8th Dec 2009 07:00
8 December 2009
Final Results for 52 weeks ended 27 September 2009
Carluccio's delivers robust performance
Carluccio's PLC, the leading UK group of authentic Italian restaurants with integrated food shops, is pleased to announce its final results for 2009.
Financial Highlights
Revenue up by +8% to £69.0m (2008: £64.1m) for the 52 week period (2008: 53 weeks)
Adjusted EBITDA* £7.6m (2008: £7.9m)
Strong cash generation financed an unaltered opening programme
Carluccio's is debt free and completed the year with a cash balance of £3.1m
Adjusted pre-tax profit** £4.7m (2008: £5.6m)
Statutory pre-tax profit £3.0m (2008: £5.6m)
Adjusted diluted EPS 7.2p (2008: 8.3p)
Basic EPS of 2.6p (2008:6.4p)
Final dividend payment maintained at 1.6p per ordinary share (2.3p for the full year)
*adjusted for the following non-trading and non-cash charges: (a) impairment provision of £1.2m (2008: nil); (b) onerous lease provision of £0.5m (2008: nil) and (c) an IFRS2 charge of £0.5m (2008: £0.3m). See note 6.
** adjusted for the following non-trading and non-cash charges: (a) an impairment provision of £1.2m (2008: nil); (b) an onerous lease provision of £0.5m (2008: nil)
Operational Highlights
Six new stores opened including the Company's first store in The Middle East and the second under franchise
45 Carluccio's open and trading (including two under franchise) with the first store of the new financial year already open and trading ahead of Board expectations
Pipeline for 2010 set to deliver at least the Company's five store minimum opening commitment, with the next two openings in Cardiff and Wimbledon
Stephen Gee, Executive Chairman, said: "I am pleased to report that, despite the challenging economic environment, our business has performed robustly, delivering an adjusted profit before tax slightly ahead of consensus market expectations. A debt free, low customer average spend business model, means that we are well placed to benefit from an improving economy.
There is no doubt that the economic climate will remain challenging during the current year but recently there have been some signs of improved consumer confidence. We have been encouraged by trading in the first eight weeks since the year end, which has been slightly ahead of the Board's expectations.
Carluccio's trades all day, combines every restaurant with a retail shop and offers customers excellent value for money. I believe that the strength of our business model will continue to differentiate Carluccio's within the casual dining sector."
For further information, please contact:
|
Carluccio's PLC |
020 7580 3050 |
|
Simon Kossoff, Managing Director |
|
|
Frank Bandura, Finance Director |
|
|
Hogarth Partnership Limited |
020 7357 9477 |
|
Fiona Noblet |
|
|
James White |
|
|
KBC Peel Hunt Ltd |
|
|
Garry Levin |
020 7418 8900 |
|
Matthew Tyler |
Photographs are available from Hogarth on request.
There will be an analyst presentation today at Carluccio's Covent Garden, Garrick Street, London WC2. Nearest tubes: Charing Cross, Covent Garden or Leicester Square 9.15 am for 9.30am start.
Chairman's Statement 2009
I am pleased to report that despite the challenging economic environment our business has performed robustly, delivering an adjusted profit before tax slightly ahead of consensus market expectations. A debt free, low customer average spend business model, means that we are well placed to benefit from an improving economy.
Results
Turnover for the financial year 2009 grew by 8% to £69.0m, against £64.1m in 2008, a 53 week year. Adjusted earnings before tax, depreciation and amortization (EBITDA)* was £7.6m (2008: £7.9m), a performance that demonstrates the highly cash generative nature of Carluccio's. This strong cash generation, together with a debt free capital structure, has supported the unaltered programme of six new store openings (including one under franchise). It has also enabled your Board to recommend an unaltered final dividend of 1.6p per ordinary share (2008: 1.6p). This will be paid on 19 February 2010 to those shareholders on the register at 18 December 2009 and equates to a total dividend for the year of 2.3p (2008: 2.3p).
