4th Dec 2007 07:02
Carluccio's PLC04 December 2007 4 December 2007 Preliminary Results for 52 weeks ended 23 September 2007 Carluccio's continues to deliver strong growth Carluccio's PLC (the Company), the leading UK group of authentic Italianrestaurants with integrated food shops, is pleased to announce its preliminaryresults for 2007. 52 weeks 52 weeks To 23 to 24 September September % 2007 2006 change (restated) ---------- --------- -------- Store turnover (£m) 54.0 45.8 +18% Adjusted EBITDA (£m)* 7.1 5.6 +27% Cash flow from operations (£m) 8.0 5.7 +40% Profit before tax (£m) 5.3 3.2 +66% Adjusted profit before tax (£m)** 5.3 4.1 +28% Diluted earnings per share (pence) 6.5 4.1 +59% Total dividend (pence)*** 2.2 1.5 +47% *Adjusted to exclude £0.3m (2006: £0.2m) resulting from the first time adoptionof FRS 20, "Share based payments". 2006 is also adjusted to exclude £0.9m ofnon-recurring exceptional float costs. No float costs were incurred in 2007. **2006 adjusted to exclude £0.9m of non-recurring exceptional float costs. Nofloat costs were incurred in 2007 ***Interim dividend of 0.6p paid in June 2007 (2006: nil) Highlights •IPO target of 5 new stores per annum exceeded with 6 new openings: The Brunswick, London WC1; Spitalfields, London E1; The Trafford Centre, Manchester; Walton, Surrey; a concession in Bentalls, Kingston upon Thames and a flagship store in Covent Garden, London WC2 •The first two locations of the 2008 financial year are already open: Stratford-Upon-Avon (October 2007) and Spinningfields, Manchester (November 2007) •Pipeline for 2008 strong with the following additional locations already secure: St. Pancras, Heathrow Terminal 5 and Cambridge €2009 pipeline taking shape: Leicester and Bristol secured •Franchise agreement signed for the whole of Ireland with the first opening in Dublin expected in the spring of 2008 •Cash generated from operating activities of £8.0m with a year end cash balance of £3.1m •Recommended final dividend payment of 1.6p per ordinary share (2.2p for the full year) •Strong cash generation with average unit Cash Return on Capital Invested (CROCI) continuing in excess of 60% •Continued record of no non-contributing caffes and no caffe closures Stephen Gee, Executive Chairman, said: "I am delighted to report a sixth year ofuninterrupted, double digit growth in turnover, operating profit and earningsper share. We now have 34 stores trading successfully and have extended thegeographical scope of our brand with two openings in Manchester and one inStratford upon Avon. In addition, I am very pleased to announce the signing of afranchise and development agreement for the whole of Ireland which will extendthe Carluccio's brand to a new market of customers. "Trading since 23 September has been ahead of the previous year and in line withthe Board's expectations and I look forward to reporting further progress duringthe course of 2008." For further information, please contact: Carluccio's PLC 020 7580 3050Simon Kossoff, Managing DirectorFrank Bandura, Finance Director Hogarth Partnership Limited 020 7357 9477Andrew JaquesFiona NobletSarah Richardson 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 orLeicester Square 9.15am for 9.30am start. CHAIRMAN'S STATEMENT I am delighted to report our sixth year of uninterrupted double digit growth inturnover, operating profit and earnings per share. We completed six successful new openings, one more than anticipated at thebeginning of the financial year. We now trade from 34 stores having opened twomore since the end of the financial year. All our stores continue to be cashpositive and yield an average cash return on cash invested in excess of 60%. Trading Results The weather during the summer of this year was particularly poor with July 2007being the wettest on record. This significantly reduced the amount of timeduring which our outside seating was fully utilised. Unusually in a restaurantgroup, outside seating represents 25% of our total capacity. Despite the impactof these factors, our turnover for the year ended 23 September increased by 18%to £54m (2006: £45.8m). Our profits have again exceeded market expectations. A strong focus on oursupplier terms resulted in increased margins and a profit before tax of £5.3m(2006: £3.2m), an increase of 66%. Following the first time adoption ofFinancial Reporting Standard 20 "Share-based payments", we are now required tocharge to our profit and loss account, based on a theoretical formula, theestimated value of share options granted to employees. This has resulted in a£0.3m charge to the year under review and a £0.2m prior year adjustment.Removing this charge from both years and also adjusting for the float costsincurred in 2006 results in a profit of £5.6m (2006: £4.3m) an increase of 29%. A lower than expected effective tax rate of 27% (2006: 25%) together with thegrowth in profit before tax helped increase diluted earnings per share to 6.5p(2006: 4.1p). Our strong financial performance means we