Prezzo (PRZ) has been one of the few restaurant groups to have expanded through the downturn and, after revealing a solid performance during 2012, it's a strategy that shows few signs of changing. Admittedly, last summer's Olympics did have a short-term effect on trading - but the group also opened 31 new restaurants, bringing the total estate to 211. That expansion helped boost underlying pre-tax profit by 11 per cent in 2012 to £18.3m.
Expanding during recessionary conditions may look doubtful. But a concentration on high-visibility, lower-cost town-centre locations - rather than face tougher competition in out-of-town developments - has paid off. Indeed, new restaurants were opened in prime London locations such as the King's Cross concourse, as well as in Manchester, Bath and Belfast. The expansion also ensured particularly strong cash generation, with net cash flow from operations having increased 42 per cent to £31.4m - which helped net cash to rise to £4.4m from just £39,000 in 2011. Those funds will support management's continued programme of restaurant openings - 25 new site openings are planned by the year-end. Chairman Michael Carlton also sees prospects for more settled trading patterns over the summer period.
Broker Canaccord Genuity forecasts pre-tax profit for 2013 of £19.9m, giving EPS of 6.48p (from £18.3m and 6.05p in 2012).
PREZZO (PRZ) | ||||
|---|---|---|---|---|
| ORD PRICE: | 92.5p | MARKET VALUE: | £212m | |
| TOUCH: | 90-92.5p | 12-MONTH HIGH: | 92.5p | LOW: 63p |
| DIVIDEND YIELD: | 0.3% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 40p | NET CASH: | £4.4m | |
| Year to 30 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 85.8 | 3.88 | 0.47 | 0.20 |
| 2009 | 91.0 | 10.2 | 2.97 | 0.20 |
| 2010 | 105 | 14.0 | 4.33 | 0.225 |
| 2011 | 124 | 16.1 | 5.17 | 0.25 |
| 2012 | 145 | 17.3 | 5.66 | 0.275 |
| % change | +17 | +7 | +9 | +10 |
Ex-div: 12 Jun Payment: 5 Jul | ||||