Adjusted profit before tax** was £4.7m (2008: £5.6m), achieved in the face of extremely challenging trading conditions and substantial cost pressures arising from a weak Sterling/Euro exchange rate, higher utility costs and a statutory increase in the number of paid holiday days. A non-trading impairment and onerous lease charge of £1.7m was made against two stores: one in the Oxford Castle development and a second in the Trafford Centre, Manchester. We are currently looking within Oxford for a more appropriate location and are very pleased with trading in our Manchester City Centre store where turnover is increasing significantly year on year.
Our tax rate is higher than in the prior year at 49% (2008:35%) as not all of the impairment provision is tax deductible. As a result, our diluted earnings per share (EPS) was 2.6p (2008: 6.2p). Adjusting for the impact of the provision, share option charge and pre-opening expenses increases adjusted diluted EPS to 7.2p (2008: 8.3p). Further detail is provided in note 5.
Review of the business
At the time I wrote my statement last year, the country was entering the worst economic crisis in recent history and, in common with all restaurants, we suffered from the pressure on discretionary consumer spending. The value based promotions that we introduced in January and February 2009 were highly successful in attracting customers during the quietest time of the year. Unlike other restaurant groups we withdrew from prolonged periods of discounting after February and as a result our gross margin has remained stable when compared to the prior year.
During the year we opened 6 new stores, five in the UK and one under franchise in Dubai. Four of our UK openings were outside London: one in Leicester, two in Bristol and one in the department store Fenwick, Canterbury, continuing our very successful partnership with the Fenwick Group. There is an opportunity to extend this relationship as and when suitable locations become available. All of the new openings in 2009 traded at turnover levels ahead of the Board's initial expectation which continues to demonstrate the strength of our business model and confirms our belief that the Carluccio's brand has nationwide appeal.
March saw the opening of our first store under franchise in Dubai. The Board is very encouraged by the recognition of the Carluccio's brand. Trading has been ahead of expectations and our partner in the Gulf region, the Landmark Group, is currently progressing plans for two further openings in 2010. The Dublin franchise store continues to achieve turnover levels that would position it in the top ten of the UK estate. Nonetheless, onerous lease terms resulting from the current difficulties of the Irish economy mean a significant delay to the development programme. Disappointing though this is, the impact is not material to our business.
During the year we refurbished both our Fulham and Chiswick stores. Our customers have responded very favourably to the new design so we have started a programme of refurbishment that will include a number of our other stores. The first in St. Albans re-opened in November.
Since the year end we have opened the 45th Carluccio's in Exeter. This store incorporates the same new design elements and is trading well ahead of the Board's expectations. The next two openings will be in Cardiff and Wimbledon and we anticipate an opening programme of at least five new UK stores in the 2010 financial year. Our positive cash balance of £3.1m together with strong cash generation means that we will be extremely well placed to take advantage of any additional site opportunities that may arise.
The Company's management and staff have worked tirelessly to continue to provide our customers with the unique experience that has become a Carluccio's trade mark. Whether eating a full meal or simply having a coffee, buying from our shops or using our on-line shopping facility, customers enjoy the same friendly and highly attentive level of service.
Harris Interactive, a global market research company, recently polled over 2,000 consumers asking them to rate their dining experiences in the last 6 months. Carluccio's beat 35 other leading restaurant brands to top the poll and as a result we were awarded the Consumers Choice award at the recent Peach Factory Hero and Icon awards.
We have continued our work supporting Action Against Hunger. This is a charity committed to saving the lives of malnourished children and their families in over 40 countries worldwide. In recognition of our support we received a Corporate Social Responsibility Award at the 2009 charitytimes Awards.
Current trading
There is no doubt that the economic climate will remain challenging during the current year but recently there have been some signs of improved consumer confidence. We have been encouraged by trading in the first eight weeks since the year end, which has been slightly ahead of the Board's expectations.
Carluccio's trades all day, combines every restaurant with a retail shop and offers customers excellent value for money. I believe that the strength of our business model will continue to differentiate Carluccio's within the casual dining sector.
