = £4.6M which is 67% of the preCovid average monthly cash.

This tells me that the takings can be down by 37% each month for the full 15 month duration and we would still break even and pay off the loan.

Hi usernames yes I’m ******* deep in here mate and every +/- 1p is +/- just under 7grand to me wtf!
The wife came downstairs the other day and asked me where the kitchen sink was ha ha

Hi ForeverNever I would be surprised if the internet sales even covers the costs of running that side of the business atm. Let’s be honest the App is crap! They never update it or make it more user friendly. I just don’t think they have the capability atm to take on a massive upsurge of demand in that area but it’s coming.
I forget the wording but in a recent RNS they stated that because footfall is down they have focussed their attention on getting Customer to buy more whilst in the shop. You only have to park your bum on a chair for 20minutes outside any Card shop to see that this is working.

The other day I saw a lady come out of there with 1 kid holding onto a balloon on a stick another opening some boxed teddy cuddly toy and she had a big balloon in one hand and one of those big bags full of stuff.
I’m only guessing here but I reckon she only went in there for a Card ha ha

Hi usernames.
I agree it is open to interpretation and bearing in mind that the Card Factory (when the shops are open) has paid an average £80million in dividends every year back to the shareholders for several years now then my interpretation was that there was never going to be a RI.
It’s obvious that they are attempting to pay this back through sales.
I think they will do it providing there are no further lockdowns.
That’s the only gamble here as I see it. IMHO

Hi usernames.
I agree it is open to interpretation and bearing in mind that the Card Factory (when the shops are open) has paid an average of £80million in dividends back to the shareholders for several years now then my interpretation was that there was never going to be a RI.
It’s obvious that they are attempting to pay this back through sales.
I think they will do it providing their are no further lockdowns.
That’s the only gamble here as I see it.

Oh and another date to put in your diary is November 30th because not only is it my birthday but also it is when the first loan payment is due.
January’s results will highlight that at least 2 (possibly 3) of these loan payments have been made.

I have been looking at the previous results:-

If the Interim results in Sept 2020 is anything to go by then the upcoming results at the end of this month will be for upto and including 31st July which because of lockdown will only be 3 full months of trading ie May June and July.

These will give a good indication whether Card is on the right trajectory to pay off this infamous Covid debt.

Providing there are no more lockdowns then the Trading Statement in January 2022 will be the one to watch because that will include the results for the upcoming Xmas period and by then we will have had 8 to 9 months of trading.

What happens in between these periods nobody knows but games will be played for sure.

The bulk of my shares are long and strong up until “July 2022”.

So funny :- supply chain was one of my concerns and when I noticed the other day that the “balloons on a stick”big box they have at the entrance had been threadbare in one of the Card shops but over filling in another it took all my strength to not go in the shop and say something! I wanted to put them all in my van and take them to the other shop. Ha ha.
On a good note though the box was full again the next time I went and the teddy bear toy shelves which were looking a bit empty were all full again.
Need a holiday..

Them two 10 grand buys yesterday (1st Sept) are mine.
Sold out because I believe (correctly or incorrectly) that CARD will rise by more £ BUT that sentence in the last RNS keeps haunting me and I’m FOMO.

Here it is again..

"The net result is that we have ended the year in a strong financial position, with no bank borrowings and are much more effective operationally than we were before the pandemic. We are now even better prepared to execute our refocused strategy and are confident in the future prospects of the business."

I mean how many shops after being closed down through Covid for the best part of their year have emerged without debt and in a stronger position?

Also whenever I walk past the WRKS on my CARD shop surveillance the WRKS (along with CARD) are also really really busy.

All IMO only of course but I like to declare my position.

Good luck everybody.

I have no idea how busy Balloon Factory sorry Card Factory was before Covid but it couldn’t possibly have been busier than what it is now could it? Since invested I frequently visit the 4 Card shops in my area at different times of the day and there is always people in there. 9 times out of 10 there is a queue and I don’t think in the short time I’m there I have ever not seen someone leaving with a massive balloon in one hand and a big bag of ‘stuff’ in the other.
Before the Pandemic this share price was £1.80+ and once we clear this outstanding debt (which I am confident we will with the sales) then I just can’t see a reason why it won’t go back to that.
Patience is all that is needed here.

Could be wrong Ian but I think (although unlikely) it’s coincidence. The RNS says they increased their holding on Tuesday and only by 0.1% and I make that about 40,000 shares? Maybe I have got my numbers mixed up?
My gut feeling is that somebody else is building up a stake.

They are not taking over anything IMO, they have simply spotted an opportunity just like the rest to make £.

Research Research Research.
RNS.
Artemis Investment Management have increased their stake in the Card Factory again.

Here is a recent write up from Motley Fool.

https://www.thisismoney.co.uk/money/investing/article-9632585/amp/ARTEMIS-INCOME-Elite-fund-aims-10-dividend-rise.html

Quote.
“Over the past year, the fund has generated an overall return for investors of 28 per cent. The fund is invested in 50 stocks, most of which are listed in the UK.
The key to investment success, says Shenton, is identifying companies capable of delivering sufficient cash to both pay shareholders a dividend and meet interest on any outstanding debt.”

An older article but well worth a read and still relevant and mentions them.

https://masterinvestor.co.uk/equities/card-factory-a-tuckaway-recovery-play/amp/

15k buys have started again - somebody wants in.
Note They are down as sells on lse but at 64.3 at that time they are definitely buys.

Like I say I don’t know if it was true but it fits in with Pandafunds observation On level 2 that there was 100k refilling on the bid at 64p and his Iceberg theory.
Once filled whoever it is will own 3% of the Company just below the need to declare.
All very interesting and good for us little guys.

Not sure how much truth there is in this but someone over on ADVFN reckons they saw a buy order for 10 million shares for 64p on open this morning?
Apparently it was only there for a couple of minutes.
Could be made up, I have got no idea but thought I would share this with you because nobody has mentioned it over here. If it is true and there is somebody out there who wants to buy this many shares then we will no doubt find out in the morning as they try again? Even now at 66p this share is cheap IMO.

Yes and it must be remembered that with the exception of the shops in the Republic of Ireland which opened mid May the all shops opened mid to end of April so have already been open for almost 4 months. In fact by the time the final payment is due on 30th July 2022 they will have all been open for 15 months.
This rise IMO is because people are finally waking up to the fact that the knee jerk reaction of selling because of a possible RI (which again IMO) is just not going to happen. The likelihood is that Card will pay off this debt much earlier than July 2022 AND reinstate the dividend and if that happens then this share price will fly.

Hi PI yes. Didn’t want to tbh and got a terrible price for my last lot (0.588) but have been selling and switching to Card the last couple of weeks. I like The Works but just like Saga I got bored. Can’t do balanced portfolios I have tried but I love being all or nothing into a share it’s so much more exciting especially when I think it’s got potential to multi bag. Good luck with Shoezone matey.