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Italian food shop and restaurant chain Carluccio's celebrated its maiden interim figures since listing on Aim in December with a solid rise in profits. Flotation costs held back the reported numbers but, excluding one-offs, pre-tax profits rose by a fifth to £2m.
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The company opened three new stores in the period, to take the estate to 26 sites in London and the south-east. And it plans to open around five more each year, principally in the south-east, but eventually in the provinces. Each restaurant also includes an Italian food shop and, together with café business outside normal meal times, accounts for nearly 50 per cent of group turnover. Carluccio's also maintains high standards of food quality, and currently runs its own chef school. Importantly, this business model means that each new opening is cash-generative from day one.
Average turnover per store is now running at over £1.7m, and the highly cash-generative business model means that average cash return on cash invested continues to exceed 60 per cent.
In April, the company introduced a total smoking ban. Initial reaction has so far been favourable, with business unaffected. So Numis Securities is maintaining full-year pre-tax profits of £4.8m, with EPS of 4.8p.
| Ord price: 151p | Market value: £86m |
|---|---|
| Touch: 150-153p | 12-month High: 168p Low: 117p |
| Dividend yield: nil | PE ratio: 44 |
| Net asset value: 17p | Net cash: £950,000 |
| Half-year | Turnover | Pre-tax | Earnings | Dividend per |
|---|---|---|---|---|
| to 26 Mar | (£m) | profit (£m) | per share (p) | share (p) |
| 2005 | 17.9 | 1.64 | 2.2 | nil |
| 2006 | 21.6 | 1.04 | 1.4 | nil |
| % change | +21 | -37 | -36 | - |
Carluccio's offers investors a sound proposition. The business is well-funded, and the returns being generated justify the company's expansion plans. However, the shares now trade on 30 times forecast earnings, which is less than appetising. High enough.
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-IC-1.5.4a-prod - 31/10/2008 13:11:34 - carlos.princz
