Member Info for Zanab

Granted, the hybrid has probably saved the bacon, so to speak, for now. Debt markets are likely demanding double-digit yields at least, hence why they've taken the hit.

You wouldn't want to thank past management for much, but you would for that.

In theory, but the parameters are such that you'd end up paying 10% a year for this at least. 5-year gilt rate will likely not go below 2.5%-3% in the next decade until govs themselves deleverage. The ratchet up is small but can't be ignored.

That 'operating cost', which it isn't imo as a company less speculatively capitalised in the industry doesn't have it or anything like it, is increasing. But I understand your rationale for treating it as such here, or sympathise with it. The coupon is now high, and it can't tap debt markets for anything better yet or it would have.

I remember the hybrid was not well understood last time I lurked here, fwiw.

Yes, as I say, it is a speculation. One bump in the road, and it could all go awry and you'll end up with heavy dilution. If all goes to plan, you'll end up with a speculator's results on a good day. If your operating performance wobbles and you can't raise debt, shareholders will be diluted, simple as. There's a good chance that the hybrid gets converted to relieve stress. To be honest, it's not what people want to hear, but it's what could be done now to clean things up.

Also, remember that once the instrument is included in debt ratios, debt funding becomes even harder and covenants become more likely to get stressed.

I'd only feel comfortable buying this if I can find 5-10 other companies to diversify among with similar debt levels. I hope it works for you, I do. I would just allocate wisely, as John has mentioned.

If this works for you, it works for you, but it is clearly a speculation.

It is my shallow understanding that the hybrid payments now double, and it it is still engineered out of leverage ratios for the time being, not forever.

It all feels a bit like walking across a dodgy bridge so not for me.

US consumer debt is at record levels btw.

Maybe, or maybe they'll be able to give themselves a bit more breathing space instead of relying on debt: https://www.newyorkfed.org/microeconomics/hhdc

Sorry, bond yields up.

Yeah, of course they will challenge it.

Governments, including the US, have pseudo-defaulted on their debts before.

Why would not repaying an operating tax necessarily mean you would be short of sovereign debt buyers? You could even argue more would rush to them as a safe haven in certain circumstances. If the government says it's going to borrow more and stoke inflation because of a shortfall from tariff revenue that has already been budgeted, that would push bond prices up.

I am very sceptical that a tariff rebate will be had within the next 24 months. It's going to get dragged out. Plus, they will probably find some justification for some countries tariffs that will stymie the progress: namely China and the countries used to circumvent tarrifs on goods from China.

There is no sympathy for goods from some countries and the company's that sells them across the political divide. If this goes on for two-plus years then it becomes the next governments problem, and they won't want to pay it back either. The government will find a way around paying it back imo. The lawyers are kicking their lips and will get paid regardless though

Examples of us dogs over the last 5 years:

Oatly

Beyond Meat

Peloton

Target

Lululemon

Quantumscape

Nikola (lost everything?)

Intel

Kohl's

Zoom

... many more

Unfortunately, my friend, things are never that simple forever.

Quick maths, so likely not 100% accurate but close enough to show the major index of each country are about level with each other in performance over the last 5 years.

That's astonishing considering how overvalued the US shares are. It's a localised bubble. Let's see when it will burst. Tomorrow, years?

Dwam, the s&p is up around 76% in the last 5 years, and the FTSE 100 around 61%. If you include the higher yield of the later and the lower of the former reinvested, the s&p is up around 82% and the FTSE 100 around 80%.

You mentioned the s&p 500, so the 100 seems a good comparison. Not much in it.

It's a good time, I guess, but it's been on sale a while.

We're in the same boat. Welcome aboard.

Fair enough.

It's just a shame that it didn't move sideways from the low £3-range as I would have liked a small top-up post the update.

I guess I shouldn't moan. It's done well for me in such a short space of time.

Okay, fine. The results came in as guided, and the cash position was healthy as any basic analysis of the financials, public information and working capital cycle would have shown.

So, the question is why did the price move up with no new information? Everything has come in as expected.

I am guessing you've been here a while and so are a bit sensitive. No offence intended.

Came in exactly like I said.

Also, CF has a fourth shop a couple of miles away near me next to Asda. Asda still sells cards though.

Cards Direct are in the same band as cardzonein terms of operators. They offer nothing at prices that are no lower than card that card doesn't offer.

They may be splitting revenue in high footfall areas, but I would guess they are the only areas in which they are opening close to CF. In my high-street, there are two card factory shops and one cards direct. That's been the way for years. Up until last, there was also a Clinton's.

The only growth happening under the current bunch is in the wallets of those they buy businesses off.

Also, if no business should pay the minimum wage, then we end up in a cycle of infinitely exponential increases. That is a wage spiral that leads to persistent high inflation.

Last time I checked, card's wage bill was over 3 times it's net profit.

The fact is that it's not these businesses on typically modest margins that are responsible for exorbitant energy and rent costs, and yet the tired argument that they are bad business models always comes up if they can't handle double-digit annual costs to employing someone. I'm sorry, but it's lazy and somewhat emotional

Sure, look at supermarkets. Their wage bills are huge, and their profit margins around 5%. Just to make that margin and give a significant pay increase means everyone else has to pay higher grocery costs, which is exactly what happens! And then it just becomes a cycle that feeds off itself. Let's face it. The government raised taxes in stupid places because they all want favours from tech and finance. Otherwise, they would have gone there. We just got a bunch naive teenagers group thinking.