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Hi Rox. Yes it is impressive. I haven't looked into the numbers to understand exactly where the cash has come from, and am not convinced it has all come from net profit. However, the issue is this. I cannot see anything to be positive about for the future. The only news coming from management will be negative. The simple reality is that profits are going to continue to go down. There are just too many negative influences, both self inflicted, and external, for the results to be anything else. Even if ebitda of £20-£30m is achieved, is a market cap of £200m justified? I can't see that the management are doing anything other than making the same old mistakes, and going on about a growth story to £600m is simply ridiculous. The recent strategy update was a lesson in how to fool shareholders. They will spend money like it is going out of fashion, and then get out before the * hits the fan.
The only announcement Darcy is likely to make is another big fat profit warning. Nobody should assume this share will recover or that it is a value buying opportunity. They have already admitted £30m cost increase. Most likely will find another £10m or so. Coupled with lower sales, that knocks £50m off any previously expected profit. Onwards and downwards...
Best wait for 20-30p. Sometimes things happen quicker than you expect.
If you go over my posts you will find that despite me taking a beating on this board, they are almost the only ones that are correct. The truth is no one knows what the share price will be, however, what I predicted is (and now confirmed by the RNS) is that EBITDA will fall to £40m max (ignoring the covid affected period). That £40m could well be £30m. It is highly unlikely that will rise over the foreseeable future (say 5 years).
Therefore, estimate the share price based on a declining £30m ebitda, say dropping to £15 over the next 5 years.
Hi Beachbum and Roxbury.
The reports don't really determine anything, other than cheap card shops are busy in December.
If I ignore those, there is nothing that tells me CF have had a good Christmas. There are just too many issues that are both outside influences and self inflicted.
The problem is, 5% up and everything booming, 5% down and the board gets fired. It is almost impossible to view that 10% difference by a few store visits.
I doubt that Lombard would bet on lockdowns happening or not.
My experience tells me that a serious drop in l4l sales is going to be reported, possibly approaching 10%.
Obviously they will massage the dates and include whatever they can to put the best light on them, but very hard to disguise from anyone that knows what to look for.
Hold tight for results day...
Has anyone considered that Lombard may be the clever ones?
If the results update is poor it is perfectly feasible that the shares crash back to 30p.
Difficult period...selling leftover stocks...started well...low stocks when required...freight issues...no high ticket lines...macro blah blah...
I could perhaps write the report for them?
The fact is, they have never successfully increased prices. They have had a number of modest increases, however, if they had been successful there would have been l4l sales increases from them. In the absence of any, then it is a simple fact that they have not been successful. If they cannot sort the pricing issue out and get regular l4l sales increases then they are doomed. If after 20 years of testing slightly higher prices, they still can't get away with them, then I don't hold much hope for the latest management guru to solve the issue.
Hi mdunsire. CF have tried price increases hundreds of times and came to the same conclusion each time. Other than very minor ones on odd lines, they have been a disaster. That is why the business is where it is. Years of falling sales and profits (l4l). The employment of very young people is not the solution to save other than a tiny amount of cash. Management costs simply rise and the store standard decline. You can set what share price targets you want - nothing changes the fundamental's. The truth is the share price could easily reach £1 in the short term (hope it does), but 20p is still the 3-4 year reality.
Hi CVB123. Sorry if my post wasn't clear. The 50% fall is referring to profitability. Profit b4 tax may change from £65m (FY20) to £30m (FY 23). Ignoring FY 21 and FY22 due to Covid affects. I see no sales increase, and combined with lower margins and higher costs, that's the result. I give no credit to the management and their strategic plan either!
It should not be assumed that either company will return imminently to pre-covid levels of profitability. There is no chance. The best CF are likely to achieve if perhaps 50% of what it was, due to falling sales, higher staff costs, lower margins, spend on the 'plan' etc. There could well be a share price increase in the short term if the market gets excited about the lower level of debt, however, this could easily be over ridden by the long term poor prospects. By 2025 20p is far more realistic than £2.
It's the different views that make share gambling such fun..
I base my view on facts and experience. The last thing this share is, is exciting.
I would think twice about lending the board a kebab van, never mind a business they have no clue about.
The one thing people like Darcy are good at is b...
The ERP has disaster written all over it - apart from 'what is the point?'.
The 'partnerships' are just glorified wholesaling, even Aldi are also using a specialist to supply them, rather than a competitor.
International? who isn't...
Extended franchise...what?
The board will soon be long gone.
I see you confirmed the oldest trick in the book - lets ask every customer if they want stamps - get the sales figures, worry about the zero margin later. They need to do what the supermarkets do with petrol - exclude stamp sales from their figures.
Hopefully the large shareholders will demand this.
I could go on.
Deja vu? ref Clintons Cards 'It said margins had been significantly weaker as a result of clearing old stock in the January sales and increased sales of lower margin gifts. It is undertaking a strategic review under its new chief executive. "The outlook for the second half of the current year is below our previous expectations but the changes we are undertaking to the business will deliver significant benefits in future years," said Darcy Willson-Rymer'
That ended well...