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The next meeting will be 8:00pm Monday 21 May 2012 at the Holden Arms.

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Carluccio’s

BUY SHARE TIPS

 

COMPANY                        CARLUCCIO’S

                

BUSINESS ACTIVITY     Operating Italian café food shops & retailing fine Italian foods

       

BUSINESS SECTOR         AIM – Travel & Leisure

 

REASON                            Shares have seen a massive de-rating during the past 12 months. Although results for the year to 30 September exceeded expectations, rising costs and the challenging consumer environment has meant that brokers are forecasting £5m pre-tax profit against £5.6m reported last year.

 

However, Carluccio’s has an excellent formula for its deli-restaurant chain. Each unit features a food store at the front, stocking a wide range of authentic Italian products – pasta, wine and olive oil, and a restaurant at the back.

 

The restaurant sector has thinned considerably in the past few years. Carluccio’s has net cash of £3.6m at 30 September and will continue to internally fund its roll-out of 5 units a year, from a current base of 40 sites in the UK and 1 in Dublin.

 

The operating model is aimed at the “value for money” market; with an average spend per person of £12 in the food services area and £6 in retail. The finance director spent £25k adding shares at 52p in January.

 

Carluccio’s announced a pleasing trading update at its AGM, which noted that for the 17 weeks to 25 January 09, turnover increased 14% over the prior year. Although consumer spending was more cautious it enjoyed a satisfactory Christmas. The PE is 11, having traded in the mid 30’s. The shares are a BUY. (Tipped at 58p & 67p – Feb 09)  

 Carluccio’s (CARL:LSE) underperformed the FTSE 100 index over the last week. Overall the relative performance against the index has been mixed during the last year.

PRICE                              60p (27/02/09)

 

PRICE HIGH/LOW         160p (Feb 08) / 49.5p (Jan 09)

 

YIELD                              3.7%

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