"Much of the capital invested in the UK restaurant sector over the past five years has not been spent wisely,” Fulham Shore (FUL) chairman David Page says. The group, which owns the Franco Manca and The Real Greek restaurant brands, has returned to profit in the year to March 2019, electing to open fewer outlets than in the previous year (three net openings for Franco Manca pizzerias, compared with nine pizzeria openings and four new Real Greek restaurants in FY2018). Openings could reach double figures in the current financial year, again financed by internal cash flows, as the group opts for a “well-chosen modern estate” to counter a stricken UK high street.
The past few years have seen new London Franco Manca stores cannibalise sales from existing outlets. In its results statement, the group says that this sales erosion “has reduced”. But in a year-end March trading update, it declared that cannibalisation had “now ended”. A spokesperson described this as an “unintentional change in language”, confirming that the erosion is over and “is no longer an issue”.
Allenby Capital forecasts EPS of 0.15p in March 2020, against 0.12p in FY2019, while the gross margin is predicted to contract 30 basis points to 40 per cent.
| FULHAM SHORE (FUL) | ||||
| ORD PRICE: | 12.35p | MARKET VALUE: | £71m | |
| TOUCH: | 12.20-12.50p | 12-MONTH HIGH: | 13.25p | LOW: 8.75p |
| DIVIDEND YIELD: | nil | PE RATIO: | 31 | |
| NET ASSET VALUE: | 6.8p* | NET DEBT: | 24% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 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 | na | nil |
| 2019 | 64.0 | 1.43 | 0.1 | nil |
| % change | +17 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £25.8m, or 4.5p a share | ||||
