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Feast of profits from Carluccios

Created:
13 May 2008
Updated:
15 May 2008
Written by:
Malar Velaigam

Consumer spending may be tightening, but Carluccios' first half results show no sign that it is feeling the pressure yet.

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Unlike majority of its peers, the Italian deli and cafe operator has managed to serve up a strong set of results and cash generation remains strong. Finance director Frank Bandura says that cash will firstly be used to fund the roll-out of more stores, and secondly to pay out dividends, so it's no surprise that the interim dividend has been substantially increased.

The group has opened four of its five planned new stores so far and the fifth outlet in Cambridge is set to commence trading in May, which will bring the total store count to 37. Its maiden franchise operation in Dublin is faring well after opening in March, and management are keen to explore further franchise opportunities outside England.

Sites in Leicester and Bristol have been secured for Carluccios' 2009 rollout, placing the group on track to achieve its five store a year target. That said, management are mindful of the difficult trading climate and warn that conditions will remain challenging. Still, broker Altium Securities is forecasting adjusted 2008 EPS of 6.9p (6.1p in 2007) rising to 8p in 2009.

CARLUCCIOS (CARL)
ORD PRICE: 151p MARKET VALUE: £86m
TOUCH: 148-153p 12-MONTH HIGH: 230p LOW: 125p
DIVIDEND YIELD: 1.5% PE RATIO: 22
NET ASSET VALUE:  27p NET CASH: £3.6m

26 weeks
to 23 Mar		 Turnover (£m) Pre-tax profit (£m) Earnings per share (p) Dividend per share (p)
2007 25.9 2.34 2.60 0.60
2008 30.9 2.77 3.30 0.70
% change +19 +18 +27 +17

Ex-div:21 May

Payment:13 Jun

Click here for a guide to the terms used in IC results tables.

IC VIEW:

GoodValue

Shares in Carluccios have fallen victim to the negative sentiment surrounding consumer facing shares and trade at 150.5p, making them good value in the medium to long term.

Last IC View: High enough, 151p, 26 May 2006

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