The next focusIR Investor Webinar takes places on 14th May with guest speakers from WS Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
Nothing more to add.
I agree. Great value on offer at these levels. One to hold for the long term - will gain market share given cash strength in present & upcoming harder times. Buybacks & dividend a bonus too.
Bodes well for all of us.
Gl all.
The problem is the market is becoming that irrational, you now think 20% is not an attractive gain...
Ramsdens offers plenty of long term potential to return and improve on existing normal trading earnings. The net cash position is healthy, leaving the actual business on sale for a good price which I see a 50% upside within 3 years on return to healthy profits.
RFX is a good company, backed by a good management team - and one which offers a hedge against inflation & has good exposure to gold prices. If you are prepared to be patient to return to normal trading, there is good money to be made here with a good margin of safety.
Substantially added to my position today. Had to buy 3 times due to limited volume.
Fair news, happy with increase net cash position . Forward earnings should return to previous norms, resulting in gradual uplift of SP as time goes on. A good solid company, with a good management that is currently priced well.
Buy
I've been inactive messaging on the board recently but still a holder of CARD, and have read all your comments, which I have enjoyed.
I have sliced a very minor portion off the top today but still hold over 90% of what I initially did with no intention of selling.
Holding for the long term - CARD will return to consistently good earnings & will see an even healthier correction of price to real business value.
No brainer really after thorough analysis....
GL ALL
Doing my bit for the company by purchasing a couple of cars on the app. Very impressed with how easy it was & how it looks.
This is something that has been needed at the company for a very long time - do not underestimate CARD in the long term...
I'm in this for the long term & really not too bothered if I'm slightly down (average 41p) in the short term.
If a placing happens it happens - I'll pick up even more shares & ride it out long term as when/if the company arranges it finances & opens stores, it offers a very promising turnaround.
Can't knock the past returns & the previous cash flow we know CARD can generate in normal times but I'm waiting for an update on the covenant breach (currently quite heavily weighted to CARD).
I will add more on dips though and the short term doesn't really concern me as I'll be holding this cash generative company company for a long time - there are not many businesses where you can raise the prices as discrete & call me old fashioned but I think I'll still be buying cards for loved ones etc for a while yet!
Hi Paddy,
I read the breach of covenant bit & thought the same - however I think it's possible to renegotiate terms with the right team given the current circumstances - so I think the potential upside coming from the trading statement as a whole is worth more than the downside.
Good luck in whatever you decide to do.
Hi Castle,
I have to agree with Carllapos. I would only be saying the same; there also is the remainder of the RCF to draw down & also the covid loan facilities. From this & points stated by Carllapos I cannot see it happening.
If you are unsure - perhaps wait till the trading update on the 14th (Thursday) before you commit. I will be looking carefully in an attempt to buy more if satisfactory.
In my opinion - after scrutinising reports & financials of Card Factory recently, I have decided to buy.
Whilst there is a significant short term risk re coronavirus etc - you have to remember there is a solid business behind this that used to consistently return good money to common shareholders - (perhaps too much of a dividend return, which has got it into this trouble - but this can be solved post covid by a lower reintroduced divi long term).
Admittedly, the balance sheet position / tangible book value is not the best - usually this would shut off any investment making decision for myself - However, I feel I can look past this when the business pre covid was returning a 5 year average ROCE of approx 18.42%. (From 2019 report prior). On an earnings basis - 5 year pre covid EPS was approx 16.38. Therefore @ a share price of 42p it is trading on 2.56 times pre covid average 5 yr earnings. In my opinion there is a huge discrepancy between the real business value & the quoted price.
Whilst stating the obvious; the share price is depressed due to a concerning number of people thinking this company will go out of business or call for a placing. With the financing arrangements of a £200M RCF & also CCFF funding from the govt - I personally believe this company will survive the current crisis & current shareholders will not have their positions diluted.
Yes it's more of a Covid recovery play (like most around March) but this business has taken vital steps to overhaul its current operations (improve it's online business & company image), which appear to be working. I used to think about investing a year ago but was put off by the ancient website & quite pettily, the old logo!
A new CEO with potentially fresh ideas of cutting costs (Costcutter) to lean up the operations will surely boost chances of survival too.
Entering a post covid world - I am of the belief that people will keep buying cards. Even if the industry is very marginally reducing year on year, by being the market leader of low cost cards Card Factory can attempt to capitalise on this. Once everything is re-opened this company will carry on selling cards how it used to. Even if it is less than normal, the company should still be worth more than it is valued today. I would prefer any reintroduced future dividends mid term to be reduced in order to shore up the balance sheet more, to avoid problems again.
I think 18-24 months from now & there will be a lot of people wishing they bought into this well run business & not be put off by thinking it is the end of retail! This is a highly cash generative business - look at the past 5 years of cash flow statements & it used to frequently return £40m + to shareholders & market currently values it at £140M !!
When retail is done right it works & this company will return good money to holders in the mid-long term post covid. Buy.
Good luck all.