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Its a great opportunity for the new CEO to run through ROCE for each store, close down the stores that do not meet the hurdle. Reinvest some capital (whatever is left from the debt repayment) to bolster the customer interface on the app and plough money into advertising for online. A gold brick set of stores coupled with online penetration and cost leadership could seriously scoop market share from Moonpig. It is an exciting time for this business. In march they will be prepping the stores nicely
Paddy thank you for letting us know what the share price will be the following day. We all really appreciate it.
Ever asked yourself whether everyone calling you a sad little unloved man are all just bitter and angry about this stock and that we are all just being necessarily mean to you ? Even though you are behind a computer screen, it doesnt mean that you are not a dishonorable and unsavory human person. I would advise you not to simply reply with "you do not like counter arguments". You keep replying with that automatically. Just look in the mirror and ask yourself whether everyone is wrong about you or whether you could improve your moral compass. Everyone has one. I would advise you to start posting more detailed challenges to the companies prospects if you are bearish. If your intention is to scare less sophisticated people by selling them the notion that you can predict day to day share price movements, even when you know perfectly well you are unable to do that, your behavior is immoral isnt it?! Dont respond, just take it on board man. I am trying to help you as a person. We can all improve behaviour and i want you to do the same.
Fundamentals, i would advise you to not think about getting in and getting out. One can not predict day to day or week to week share price movements. It is impossible. Rather if we take a view on the instrinsic value of the company, it has the potential to earn £50m in free cash flow 12 months from April 12th. Based on interest rates, if we value those cash flows at 10x that is an enterprise value of £500m. Assuming we have £100-150m of debt, of which if we pay down £40m in 12 months so lets call it £100m.....thats an equity value of £400m in 2022. The current mcap is c. £150m. That is a huge margin of safety that one requires if there is any negative dilution or more onerous refinancing terms.
On that basis, this is one of the best value stocks i have seen in a long time.
Cardinvestor......you say you follow this company in intricate detail yet you say the ex CEO owned alot of shares. No she didnt unless you class "alot of shares" as a less than one years salary. Show me the source information from the company that she ate her on cooking. She did not deliver. She spent s/h money on new openings instead of not levering and being prudent. she was low quality. as for the chairman, i probably agree....they have been slow to react but equally......and can we sing in synch.......the damn country has been closed....what did you want him to do?
this looks like a refinancing because the rns said refinancing and not an equity raise. Set it and forget it and dont trade it. Just look at the price of this in 18 months time and you will be pleasantly surprised.
There are plenty retailers that look statistically cheap. What attracted me to CARD at such low levels is a history of treating the shareholder as an owner and partner through capital allocation. Yes they did not forsee a pandemic and maybe pushed the special dividend out too heavy. But show me any other UK retailer that is as cash generative and that pro-shareholder with its capital allocation? Next possibly. It helps having experienced capital allocators owning 20% of this company. They are very much counsel to management imo. This was a cigar butt but now looks like there are puffs to many years to come. I want them to aggressively push online. They need to do this. I would sooner they reinvest millions into the online customer facing part.
why have the CEO and CFO dumped a huge amount of their shares in the last couple of months? I do not mind a bit of insider selling but that is a major concern for me
Yes lets stay humble. All in good jest. I agree about risk of equity raise. But, i am a long term holder and the Card is not a great business but its a good business. Even with some new money put in, it is likely to have a positive impact on business value, due to a strengthened balance sheet, and therefore the share price over time. day to day movements are of no interest. its still way too cheap
i have just heard a splash. A man was scrambling in his life-raft in an attempt to on-board a departing cruise liner
Unfortunately the ship had already set sail and the man fell between the cracks into the abyss
Spectators sat in the luxury suite watched in horror from the Long-term-holders suite, the ship's luxury cabin
The man was heard shouting "boris" and "insolvency" and "vaccine rollout" as he plunged into the ocean.
Today, a man was seen paddling frantically trying to scramble and on-board a giant cruise-liner
The ship unfortunately left the harbor as the man slid between his life raft and the deck into the abyss
Spectators in the first class suite (called the long term holders lounged) heard cries from the man shouting "boris" and "vaccine rollout" and "insolvency"
He was later found like a drowned rat and driven back to his youth hostel
The man's name was Paddyboy
the market has no insights here. CARD may have agreed with lenders that if Boris confirms shops are to open by April, the waivers will be extended to June/July. There could be a small RI but i would not underestimate Teleios Capital Partners being in there at 20% and being a pushover. There will not be a capitulation here as many solid retailers are in the same place. The banks have nothing to gain making the situation more difficult when they know the catalyst of deleveraging is the reopening of the company.
Will be interested in the pricing of the new RCF and comparison of new interest charges versus what the sum would have been. if GE wasnt in the frame. If lower on a % basis that is pure advantage given to the equity holder. Has pricing on the debt package leaked today?! Who knows.
The Buff-dog himself has loaded into Chevron. That is confirmation bias for many of us but why shouldnt it be with his track record. He rarely takes equity takes in purely commodity businesses. He sees inevitable consolidation in the oil patch and permanent reduction in new supply. Prices are going up over the next few years!!!! Most of us on this board held on when we marked down -80% in March 2020. It was very easy to glide this. I can honestly see this lifting off in 2022.
rhum3 and Columbus will not put a significant dent in the cash balance, particularly next year as more FCF comes in. Cash building is a non-answer. £1 retained in the business and not deployed within a sensible period of time or properly is less than < £1 of market cap discounted to presented values. Chinch, are you implying £60m is chump change? It is 20-25% of the the market capitalisation of the company lol. Its a fairly big deal. It will be more than that at the end of the year. They have options to buy something substantial.
I guess if people want to keep telling themselves the bots are playing with the share price then be my guest. Its called reinforcement bias. The current level of 2P is fairly valued. For a terminal value we need to be a business, not a single asset. I still think this can happen but I am also a realist. The market appraisal of this company is fair imo.
I personally would avoid looking at the share price too much. I have noticed a few reoccurring calls on here saying the share price is being manipulated. I honestly dont think so and we should not care. When you look at business value like a analyst or businessman would.....the company is overcapitalised and fields are declining. The market works through this efficiently 9.9 times out of 10. The cash on the balance sheet is priced in. Management now need a target to generate earnings to justify more business value / intrinsic value which will then lift the mcap. Sorry but i dont want to engage in recinforement bias. This will not move unless we have clarity over what they plan on doing with the cash.
Re ENQ deal, I agree its not great but I do think it helps them in terms of producing their way out of debt. Its a start. Its not a knockout deal but there is some rational.
Serica have sat on shareholder cash now for years. They have voiced their commitment to paying reasonable prices but that is like a fund manager saying in 2012 that he is going to wait for the 2008 in 2050 when he can purchase businesses for less than they are worth. That is not how it works Mitch. Part of capital allocation is originating and finding ideas that work. If they are waiting for 50 cents on the pound then i am afraid a lot of buses may go by.
I have emailed management numerous times. I expect and demand their disclosure on capital allocation is more detailed. If they do not close on a deal this year, then cash is becoming an increasing part of enterprise value and therefore value will shift to management's ability to deploy it......at the moment this is glacial. There is a fine line on discipline and just not finding enough opportunities or ideas. For those who have held a commodity business that has an 'ok' competitive advantage but not great - well done.