Agree - sometimes the market surprises you to the upside too tho, I suspect a rally here will come out of the blue. With their huge cashflow they could likely be taken over out of cash generation so perhaps Teleios stake could move sooner than expected. I'll be long when the shares move up, not sure those that sell out will get the chance to get back in at a decent price if the stock clears or Teleios stop selling - they don't necessarily need or want to sell the lot.
Yes, perhaps the need to drive online higher isn't getting the full attention it really needs until they have the full ERP software upgreaes in and flowing. Also, if retail is growing so strongly they may prefer to target resources there. Online is tiny and an 18% drop on timy is very tiny.
Perhaps some were hoping for divi news here, others may think no divi till 2025 is no divi for 18 months but it's actually Feb next year, CARD's 2025 financial year. Telios selling, too many traders not knowing the detail, some traders would have been selling no matter what the results. Let's see what happens when a few brokers and tipsters get the word out there.
This is how I think of CARD. Collect dividend while you wait for valuation to reach precovid levels. Valuation around PE ~11-14x or div yield of ~2.7-4.8% (2017-2019).
Which is around a 100% increase from the current PE of ~6x and a theoretical div yield of ~5.5-8%.
This is how I came up with my dividend numbers.
They stated in their 2023 annual report, "the Board envisages recommencing dividend payments at a level of 2-3x dividend cover based on profit after tax, subject to a Leverage ratio assessed across the financial year of not more than 1.5x (excluding lease liabilities) being maintained after the distribution is made."
Net Income LTM ~ $66 million
$411 million market cap
3x-2x Dividend Cover = ~ $22 million dividend - $33 million dividend, 22/411 - 33/411 5.4% - 8% div yield.
This to me is also conservative as I expect FY24 net income to be higher than LTM.
I posted this on Iggys substack as well but would love to get your opinion as well.
Yes, the divi was something which attracted me too. My slight concern is that the broker forecasts all had divis penciled in for this year and next year but over the past few months they have been erased. Watching the results presentations, the CEO and the CFO were always very coy about talking about the divi which seemed strange. The divi forecasts were before the living wage was raised.
There was no one thing which made me sell, it was the sum of lots of little things like this and the rise in the living wage and Teleios constantly selling etc. I hope I'm wrong for everyone - I've moved on and found other good places for my money and I don't beat myself up for selling something that then comes good. I can always buy some back if my fears are unfounded. I don't have much in the way of 'real fears' for CARD, it's just a couple of years down the line from buying, there are lots of other opportunities showing up that were not about a year or two ago or that I hadn't found.
What a frustrating day, unless you're buying that is. Anyway, you've lifted my mood a bit as I've not yet been able to watch the results presentation. Do you think there is poor sentiment around the fall off in online sales? That would be nonsense in my view as online accounts for such a small proportion of the total business and this is primarily a bricks and mortar product offer. Online is now becoming an even bigger growth opportunity for 2024 and beyond, if CARD believe they can make online pay (click and collect benefits aside). Thanks for the commentary, TEIN.
Agree - sometimes the market surprises you to the upside too tho, I suspect a rally here will come out of the blue. With their huge cashflow they could likely be taken over out of cash generation so perhaps Teleios stake could move sooner than expected. I'll be long when the shares move up, not sure those that sell out will get the chance to get back in at a decent price if the stock clears or Teleios stop selling - they don't necessarily need or want to sell the lot.
Yes, perhaps the need to drive online higher isn't getting the full attention it really needs until they have the full ERP software upgreaes in and flowing. Also, if retail is growing so strongly they may prefer to target resources there. Online is tiny and an 18% drop on timy is very tiny.
Perhaps some were hoping for divi news here, others may think no divi till 2025 is no divi for 18 months but it's actually Feb next year, CARD's 2025 financial year. Telios selling, too many traders not knowing the detail, some traders would have been selling no matter what the results. Let's see what happens when a few brokers and tipsters get the word out there.
This is how I think of CARD. Collect dividend while you wait for valuation to reach precovid levels. Valuation around PE ~11-14x or div yield of ~2.7-4.8% (2017-2019).
Which is around a 100% increase from the current PE of ~6x and a theoretical div yield of ~5.5-8%.
This is how I came up with my dividend numbers.
They stated in their 2023 annual report, "the Board envisages recommencing dividend payments at a level of 2-3x dividend cover based on profit after tax, subject to a Leverage ratio assessed across the financial year of not more than 1.5x (excluding lease liabilities) being maintained after the distribution is made."
Net Income LTM ~ $66 million
$411 million market cap
3x-2x Dividend Cover = ~ $22 million dividend - $33 million dividend, 22/411 - 33/411 5.4% - 8% div yield.
This to me is also conservative as I expect FY24 net income to be higher than LTM.
I posted this on Iggys substack as well but would love to get your opinion as well.
Yes, the divi was something which attracted me too. My slight concern is that the broker forecasts all had divis penciled in for this year and next year but over the past few months they have been erased. Watching the results presentations, the CEO and the CFO were always very coy about talking about the divi which seemed strange. The divi forecasts were before the living wage was raised.
There was no one thing which made me sell, it was the sum of lots of little things like this and the rise in the living wage and Teleios constantly selling etc. I hope I'm wrong for everyone - I've moved on and found other good places for my money and I don't beat myself up for selling something that then comes good. I can always buy some back if my fears are unfounded. I don't have much in the way of 'real fears' for CARD, it's just a couple of years down the line from buying, there are lots of other opportunities showing up that were not about a year or two ago or that I hadn't found.
Best wishes
Brilliant summary, and yes it beggars belief this share has dipped by 15% on such positive news…bloody ridiculous!
What a frustrating day, unless you're buying that is. Anyway, you've lifted my mood a bit as I've not yet been able to watch the results presentation. Do you think there is poor sentiment around the fall off in online sales? That would be nonsense in my view as online accounts for such a small proportion of the total business and this is primarily a bricks and mortar product offer. Online is now becoming an even bigger growth opportunity for 2024 and beyond, if CARD believe they can make online pay (click and collect benefits aside). Thanks for the commentary, TEIN.