Stephen Gee
7 December 2009
*adjusted for the following non-trading and non-cash charges: (a) impairment provision of £1.2m (2008: nil); (b) onerous lease provision of £0.5m (2008: nil) and (c) an IFRS2 charge of £0.5m (2008: £0.3m). See note 6.
** adjusted for the following non-trading and non-cash charges: (a) impairment provision of £1.2m (2008: nil); (b) onerous lease provision of £0.5m (2008: nil)
INCOME STATEMENT
For the period ended 27 September 2009
|
52 weeks ended 27 September 2009 |
53 weeks ended 28 September 2008 |
||||
|
Note |
£'000 |
£'000 |
|||
|
Revenue |
69,017 |
64,137 |
|||
|
Cost of sales |
(57,153) |
(51,819) |
|||
|
GROSS PROFIT |
11,864 |
12,318 |
|||
|
Administrative expenses |
(8,924) |
(6,797) |
|||
|
OPERATING PROFIT BEFORE PROVISION FOR IMPAIRMENT AND ONEROUS LEASE COSTS |
4,648 |
5,521 |
|||
|
Impairment provision |
(1,208) |
- |
- |
||
|
Onerous lease costs |
(500) |
- |
- |
||
|
OPERATING PROFIT |
3 |
2,940 |
5,521 |
||
|
Finance income |
38 |
122 |
|||
|
Finance expense |
(22) |
(14) |
|||
|
PROFIT BEFORE TAXATION |
2,956 |
5,629 |
|||
|
Income tax expense |
4 |
(1,446) |
(1,982) |
||
|
PROFIT FOR THE FINANCIAL PERIOD |
1,510 |
3,647 |
|||
|
Basic earnings per share (pence) |
5 |
2.6 |
6.4 |
||
|
Diluted earnings per share (pence) |
5 |
2.6 |
6.2 |
||
STATEMENT OF CHANGES IN EQUITY
For the period ended 27 September 2009
|
Share capital |
Share premium account |
EBT Reserve |
Retained earnings |
Total equity |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
At 23 September 2007 |
2,849 |
1,713 |
- |
9,967 |
14,529 |
|
Profit for the financial period |
- |
- |
- |
3,647 |
3,647 |
|
Total recognised income and expense for the period |
- |
- |
- |
3,647 |
3,647 |
|
Tax on share options taken directly to reserves |
- |
- |
- |
(471) |
(471) |
|
Dividends paid |
- |
- |
- |
(1,311) |
(1,311) |
|
Issue of shares |
3 |
12 |
- |
15 |
|
|
Share based payment charge credited to reserves |
- |
- |
- |
349 |
349 |
|
Total change in equity for the period |
3 |
12 |
- |
2,214 |
2,229 |
|
At 28 September 2008 |
2,852 |
1,725 |
- |
12,181 |
16,758 |
|
Profit for the financial period |
- |
- |
- |
1,510 |
1,510 |
|
Total recognised income and expense for the period |
- |
- |
- |
1,510 |
1,510 |
|
Tax on share options taken directly to reserves |
- |
- |
- |
(52) |
(52) |
|
Dividends paid |
- |
- |
- |
(1,312) |
(1,312) |
|
Issue of shares |
67 |
957 |
(1,020) |
- |
4 |
|
Share based payment charge credited to reserves |
459 |
459 |
|||
|
Total change in equity for the period |
67 |
957 |
(1,020) |
605 |
609 |
|
At 27 September 2009 |
2,919 |
2,682 |
(1,020) |
12,786 |
17,367 |
The nature and purpose of each reserve is explained below:
Share capital - represents the nominal value of shares in issue.
Share premium account - the accumulated amount subscribed for share capital in excess of nominal value.
EBT Reserve - the cost of shares purchased by the EBT to satisfy employee share awards.
Retained earnings - the cumulative income and expenses recognised in the income statement together with cumulative income and expenses required to be taken directly to equity.
