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Card Factory - Recovering card retailer on low PE

June 2022

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • CARD
  • Price:
  • 65p
Lockdown has driven the proverbial cart-and-horses through the business models and Card Factory has seen its shares fall from a high of almost 400p in 2015 to 65p now. Investors were worried that its high debts would engulf it but last year the company cut net debt from £107.7m to £74.2m (net debt / EBITDA just 0.8x) and its banks, which had previously demanded a hefty placing as the price to refinance its debt have just completed a new deal, with a revised facility of £150m. Their confidence has been boosted by better than expected full year results for the year ended January ‘22 with Card Factory posting revenues up 28% to £364m, while pretax profit was £11.1m. In spite of the continued tough consumer backdrop its prospects are now str ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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