Companies: CARL ��

After opening three new stores during another sparkling half year, Italian eatery-cum-deli Carluccio’s is eyeing a total estate of 32 with a further three in the second half.

Six new stores in the year is one more than was expected and, said managing director Simon Kossoff, well within the group’s capability as it throws off so much cash. ‘We have a minimum target of five a year but we create enough cash to self-fund up to six or seven – but only if we get the right locations,’ he explained.

An appetising future awaits with the pipeline of new properties ‘stronger than it was 12 months ago’ and two future sites unveiled, including one in Heathrow’s new Terminal 5. Sites are only deemed suitable if they can trade all day, as this is the crux of the business model and the reason the group generated �2.7m cash during the period.

Outlets open from at least 8am, selling coffee and pastries and then trade all the way through to 11pm. ‘This means they generate 24% more than other restaurants that open only for lunch and dinner,’ pointed out Kossoff. ‘Then the retail part of the business generates around 21% of turnover, meaning our stores turn over around �1.7m each a year.’

Group turnover simmered up 20% to �25.9m in the six months to March, with adjusted profit before tax increasing 28% to �2.5m. A maiden interim dividend of 0.6p per share is proposed.

House broker Altium forecasts �5.1m profit for the full year for 5.9p of earnings, placing the shares on a forward p/e of 33.1, quite a premium to the restaurant sub-sector average of 21.5. Having said that, Carluccio’s looks a premium operator and with growth prospects continuing to look rosy, the shares merit their pricey rating. Hold.