BALANCE SHEET
As at 27 September 2009
|
2009 |
2008 |
||||
|
£'000 |
£'000 |
||||
|
NON CURRENT ASSETS |
|||||
|
Intangible assets |
193 |
201 |
|||
|
Property, plant and equipment |
23,557 |
22,436 |
|||
|
Prepaid operating lease charges |
1,239 |
1,319 |
|||
|
24,989 |
23,956 |
||||
|
CURRENT ASSETS |
|||||
|
Inventories |
1,650 |
1,831 |
|||
|
Trade and other receivables |
552 |
447 |
|||
|
Prepayments |
1,899 |
1,614 |
|||
|
Prepaid operating lease charges |
113 |
106 |
|||
|
Cash and cash equivalents |
3,056 |
3,587 |
|||
|
7,270 |
7,585 |
||||
|
TOTAL ASSETS |
32,259 |
31,541 |
|||
|
CURRENT LIABILITIES |
|||||
|
Trade payables |
3,411 |
4,492 |
|||
|
Other tax and social security |
1,797 |
2,064 |
|||
|
Accruals |
4,338 |
3,924 |
|||
|
Corporation tax liabilities |
901 |
751 |
|||
|
Provisions |
132 |
- |
|||
|
10,579 |
11,231 |
||||
|
NON-CURRENT LIABILITIES |
|||||
|
Accruals |
2,192 |
1,950 |
|||
|
Deferred tax liabilities |
1,753 |
1,602 |
|||
|
Provisions |
368 |
- |
|||
|
4,313 |
3,552 |
||||
|
TOTAL LIABILITIES |
14,892 |
14,783 |
|||
|
NET ASSETS |
17,367 |
16,758 |
|||
|
EQUITY |
|||||
|
Share capital |
2,919 |
2,852 |
|||
|
Share premium account |
2,682 |
1,725 |
|||
|
EBT Reserve |
(1,020) |
- |
|||
|
Retained earnings |
12,786 |
12,181 |
|||
|
TOTAL EQUITY |
17,367 |
16,758 |
STATEMENT OF CASH FLOWS
For the period ended 27 September 2009
|
52 weeks ended 27 September 2009 |
53 weeks ended 28 September 2008 |
|
|
£'000 |
£'000 |
|
|
Profit before taxation |
2,956 |
5,629 |
|
Depreciation |
2,306 |
1,826 |
|
Amortisation of prepaid operating lease charges |
117 |
113 |
|
Amortisation of intangible assets |
70 |
70 |
|
Share based payment charge |
459 |
349 |
|
Net finance income |
(16) |
(108) |
|
Provision for impairment and onerous lease costs |
1,708 |
- |
|
Loss on disposal of property, plant and equipment |
42 |
- |
|
Cash flows from operating activities before changes in working capital |
7,642 |
7,879 |
|
Increase in inventories |
(168) |
(450) |
|
Increase in receivables |
(390) |
(138) |
|
(Decrease) / Increase in payables |
(692) |
1,544 |
|
Net cash inflow from operating activities before tax |
6,392 |
8,835 |
|
Corporation tax paid |
(1,197) |
(1,225) |
|
Net cash inflow from operating activities |
5,195 |
7,610 |
|
Cash flows from investing activities |
||
|
Finance income |
38 |
122 |
|
Payments to acquire intangible assets |
(62) |
(181) |
|
Payments to acquire property, plant and equipment |
(4,328) |
(5,803) |
|
Prepaid operating lease charges - lease premiums |
(44) |
- |
|
Proceeds from sale of property, plant and equipment |
- |
4 |
|
Net cash outflow from investing activities |
(4,396) |
(5,858) |
|
Cash flows from financing activities |
||
|
Finance cost |
(22) |
(14) |
|
Proceeds from issue of share capital |
4 |
15 |
|
Equity dividends paid |
(1,312) |
(1,311) |
|
Net cash outflow from financing activities |
(1,330) |
(1,310) |
|
Net (decrease)/increase in cash and cash equivalents |
(531) |
442 |
|
Cash and cash equivalents at start of period |
3,587 |
3,145 |
|
Cash and cash equivalents at end of period |
3,056 |
3,587 |
NOTES
1. GENERAL INFORMATION
Carluccio's PLC is a public limited company incorporated in the United Kingdom with registration number 02001576. The Company is domiciled in the United Kingdom and has its registered office at 35 Rose Street, Covent Garden, London WC2E 9EB. The Company's shares are traded on the Alternative Investment Market ("AIM") of the London Stock Exchange.
