Had a chance to refresh my analysis, digesting the Trading Update at the end of Jan. It was very brief on details, but here are my two cents:
- H2 revenues increased a nice +13% YoY. Probably boosted from a non-disrupted xmas trading period.
- Net cash at £5.4m lower than at HY, which shouldn't be given H2 is operationally more profitable, and just after the Xmas period. However, they have spent capex on the new Ealing restaurant, and also probably spent some money on the new Southbank flagship too. Need to see full results to know operating cashflow.
- Management still stating "confidence" and "expand and grow" for the year. Which suggests that they are still very comfortable with trading
- No mention of upcoming minimum wage increase in April and implications. IMO it will take a sustained revenue YoY growth rate of 5-10% per site, to adequately mitigate. A tall ask as the overall dining out sector is still struggling, according to industry stats.
- No mention at all of progress with franchising, ROW. Which I think is one of the key opportunities for Comptoir.
Conclusion: I'm happy with my position sizing for now. No urge to buy more, and no urge to sell based on current knowledge. Nicely NTAV backed, 5-6p worth. Think they have a format that could exploit increasing desire for middle-eastern food, modern style, that is mass-market accessible. I'm continuing to hold till results!
Update 02/Mar:
Had a chance to refresh my analysis, digesting the Trading Update at the end of Jan. It was very brief on details, but here are my two cents:
- H2 revenues increased a nice +13% YoY. Probably boosted from a non-disrupted xmas trading period.
- Net cash at £5.4m lower than at HY, which shouldn't be given H2 is operationally more profitable, and just after the Xmas period. However, they have spent capex on the new Ealing restaurant, and also probably spent some money on the new Southbank flagship too. Need to see full results to know operating cashflow.
- Management still stating "confidence" and "expand and grow" for the year. Which suggests that they are still very comfortable with trading
- No mention of upcoming minimum wage increase in April and implications. IMO it will take a sustained revenue YoY growth rate of 5-10% per site, to adequately mitigate. A tall ask as the overall dining out sector is still struggling, according to industry stats.
- No mention at all of progress with franchising, ROW. Which I think is one of the key opportunities for Comptoir.
Conclusion: I'm happy with my position sizing for now. No urge to buy more, and no urge to sell based on current knowledge. Nicely NTAV backed, 5-6p worth. Think they have a format that could exploit increasing desire for middle-eastern food, modern style, that is mass-market accessible. I'm continuing to hold till results!