are in a position toincrease our proposed dividend substantially. The Directors are thereforerecommending a final dividend of 1.6p making a total dividend for the year of2.2p per share (2006: 1.5p), an increase of 47%. Our business continues to be strongly cash generative. After financing our storeopening programme and the payment of dividends, we still increased our net fundsat the year end to £3.1m (2006: £2.6m). This provides us with financial securityin the current economic environment of tighter credit conditions. Store Openings and Development Of the six stores we opened during the year, three were in central London, twoin the London suburbs and our first store in Manchester at the Trafford Centre.Since the year end we have opened a second store in central Manchester in theSpinningfields area which is being completely redeveloped. These two openingshave continued the programme of broadening our geographical spread in clusters.With our second recent opening in Stratford upon Avon, we have also extended ourreach up the M4 corridor from Oxford and Bicester where we already trade. Our London store openings included in August the opening of our new flagshipstore in Garrick Street, Covent Garden. This trades on two floors and includesour first private dining room for exclusive use bookings. The Company's headoffice has also moved to this building. The pipeline of potential new sites also remains strong. Apart from this year'stwo initial openings, we are scheduled to open in St Pancras, the new terminal 5building at Heathrow and Cambridge later in the year. We have exchanged on twofurther sites: one in Leicester and the second in Bristol. Both are expected toopen in the first half of the 2009 financial year. We have always believed that the Carluccio's brand has international potentialand I am pleased to announce that we have signed our first franchise agreementin October 2007. This is for the whole of Ireland with the first site in Dublinalready secured and scheduled to open in Spring 2008. If this proves successfulup to five more stores could be opened in Ireland and we will have established afranchising system that can be applied to other territories. The Sector Carluccio's is in a strong position to maintain profitable growth. The number ofpeople eating out continues to increase with expenditure on eating outapproaching 40% of total food spend. Mintel forecasts that the eating out marketwill continue growing at 6% p.a. until at least 2012. This is substantially dueto the growth in casual dining and the coffee bar culture, both of which formthe backbone of our all day trading format. Eating out regularly has become a way of life for such a large number of peoplein the UK. Consumers will look for a casual dining experience that offersexcellent value for money at a lower cost rather than change their habits.Carluccio's, where the average customer spend is £12, will be well positioned tomeet this requirement. Management and Staff We now feed 100,000 customers each week in our restaurants and more if weinclude those served in our shops. To achieve this at the level of food qualityand service standards to which we are committed requires a significant amount ofbehind the scenes support unseen by the customer. Our chefs school and our preand post opening staff training programmes combined with our sophisticatedmanagement information systems all contribute to this. We also visit Italy on aregular basis to source the best quality products for the extensive range ofshelf goods in our shops. These products are mostly branded in Carluccio'spackaging which is designed specifically for us. Our efforts were recognisedrecently in The Observer Food Monthly where Carluccio's was named in their top10 deli counters. None of this could be achieved successfully if we did not havea dedicated management team supported by an enthusiastic work force. The business community demonstrated its recognition of our achievements bymaking us Best Company 2007 at the Retailers Retailer Awards and awarding ourManaging Director, Simon Kossoff, Entrepreneur of the Year in the London regionfor customer facing businesses. Current Trading Trading since 23 September 2007 has been ahead of the previous year and in linewith expectations. Carluccio's continues to occupy a unique place in therestaurant sector with its all day trading offer and integrated food shops. Ilook forward to reporting further progress during 2008. Stephen GeeChairman3 December 2007 PROFIT AND LOSS ACCOUNTFor the period ended 23 September 2007 2007 2006 (restated) Note £'000 £'000 TURNOVER 53,979 45,759 Cost of sales (42,685) (36,810) --------- --------- GROSS PROFIT 11,294 8,949---------------------------- ------ --------- ---------Exceptional flotation expenses - (939)Other administrative expenses (6,101) (4,849)---------------------------- ------ --------- --------- --------- --------- Administrative expenses (6,101) (5,788)---------------------------- ------ --------- ---------Operating