2. STATEMENT OF COMPLIANCE
The financial information in the announcement does not constitute the company's statutory accounts for the periods ended 27 September 2009 or 28 September 2008.
Statutory accounts for the period ended 28 September 2008 have been filed with the Registrar of Companies and those for the period ended 27 September 2009 are expected to be published by 31 January 2010, both sets of accounts have been reported on by the Independent Auditors. The Independent Auditors' report on the Annual Report and Accounts for the period ended 28 September 2008 was unqualified, did not draw attention to any matters by way of empahsis, and did not contain a statement under Sections 237(2) or 237(3) of the Companies Act 1985. The Independent Auditors' report on the Annual Report and Accounts for the period ended 27 September 2009 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under Sections 498(2) or 498(3) of the Companies Act 2006.
Basis of preparation
The financial information in these preliminary results has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively Adopted IFRSs). The accounting policies adopted in these preliminary results have been consistently applied to all the years presented and are consistent with the policies used in the preparation of the statutory accounts for the period ended 27 September 2009. Other than as indicated below, the principal accounting policies adopted are unchanged from those used in the preparation of the statutory accounts for the period ended 28 September 2008 and the interim announcement published on 19 May 2009. During the year under review, the Company has reclassified crockery, cutlery and utensils (CCU) balances from inventories to property, plant and equipment to more accurately reflect their use within the business. They are stated at cost less accumulated depreciation and any impairment loss. No prior year adjustment has been made as amounts are immaterial. Based on further consideration and consultation since the interim announcement, the company is not required to prepare consolidated financial statements.
3. OPERATING PROFIT
Operating profit is stated after charging:
|
52 weeks ended 27 September 2009 |
53 weeks ended 28 September 2008 |
||
|
£'000 |
£'000 |
||
|
Operating lease rentals for land and buildings - minimum contract amounts |
4,792 |
4,000 |
|
|
Operating lease rentals for land and buildings - turnover based amounts |
1,317 |
1,327 |
|
|
Share based payment charge |
459 |
349 |
|
|
Amortisation of intangible assets |
70 |
70 |
|
|
Depreciation of property, plant and equipment |
2,306 |
1,826 |
|
|
Amortisation of prepaid operating lease charges |
117 |
113 |
|
|
Loss on the sale of property, plant and equipment |
42 |
- |
|
|
Pre-opening expenses (including pre-opening rent) |
1,080 |
1,159 |
4. INCOME TAX EXPENSE
|
52 weeks ended 27 September 2009 |
53 weeks ended 28 September 2008 |
||
|
£'000 |
£'000 |
||
|
UK Corporation tax |
|||
|
Current tax on profits for the period |
1,347 |
1,394 |
|
|
Adjustment in respect of prior periods |
- |
(65) |
|
|
Total current tax |
1,347 |
1,329 |
|
|
Deferred tax |
|||
|
Deferred tax on profits for the period |
99 |
653 |
|
|
Total deferred tax |
99 |
653 |
|
|
Total expense for the period in the income statement |
1,446 |
1,982 |
|
The tax expense for the period is higher than the standard rate of corporation tax in the UK. The differences are explained below:
|
52 weeks ended 27 September 2009 |
53 weeks ended 28 September 2008 |
||
|
£'000 |
£'000 |
||
|
Profit before taxation |
2,956 |
5,629 |
|
|
Profit on ordinary activities multiplied by effective rate of corporation tax in the UK of 28% (2008: 29%) |
828 |
1,632 |
|
|
Adjustments for the effect of: |
|||
|
Expenses not deductible for tax purposes |
509 |
299 |
|
|
Adjustment to prior year tax charge |
- |
(65) |
|
|
Effect of deferred tax on share based payments |
107 |
122 |
|
|
Other adjustments |
2 |
(6) |
|
|
Total expense for the period in the income statement |
1,446 |
1,982 |
5. EARNINGS PER SHARE
|
52 weeks ended 27 September 2009 |
53 weeks ended 28 September 2008 |
||
|
Numerator |
£'000 |
£'000 |
|
|
Profit for the financial period (basic earnings per share) |
1,510 |
3,647 |
|
|
Provision for impairment and onerous leases net of tax |
1,394 |
- |
|
|
Share based payments net of tax |
511 |
462 |
|
|
Pre-opening expenses net of tax |
778 |
823 |
|
|
Adjusted profit for the financial period (adjusted earnings per share) |
4,193 |
4,932 |
In calculating adjusted earnings per share, profit for the financial period has been adjusted for several items to enable a clearer view of underlying Company performance:
The provisions for impairment and onerous leases do not relate to trading activities of the Company and are non-cash in nature.
