Back in March Fulham Shore (FUL) warned that 'headline' cash profits would miss market expectations. Indeed, this figure came in at £7.43m, marking a minimal 2 per cent improvement on the prior year. Worse still, operating profits dropped by 91 per cent to £142,000, and the company fell into an after-tax loss of £150,000 compared with a £1.2m profit the year before. Restaurants in suburban locations were partly to blame, as opening new locations close to existing ones weakened sales. But chairman David Page isn't concerned by this: he believes such 'cannibalisation' is a necessary part of building a restaurant’s brand.
Instead, Mr Page is concerned about Brexit. He reckons the lack of clarity around an exit deal and an uncertain future for the UK economy could discourage Britons from spending money on eating out. Such concerns have prompted the group to cut planned store openings from 12 to six during the current financial year, across both the Franco Manca and The Real Greek brands. Any new openings will now be funded through internal cash flows alone, rather than borrowing. Good job too: in the reported period net debt more than doubled to £12m, while cash flow more than halved to £4.5m. Mr Page thinks there’s enough cash to fund the planned sites this year, with each one costing about £650,000.
| FULHAM SHORE (FUL) | ||||
| ORD PRICE: | 10p | MARKET VALUE: | £57m | |
| TOUCH: | 9.7-10.3p | 12-MONTH HIGH: | 19p | LOW: 8.5p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 6.6p* | NET DEBT: | 32% | |
| Year to 25 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 0.5 | -0.15 | nil | nil |
| 2015 | 8.3 | 0.04 | nil | nil |
| 2016 | 29.3 | 0.42 | nil | nil |
| 2017 | 40.4 | 1.37 | 0.2 | nil |
| 2018 | 54.7 | -0.11 | -0.1 | nil |
| % change | +35 | -108 | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £26.6m, or 4.6p a share | ||||
