Fulham Shore (FUL) chairman David Page is so encouraged by the group’s progress during the first half, he’s considering increasing the rate of new site openings. The group reported a 35 per cent increase in operating profit to £1.63m during the first six months of its financial year, having opened two Franco Manca pizza restaurants – and another post period end – bringing the total to 43 locations. That said, Allenby Capital estimates like-for-like revenues for Franco Manca only grew by 0.5 per cent as some new openings cannibalised existing sales.
Even so, such optimism in the casual dining sector is highly unusal, as a punitive cost environment has been exacerbated by intense competition. The Franco Manca and The Real Greek owner hasn't been immune to this, either, particularly when it comes to rising labour costs and climbing business rates. As such, underlying cash profit margins contracted from 16.3 per cent this time last year to 13.8 per cent.
Allenby retains "a level of conservatism" given the difficulties facing the industry, and forecast a full-year like-for-like sales contraction of between 2 and 3 per cent for Fulham Shore. Analysts also expect pre-tax profits of £546,000 during the year to March 2019, giving a loss per share of 0.05p, compared with a £110,000 pre-tax loss and 0.1p loss per share in FY2018.
FULHAM SHORE (FUL) | ||||
ORD PRICE: | 11p | MARKET VALUE: | £61.4m | |
TOUCH: | 10.5-11p | 12-MONTH HIGH: | 15p | LOW: 8.5p |
DIVIDEND YIELD: | nil | PE RATIO: | na | |
NET ASSET VALUE: | 6.8p* | NET DEBT: | 23% |
Half-year to 23 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2017 | 27.5 | 1.10 | 0.1 | nil |
2018 | 33.0 | 1.48 | 0.2 | nil |
% change | +20 | +35 | +100 | - |
Ex-div: | na | |||
Payment: | na | |||
*Includes intangible assets of £26.2m, or 4.6p a share |