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Share watch : Many happy returns at Card Factory

August 10, 2014

Perry Gourley

Shares in the high street retailer Card Factory rose last week after it reported a strong first-half performance.Brokers at Investec believe the results mean the probability of a capital return in the medium term has improved.In its first update since its flotation in May, the firm said it remained confident of adding about 50 stores to its estate this year as it revealed a boost to sales from recent expansion.It has opened 36 stores over the past six months, taking its total to 749. This growth helped total sales rise 8.9 per cent since the start of its financial year - excluding store openings, like-for-like sales rose 2.6 per cent.Chief executive Richard Hayes said the chain has a "strong pipeline" of opportunities for new stores, with a target of opening about 50 during the full financial year."The group continued to trade well in the first half with good growth coming from the existing store estate and new store roll-out programme, as well as from our smaller but developing online proposition," he said.Investec's note following the results was upbeat."We view Card Factory as a proven brand-driven eight to ten-year roll-out story with a highly attractive, vertically integrated model. We believe the market continues to undervalue the strength of its cash generation and growth prospects," it said in a research note.The broker has a price target of 245p on the shares compared with last week's close of around 206p.Outsourcing group Quindell continues to be one of the most volatile stocks on the market. Recent steep falls in its share price prompted the company to put out a trading update last week in which it said it was performing well.Brokers at Canaccord Genuity highlighted that it re-affirmed its previous guidance on its cash generation and confidence in expectations for 2014 and beyond.Its analysts have reiterated buy recommendation on the shares with a 362p price target, more than twice current levels. Shares have hit 660p during the past year."Quindell looks cheap on conventional valuation metrics in our opinion," said the research note.Quindell's interim results for the six months to 30 June will be announced on 21 August.MarketWatchMonday: Huntsworth (I)Tuesday: Prudential (I)Wednesday: Lookers (I)Thursday: Rank (F)


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Source: Scotland on Sunday


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