In the glut of IPOs at the start of 2014, the arrival of Patisserie Holdings (CAKE) on London's Aim market in May attracted little fanfare. But the fast-growing owner of Patisserie Valerie is proving worthy of investors' attention. Last year, sales grew 27 per cent, boosting cash profits by the same rate to £15.3m if you exclude the costs associated with the IPO. The flotation proceeds were used to repay all long-term debt, so the balance sheet looks healthy, too.
The rapid growth rate can be attributed to a rigorous expansion plan. The £6.3m acquisition of premium-sandwich retailer Philpotts in February added 23 sites to the group's portfolio. But that didn’t stop management from opening a further 19 shops during the financial year, including its first site in Wales. The group now has a total of 148 stores, with a further 20 due to open this year. Most new outlets take just under two years to pay back the capital required to open them.
Management said it hopes to pay a maiden dividend this time next year. Analysts at Canaccord Genuity expect pre-tax profits of £14.2m for the current financial year, giving EPS of 11.2p (2012-13: £11.3m and 11.4p, respectively).
| PATISSERIE HOLDINGS (CAKE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 202p | MARKET VALUE: | £202m | |
| TOUCH: | 198-202p | 12-MONTH HIGH: | 215p | LOW: 170p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 19 | |
| NET ASSET VALUE: | 55p* | NET DEBT: | 3% | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011** | 40.5 | 4.9 | 242 | nil |
| 2012** | 49.5 | 6.2 | 326 | nil |
| 2013 | 60.1 | 8.2 | 8.9 | nil |
| 2014 | 76.6 | 10.4 | 10.4 | nil |
| % change | +27 | +26 | +17 | - |
Ex-div: n/a Payment: n/a *Includes intangible assets of £17.9m or 18p a share **Pre-IPO figures | ||||
