Carluccio's Share Discussion Threads

[spaceparallax] 19/1/2009 12:35

Cheers W10, the share price seems to be benefitting this morning.

[walker10] 19/1/2009 08:42

A small write up in the Times money section over the weekend - talking about directors deals - "Carluccios has been bullish in the face of the economic downturn" - Carluccio was in the enviable position of having net cash and being able to fully fund its roll out programme.

[spaceparallax] 13/1/2009 13:35

Thanks U8.

[u813061] 13/1/2009 13:11

Comment in the FT overhang cleared at 52p.

[spaceparallax] 13/1/2009 12:07

We seem to have a response to FB's purchase.

[slapdash] 12/1/2009 18:46

shows strong stock overhang...

Slap

[spaceparallax] 12/1/2009 12:10

Good to see Director buying and the Highclear holding increase, although Mr B managed to get so many shares as cheap as 52p is unfathomable?

[phil2003] 30/12/2008 16:23

22 Sep'08 - 08:26 - 243 of 284

overshot my target ;0)

[slapdash] 20/12/2008 00:16

Spaceparallax - what people have to remember is that these guys import their food from Italy... Sterling has crashed against Euro recently and so that dents profits going forward...

Also all this ridiculous talk of stripping out the cash to find the enterprise value.... I would agree if the cash was not needed but the current ratio for the business is about 0.6.... i.e. their current liabilities are much higher than their current assets... thus cash is needed on hand in case they have to pay their creditors quickly....

so at 9X and with EPS due to fall to 5.73pence this year according to forecasts (with falling £ this will be much lower).... I think it is a stock which will keep falling.... if Euro is up say 25% against pound recently surely this could wipe out profits....but I don't know percentage of food stuff imports in costs...

Also have a look here... management are ignoring the old boy Carluccio and so quality is going down apparently according to Carluccio and others.... read the reviews at the bottom of the article


Slap

[spaceparallax] 19/12/2008 09:51

Morning Slap,

From the continuing creep of the share price over recent days, it appears that the Mkt shares some of your concern. They will undoubtedly face pressures in the areas that you highlight, but hopefully, their financial health will be sufficient to carry them through. I remain happy to stay aboard because I believe that this level of share price offers good value. Interesting to see the post-xmas feedback.

[slapdash] 18/12/2008 18:05

forecasts taken down a fair amount... 2009 will be tough for them....

basically they are growing in terms of scale but margins are falling... thus it is becoming a less profitable franchise...... this is due to the economy but also structural issues such as the minimum wage....

Went to Carluccio the other day and the shop just seems very overpriced to me... loads of staff but not full when I was there.... basic scrambled eggs on toast with mushrooms and a coffe was £8.50... portion was fairly small....

ALSO... Carluccio is a firm which will be hit by the falling pound against the Euro as it imports lots of European (mainly Italian) products to sell in its stores and also for restaurant food...

It is easy to say the stock has come down a lot but it looked horrendously priced before..... now it is more highly priced that other restaurant groups although granted it has no debt... it is growing but slowly and margins are falling as growth occurs...

All in all I can see the stock coming down further... it must have a big risk premium attached to it as the 2009 job losses hit home... I would of thought we could easily fall 25% plus from here in terms of the stock..... we shall see...

Slapper

[spaceparallax] 11/12/2008 13:44

Just grabbed another few C61p - immediate future will no doubt be tough, but I think that Carl are a strong favourite to survive.

[slapdash] 09/12/2008 23:54

jazza - cash will be reflected in interest payments which go to earnings... if a company has net debt interest payments will reduce earnings... you are saying we should strip out the cash or debt but a company isn't isolated from its capital structure.... unless that structure might change..... in the absence of that people are only paying for EARNINGS as these lead to DIVIDENDS...... if there are different capital structures that lead to these that is by the by unless those structures might change...

Could say Numis is very cheap given its cash but a business like that needs cash for a rainy day....

Slap

[jazza] 09/12/2008 15:09

"p/e is best"

LOL!!!

Is that correct for a company with £50m net cash?
Is that correct for a company with £50m net debt?

Enterprise value is a better valuation tool than market cap, but to meet you half-way, the enterprise value/pre-tax-profit ratio is about 5.5 - which is still cheap.

[jazza] 09/12/2008 12:42

slapdash,

or maybe just a victim of the timing of openings...

"three locations already opened since the year end impacting 2008 pre-opening costs"

EV/EBITA ratio is just 4....cheap.

[slapdash] 09/12/2008 12:15

space - appears to me like a business expanding while its operating margin goes down..... i.e. so profits stay static or don't grow despite expansion....

probably due to higher costs coming through....

Slap

[spaceparallax] 09/12/2008 09:14

Impressive results. Outlook statement quite positive albeit with pragmatic acknowledgement of the tough times ahead.

I'd expect the share price to remain pretty solid.

[slapdash] 05/12/2008 14:01

yup but I think their shop sales will go off a cliff as people won't buy their highly priced goods... personally I think we will get a major fall in earnings in 2009.... 6-10% unemployment makes a huge difference on psycology... they will get through this but will find it tough and could go into losses in my view....

Slap

[spaceparallax] 02/12/2008 12:46

Slap,

You make fair points. I suppose the secret for Carl will be to position themselves in a semi-discretionary slot, if that makes sense. They certainly were highly valued before, but at the current sp, they're about 30% of peak, which may make them an attractive proposition.

[slapdash] 02/12/2008 12:07

they don't own their properties do they?????

Space - basically I agree that it is a reasonable firm but we must consider that unemployment looks to rocket... it is a discretionary purchase... and in my view it has been very highly valued relative to its sector... also they are a fairly staff-intensive business i.e. complicated food means lots of kitchen people etc which means higher costs now the minimum wage has gone up a lot.... also I think sales at their shop thing will fall off a cliff.... few will buy their expensive cakes etc to take away in these economic conditions.....

Slap

[spaceparallax] 24/11/2008 12:22

Slap,

I understand what you're saying, but in truth there are so many factors. As long as Carl maintain their VFM and quality, they should be better positioned than most to ride it out.

[slapdash] 22/11/2008 11:16

blueD - I think the test is whether they are busy outside peak times... i.e. on a slow Monday evening for example...slap

[blued] 18/11/2008 15:54

The new Leicester store always seems to be busy, last couple of times there was a queue for tables and a steady flow of customers in the shop. They have squeezed a few more tables in since they opened late September as well.

It isn't the level of business that concerns me as much as the margins. In the short term their prices to customers are fixed, but I'd expect their costs have risen, both for food and wages with the recent ruling on tips. I'm not sure what impact this may have but I am still a long term holder and hopeful. Tempted to buy a few more if they go any lower.

[spaceparallax] 18/11/2008 13:43

It would be interesting to get a nationwide view. Obviously, Cambridge is one of the newest venues and could be flavour of the moment - having said that, it should help in the perception stakes when Xmas dinners are being booked.