Patisserie Share Discussion Threads

[opodio] 05/12/2016 11:34

Patisserie Holdings (CAKE.L) – Buy
Patisserie Holdings (‘Patisserie’), a leading UK branded café and casual dining group, yesterday announced its preliminary results for the 12 months ended 30 September 2016 (‘FY2016’;). During the period, revenue advanced +13.3% to £104.1m and EBITDA rose +18.1% to £22.2m against comparable period (FY2015). Pre-tax profit jumped by +18.2% to £17.2m, resulting basic earnings per share expanded to 13.74p, up +20.4%. Net cash at period-end increased to £13.3m (end-FY2015: £6.1m), while operating cashflows stood at £22m (FY2015: £18.3m). On the operational front, Patisserie opened 21 new stores during the period, with first store in Northern Ireland, bringing total number of stores to 184 (end-FY2015:166 stores). The average store payback was 23 months and all new stores have been profitable from the first week of trading. Patisserie’s Executive Chairman, Luke Johnson commented “The excellent results for the year show the continuing appeal of our brands, the financial strength of the group and the strong cash generative nature of our business model. We have achieved growth in revenues and profits despite uncertain economic conditions and for the first time we have exceeded revenues of £100m: a significant achievement. We will continue to control costs and manage our supply chain in this period of macro-economic uncertainty, thus I am confident of another successful year of growth”. The Group declared a final dividend of 2p per share, up +19.8%, to be paid on 10 February 2017.

Our view: Sweet full year results from Patisserie! This time the Group delivered its 10th consecutive years of both revenue and profit growth, with the former exceeding the £100m mark for the first time. Higher profitability was achieved through a +0.8% improvement in gross margin to 78.1%, while the Group mitigated its National Living Wage impact of £0.5m by way of more efficient labour rostering method, which virtually offset the increase. The Group’s strong cash generation and balance sheet means Patisserie funded all 21 new stores opened during the period from operating cashflow. Moreover, having paid its first interim dividend since IPO (May 2014) of 1p per share on 24 June 2016, this, together with the final, takes the full year payout to 3p per share, up +79.6%. Management also reiterated its commitment to a progressive dividend policy. Post the period, the Group opened 6 new stores and remains on target to create for 20 new units per annum. Beside store rollout, it is encouraging to see its online channels also expanding rapidly. Digital sales rose by +23% to £3.8m and cake Club membership expanded by +18% to 361,000 members. The Group is now developing a customer loyalty rewards scheme, which it expects to launch in H1 FY2017. With respect to wage costs, the increase to minimum wage from 1 October 2016 will have impact of £0.1m and the Group said it will continue to “monitor and react appropriately” to future increases in the National Living Wage. Despite relatively uncertain macroeconomic conditions, the Group continue to expand healthily driven by its largest brand, Patisserie Valerie, with products ‘going like hot cakes’ as they are seen as “affordable treats in times of uncertainty” as well as a “luxurious indulgence when celebrating”. Concerns over wage pressure and ingredient price inflation persists but, nevertheless given its on-going track-record of expansion, progressive dividend policy and highly sophisticated managements, we remain optimistic. The shares are valued at FY2017E and FY2018E P/E multiples of 17x and 15x, along with dividend yields of 1.3% and 1.6%. Beaufort reiterates its Buy rating on the Shares

[opodio] 05/12/2016 10:58

400p coming

[mrchriss] 05/12/2016 10:36

Cheers, Che7win. Appreciate the feedback.

Thought the slides said a lot about the direction and management of the company, which both look good to me.

[panic investor] 05/12/2016 10:22

Bought some today

[che7win] 05/12/2016 10:15

Good analysis, There have latest slides on their investor website accompanying the latest results, I posted link last week.

[mrchriss] 05/12/2016 10:03

Morning all

Following their prelims last week I decided to take a look at CAKE over the weekend. I'm all about the free cash flow and it appears they're on track to become highly cash generative over the next few years.

I did a write up with a discounted cash flow valuation on my site if anyone's interested. Link below:



Cheers!

[woodpeckers] 03/12/2016 14:20

To your investment or your waistline? ;-)

[shauney2] 02/12/2016 10:18

A bit pricey for you mick.Maybe stick to Lidl;-)

[woodpeckers] 02/12/2016 10:07

Here you go 3rd eye, indulge!

[woodpeckers] 02/12/2016 09:43

Cheers, che, been waiting for a little pullback, hopefully north from here :-)

[che7win] 02/12/2016 08:56

Wood, Welcome aboard!

[woodpeckers] 02/12/2016 08:51

Decided to join the afternoon tea party here (courtesy of che). Couldn't get any first thing though they kept dropping the price, eventually picked some up at 277p.
Good luck all.

[monnow] 01/12/2016 19:14

Yes 2.1 mill today, 3 mill yesterday, 3.3 day before and 729k day before that.
Volume up considerably on the average daily trade.

[3rd eye] 01/12/2016 19:11

Is this stock so volatile all the time as it was today. New holder.

[zho] 01/12/2016 18:45

>>Thinly traded.>>

Yep. Only 2.2 million today, following just 3 million on the previous two days ;)

[r ball] 01/12/2016 18:35

Thinly traded.

[spud] 01/12/2016 16:22

SETS

spud

[pjh53] 01/12/2016 15:26

Can anyone explain why the share price is jumping up then down so much?

[monnow] 01/12/2016 15:18

MIKED500 : Outrageous !!

[miked500] 01/12/2016 14:12

How do share prices jump all over the place on a daily basis. This used to happen over a month. 10% swing in a day, no smooth rides with SETS.

[larva] 01/12/2016 11:27

cheers re IDP and cake firming up really nicely on L2, should go over 300p today or tomorrow and then there be a bun fight cos everyone will want


bun fight, cake. geddit

[r ball] 01/12/2016 10:28

No. work on the basis that 50% of any gain is given back.