profit before exceptionalflotation expenses 5,193 4,100---------------------------- ------ --------- --------- OPERATING PROFIT 5,193 3,161 Net interest receivable 74 21 --------- --------- PROFIT ON ORDINARY ACTIVITIESBEFORE TAXATION 5,267 3,182 Tax on profit on ordinary activities (1,420) (802) --------- --------- PROFIT ON ORDINARY ACTIVITIESAFTER TAXATION 3,847 2,380 --------- --------- Basic Earnings Per Share (Pence) 3 6.8 4.2Diluted Earnings Per Share (Pence) 3 6.5 4.1 The Company's turnover and expenses all relate to continuing operations. STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Total recognised gains and losses for the yearabove as above 3,847 2,380 --------- Prior year adjustment 4 (176) --------- Total recognised gains and losses since the lastfinancial statements 3,671 --------- BALANCE SHEET as at 23 September 2007 2007 2006 (restated) Note £'000 £'000FIXED ASSETSIntangible assets 20 22Tangible assets 20,071 16,010 --------- --------- 20,091 16,032 CURRENT ASSETSStocks 1,381 1,223Debtors 1,925 1,643Cash at Bank 3,145 2,642 --------- --------- 6,451 5,508 CREDITORS: AMOUNTS FALLING DUEWITHIN ONE YEAR (10,551) (8,715) --------- --------- NET CURRENT LIABILITIES (4,100) (3,207) --------- --------- TOTAL ASSETS LESS CURRENT LIABILITIES 15,991 12,825 --------- --------- PROVISIONS FOR LIABILITIES (1,433) (1,290) --------- --------- 14,558 11,535 --------- --------- CAPITAL AND RESERVESCalled up share capital 2,849 2,840Share premium account 6 1,713 1,684Profit and loss account 6 9,996 7,011 --------- --------- SHAREHOLDERS' FUNDS 7 14,558 11,535 --------- --------- CASH FLOW STATEMENT For the period ended 23 September 2007 2007 2006 Note £'000 £'000 Net cash inflow from operating activities 8 8,002 5,720 --------- --------- Returns on investments and servicing of financeInterest paid (26) (18)Interest received 100 39 --------- --------- 74 21 Taxation (806) (687) Capital expenditurePayments to acquire tangible fixed assets (5,610) (4,738)Payments to acquire intangible fixed assets (1) (1)Receipts from sale of tangible fixed assets - 41 --------- --------- (5,611) (4,698) Dividend Paid (1,194) - --------- --------- Cash inflow before use of liquid resourcesand financing 465 356 Management of liquid resourcesShort term deposits (281) (1,250) Financing Issue of share capital 38 248 --------- --------- 38 248 --------- --------- Increase /(decrease) in cash 222 (646) --------- --------- RECONCILIATION OF NET CASH FLOW TOMOVEMENT IN NET FUNDS Increase /(decrease) in cash in the period 222 (646) Cash outflow from changes in liquid resources 281 1,250 --------- ---------Change in net funds 503 604 Net funds at 24 September 2006 2,642 2,038 --------- --------- Net funds at 23 September 2007 9 3,145 2,642 --------- --------- NOTES TO THE FINANCIAL STATEMENTS For the period ended 23 September 2007 1. Basis of preparation The financial information for the 52 weeks ended 23 September 2007 and for the52 weeks ended 24 September 2006 contained in this statement does not constitutestatutory accounts within the meaning of section 240 of the Companies Act 1985.It is, however, derived from the statutory accounts for those years. Theauditors' report on those accounts was unqualified, did not include referencesto any matters to which the auditors drew attention by way of emphasis withoutqualifying and did not contain statements under section 235 or sections 237(2)or (3) of the Companies Act 1985. Statutory accounts for the 52 weeks ended 24September 2006 have been approved by members in General Meeting and delivered tothe Registrar of Companies. 2. Accounting policies The accounting policies used to prepare the financial information contained inthis statement are consistent with those set out in the statutory accounts forthe 52 weeks ended 24 September 2006 except for the adoption of FRS 20,"Share-based Payments". There is an additional charge of £332,000 (2006:£225,000) together with a related deferred tax credit of £93,000 (2006:£66,000). In addition, the profit and loss reserve brought forward and totalshareholders' funds were increased by £72,000 due to the cumulative deferred taxcredit arising on the FRS 20 charge. 3. Earnings per share 2007 2006 £'000 £'000Numerator (restated) Profit for the year (basic earnings per share) 3,847 2,380Exceptional expenses - 939Share based payment charge net of deferred tax credit 239 159Corporation tax credit on exercise of share options (86) (524)Impact on deferred tax from reducing the corporationtax rate to 28% from 30% (88) - -------- -------- Adjusted profit for the year (adjusted earnings per share) 3,912 2,954 In calculating adjusted earnings per share, profit for the period has beenadjusted for a number of factors to enable a clearer view of underlying Companyperformance: a) Exceptional expenses relate entirely to the cost of listing the Companyon the Alternative Investment Market in December 2005 and are considerednon-recurring and have therefore been added back. No