Hi David, just curious as to how you’re getting to the 17-25% FCF yield? I know they had some one-off lease repayments which are due to fall away, but even after adjusting for those i don’t get to 17-25%. Cheers, Fred
"Their advantage stems from vertical integration, which means they design and print around 80% of their cards in-house, whereas their competitors are primarily supplied mostly by two suppliers, Hallmark and American Greetings"
and
"Furthermore, its inventory is financed by its suppliers resulting in a negative working capital cycle."
... I'm not sure how to add them up correctly.
If they make 80% of their inventory - the cards - in-house, how is their inventory financed by their suppliers?
A little more clarity on how you get that FCF number. Could you share any projections you might have. 2023 Annual numbers and first half of 2024 show FCF numbers closer around 18-40M (cash from ops - capex - lease repayments and finance costs) which is closer to 5-10%.
Hi David, just curious as to how you’re getting to the 17-25% FCF yield? I know they had some one-off lease repayments which are due to fall away, but even after adjusting for those i don’t get to 17-25%. Cheers, Fred
Hi, first of all, thanks for the article! :-)
In reading the following two statements...
"Their advantage stems from vertical integration, which means they design and print around 80% of their cards in-house, whereas their competitors are primarily supplied mostly by two suppliers, Hallmark and American Greetings"
and
"Furthermore, its inventory is financed by its suppliers resulting in a negative working capital cycle."
... I'm not sure how to add them up correctly.
If they make 80% of their inventory - the cards - in-house, how is their inventory financed by their suppliers?
A little more clarity on how you get that FCF number. Could you share any projections you might have. 2023 Annual numbers and first half of 2024 show FCF numbers closer around 18-40M (cash from ops - capex - lease repayments and finance costs) which is closer to 5-10%.
Why a you exluding the leases?
Thank you for the article. Why do you believe that their gross margins will remain stable over the coming years?
Great work as always. Hit all the key points.