For a leasehold outfit such as Fulham Shore (FUL), the adoption of accounting standard IFRS 16 has skewered comparisons with the 2018 half year, not least because of the £1.16m in interest on lease liabilities. We can say that the chain – operators of the Franco Manca and Real Greek restaurant brands – is intent on building its estate despite the ongoing slump in the casual dining sector.
Sales were buoyed by seven new openings, although the group also managed to pare back net debt since the March year-end. Digital channels also played their part, with the launch of the Franco Manca loyalty scheme and mobile app, which must have boosted diner numbers given over 55,000 registered users were recorded at last count, although its ability to generate repeat business will only become apparent over time. The new restaurant openings resulted in capital expenditure of £4.6m, against £1.7m in the comparative period.
There was mixed news at the operating level, with improved cash flows set against a contraction in marginal profitability once the accounting change is disregarded.
Bloomberg consensus estimates have revenue of £87.2m for the March 2020 year-end, up from £64m in FY2019, with trading profit rising from £3.5m to £7.3m.
| FULHAM SHORE (FUL) | ||||
| ORD PRICE: | 11.1p | MARKET VALUE: | £63.7m | |
| TOUCH: | 11-11.2p | 12-MONTH HIGH: | 13.3p | LOW: 9.75p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 7.1p* | NET DEBT: | 22%** | |
| Half-year to 29 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 33.0 | 1.48 | 0.20 | nil |
| 2019 | 36.0 | 0.74 | 0.10 | nil |
| % change | +9 | -50 | -50 | - |
| Ex-div: | ||||
| Payment: | ||||
*Includes intangible assets of £25.4m, or 4.4p a share **Excludes lease liabilities of £69.6m | ||||