exceptional expenses wereincurred in the current financial year. b) Similarly added back are the amounts for FRS 20 "Share-based payments",adopted for the first time in this financial year. This is an accountingadjustment only and as such neither reflects a cash expense nor a liability thatwill result in the transfer of cash in the future. c) The Company received a corporation tax credit on the exercise of shareoptions by employees, the majority of which occurred on flotation. The impact onthe prior year is significant and the credit in excess of that recognised on adeferred tax asset, has been deducted to enable a clearer comparison over time. d) Due to the change in the corporation tax rate on 1 April 2008 from 30% to28%, the deferred tax balance brought forward has been reduced. The impact ofthis adjustment has been adjusted as it may not re-occur in the future 2007 2006 Number NumberDenominator ('000) ('000) Weighted average number of ordinary shares (Basic EPS) 56,924 56,300Impact of dilutive share options ('000) 2,271 1,761 -------- -------- Diluted number of ordinary shares (Diluted EPS) 59,195 58,061 The weighted average number of ordinary shares is adjusted to take into accountthe dilutive impact of share option awards made to employees. 2007 2006 Pence Pence (restated) Basic Earnings per Share 6.8 4.2Diluted Earnings per Share 6.5 4.1Adjusted Basic Earnings per Share 6.9 5.2Adjusted Diluted Earnings per Share 6.6 5.1 4. Prior year adjustment As a result of the adoption of FRS 20 "Share-based payments", there is acumulative prior year adjustment to the profit and loss account of £248,000. Therelated cumulative prior year deferred tax credit is £72,000 giving a netcumulative prior year adjustment to the profit and loss account of £176,000. Dueto the fact that the FRS 20 charge is credited back to reserves, the profit andloss reserve brought forward and total shareholders' funds were increased by theprior year deferred tax credit of £72,000 only. 5. Dividend The Directors are recommending the payment of a final dividend of 1.6p perOrdinary 5p share (2006: 1.5p), subject to obtaining shareholder approval at theforthcoming Annual General Meeting (AGM) to be held on 31 January 2008. Thedividend will be paid on 8 February 2008 to all shareholders on the register asat 11 January 2008. The amount of the final dividend is £912,000 (2006:£852,000). An interim dividend of £342,000 (2006: nil) or 0.6p per Ordinary 5pshare (2006: nil) was paid during the year. Therefore the total dividend for theyear is 2.2p per Ordinary 5p share (2006: 1.5p), equivalent to £1,254,000 (2006:£852,000). In accordance with Financial Reporting Standard 21, the final dividend is notprovided for in the 2007 financial statements. 6. Reserves Share Profit and premium loss account account Total £'000 £'000 £'000 (restated) (restated) At the beginning of the year aspreviously stated 1,684 6,939 8,623 Prior year deferred tax credit on sharebased payment charge - 72 72 -------- -------- -------- Restated balance at 24 September 2006 1,684 7,011 8,695Retained profit for the period - 3,847 3,847Premium on exercise of options 29 - 29Share based payment chargecredited to reserves - 332 332Dividend paid - (1,194) (1,194) -------- -------- -------- At 23 September 2007 1,713 9,996 11,709 -------- -------- -------- 7. Reconciliation of movements in shareholders' funds 2007 2006 £'000 £'000 (restated) Profit for the financial year 3,847 2,380Dividends paid (1,194) -Issue of shares 38 248Share based payment charge credited to reserves 332 225 -------- --------- Net additions to shareholders' funds 3,023 2,853 -------- --------- Opening shareholders' funds as previously stated 11,463 8,676Prior year deferred tax credit on sharebased payment charge 72 6 -------- --------- Opening shareholders' funds as restated 11,535 8,682 -------- --------- Closing shareholders' funds 14,558 11,535 -------- --------- 8. Reconciliation of profit to net cash inflow from operating activities 2007 2006 £'000 £'000 (restated) Operating Profit 5,193 3,161Depreciation charges 1,533 1,236Amortisation of trade marks 3 3Share based payment charge 332 225Increase in stocks (158) (283)Increase in debtors (282) (245)Increase in creditors 1,365 1,629Elimination of loss/(profit) on disposal 16 (6) -------- -------- Net cash inflow from operating activities 8,002 5,720 -------- -------- 9. Analysis of changes in net funds At 24 At 23 September September 2006 Cashflows 2007 £'000 £'000 £'000 Cash at bank and in hand 1,392 222 1,614Other liquid resources 1,250 281 1,531 --------- -------- --------- Total 2,642 503 3,145 --------- -------- --------- 10. Annual Report and Accounts The annual report and accounts for the 52 weeks ended 23 September 2007 will beposted to shareholders in due course and will also be available from the CompanySecretary at the Company's registered office: Carluccio's PLC, 35 Rose Street,London, WC2E 9EB. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Carluccios