IFRS 2 "Share based payment transactions" requires that entities calculate the cost of issuing employee options. This is an exercise resulting in an accounting adjustment only. It is neither a cash expense nor a liability that will result in the outflow of cash in the future and is therefore added back to provide a clearer picture of underlying Company performance. Similarly, the deferred tax implications of IFRS 2 are adjusted for.
Pre-opening expenses are incurred in the creation and marketing of new caffé and food shops prior to opening to the public and the commencement of revenue generating activities and as such are unique to each store. These are therefore added back to provide a clearer picture of underlying Company performance.
|
52 weeks ended 27 September 2009 |
53 weeks ended 28 September 2008 |
||
|
Number |
Number |
||
|
Denominator |
('000) |
('000) |
|
|
Weighted average number of ordinary shares (basic earnings per share) |
57,044 |
57,005 |
|
|
Impact of dilutive share options |
855 |
2,190 |
|
|
Diluted number of ordinary shares (diluted earnings per share) |
57,899 |
59,195 |
|
52 weeks ended 27 September 2009 |
53 weeks ended 28 September 2008 |
||
|
Pence |
Pence |
||
|
Basic Earnings per Share |
2.6 |
6.4 |
|
|
Diluted Earnings per Share |
2.6 |
6.2 |
|
|
Adjusted Basic Earnings per Share |
7.4 |
8.7 |
|
|
Adjusted Diluted Earnings per Share |
7.2 |
8.3 |
6. ADJUSTED EARNINGS BEFORE INTEREST TAX DEPRECIATION and AMORTISATION (EBITDA)
|
52 weeks ended 27 September 2009 |
53 weeks ended 28 September 2008 |
||
|
£'000 |
£'000 |
||
|
Operating Profit* |
4,648 |
5,521 |
|
|
Depreciation and amortisation |
2,493 |
2,009 |
|
|
EBITDA |
7,141 |
7,530 |
|
|
IFRS 2 charge |
459 |
349 |
|
|
Adjusted EBITDA |
7,600 |
7,879 |
* adjusted for the following non-trading and non-cash charges: (a)impairment provision of £1.2m (2008: nil); (b)onerous lease provision of £0.5m (2008: nil)
7. DIVIDEND
The Directors are recommending the payment of a final dividend of 1.6p per Ordinary 5p share (2008:1.6p), subject to obtaining shareholder approval at the forthcoming Annual General Meeting (AGM) to be held on 5 February 2010. The dividend will be paid on 19 February 2010 to all shareholders on the register as at 18 December 2009. The amount of the final dividend is £913,000 (2008: £912,000). An interim dividend of £399,000 (2008: £399,000) or 0.7p per Ordinary 5p share (2008: 0.7p) was paid during the year. Therefore the total dividend for the year is 2.3p per Ordinary 5p share (2008: 2.3p), equivalent to £1,312,000 (2008: £1,311,000).
8. ANNUAL REPORT AND ACCOUNTS
The annual report and accounts for the 52 weeks ended 27 September 2009 will be posted to shareholders in due course and will also be available from the Company Secretary at the Company's registered office: Carluccio's PLC, 35 Rose Street, London, WC2E 9EB and available to download from the Company's website at www.carluccios.com/company/aim/financial-statements.
Related Shares:
Carluccios