1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.
  2. Dear Guest, we realise advertising is annoying, it is however necessary to help us be a sustainable resource for all, if you want to go advert free then please use the following link to subscribe for £5 a month: Click here
    Dismiss Notice

(CAKE) Patisserie Holdings Share Chat

Discussion in 'General Share Chat (CAKE)' started by Inspiration, Jul 17, 2015.

  1. Inspiration

    Inspiration Moderator Moderator

    Messages:
    2,321
    Reputation:
    788
    Several Blueshare members hold this stock. The BoD is very experienced, including Chairman Luke Johnson, who was Chairman of Pizza Express and co-founded Strada. It floated in May 2014.

    From the company's website:

    PATISSERIE HOLDINGS PLC
    Patisserie Holdings plc is a leading UK branded café and casual dining group offering cakes, pastries, snacks, meals and hot and cold drinks from 138 stores and Flour Power City Bakery in the UK.

    It currently operates under five differentiated brands – Patisserie Valerie, Druckers – Vienna Patisserie, Philpotts, Baker & Spice and Flour Power City, offering broad customer appeal, flexibility and outstanding roll-out potential.

    The Company operates a vertically integrated business model, with all products made in-house at seven bakeries and delivered fresh daily. Products are sold primarily through stores and also a growing online channel.

    The Group's executive management team, led by Luke Johnson (Executive Chairman), Paul May (Chief Executive Officer) and Chris Marsh (Finance Director), has overseen a period of consistent growth from eight stores in 2006 to more than 130 today. The first Patisserie Valerie café was opened on Frith Street in London’s Soho district in 1926 by Belgian-born Madame Valerie, whose vision was to introduce continental patisserie products to the UK. During the Second World War, the Frith Street premises were destroyed by bombing and Madame Valerie subsequently re-established a new Patisserie Valerie café nearby on Old Compton Street, where her legacy continues to this day.

    Risk Capital Partners, the London-based private equity firm, co-founded in 2001 by Luke Johnson and Ben Redmond, backed the acquisition of Patisserie Valerie in 2006. At the time it had eight sites in Central London. The company subsequently acquired Druckers - Vienna Patisserie in 2007, Baker & Spice in 2009, Flour Power City Bakery in 2013 and Philpotts in 2014.

    http://investors.patisserieholdings.co.uk
     
    Last edited: Jul 17, 2015
  2. Inspiration

    Inspiration Moderator Moderator

    Messages:
    2,321
    Reputation:
    788
    Patisserie Valerie, the speciality café and cake chain, has priced its initial public offering at the bottom of its range amidst a softening IPO market.

    The group, owned by serial entrepreneur Luke Johnson’s Risk Capital Partners, said today that it will begin trading on London’s junior market at 170p per share under the ticker “CAKE”.

    The flotation will still value the company at £170m, however the price per share is at the very bottom of the 170p to 200p price range that was previously touted to investors.

    A Patisserie Valerie spokesman said that there had been good reception from the investment community for the flotation but management was keen to ensure that the company traded strongly after its market debut. Canaccord advised the company on its flotation.

    Market sources said the IPO market was undoubtedly more difficult than a couple of months previously when the pace and pricing of flotations staggered investors who cautioned about the quality of IPOs slipping. Recently floated businesses including Just Eat, Poundland and AO World are all trading below their listing price.

    Patisserie Valerie Holdings, which also owns Baker & Spice, Druckers Vienna Patisseries, sandwich chain Philpotts and the Flour Power City Baker, has raised £32.8m through the share placing which will be used to repay the group’s existing debts.

    The rest of the £46.5m will go to the company’s existing shareholders, including Mr Johnson, who is reducing his stake in the business from 70pc to 42.7pc.

    Mr Johnson said: "Today's announcement marks a key step in the development of the Group. We have grown the business from 8 stores to 138 today, and I'm delighted that our new investors have recognised the potential to roll out Patisserie Valerie further. We look forward to a strong future as a quoted company."

    The company is selling 48.4pc of the business through the Aim market IPO, although remaining directors will continue to own 5.9pc of the company.

    Mr Johnson bought the business from the three Scalzo brothers in 2006 for an undisclosed sum. Victor Scalzo will also be benefitting from the IPO as he is reducing his stake from 3.3pc in the business to 0.5pc. Blue chip investor Old Mutual will own 8.2pc of the floated company while Blackrock will own 7.5pc.

    Patisserie Valerie will begin unconditional trading on 19 May. The company made a pre-tax profit of £4.7m on sales of £60.1m in the year to September 2013.

    Patisserie Valerie began as a single store on Old Crompton Street in London’s Soho in 1926 and was turned into a small chain by the Scalzo family in the 1980s. The three brothers, Enzo, Robert, and Victor, created eight Patisserie Valerie stores, and the current management team bought majority stake in the group in September 2006.

    Risk Capital Partners have built the business through four acquisitions, most recently Philpotts sandwich chain at the beginning of March, which has 23 shops. In total, the purchases have set them back more than £15m.
     
  3. Inspiration

    Inspiration Moderator Moderator

    Messages:
    2,321
    Reputation:
    788
    Year end is 30.9.15, so will be watching out for results in November.

    In the meantime, CAKE have opened several concessions in various Debenhams branches, as well as shops in Fulham, Wandsworth, Newcastle and Birthingham and are expanding into Belfast and Dublin. Their website shows several other branches in the pipeline. Their menu seems similar to Cafe Rouge, but with the addition of cakes, both for eating on the premises and for special occasions (£19 - £330!)

    Am wondering if MCAP is looking high compared with NAV, but a lot is happening with their expansion plans, so will keep a look out for updates. The year end results will give a clearer picture.

    The Cafe Rouge brand has recently undergone a major refurbishment of their shops - it's a competitive market, but Luke Johnson is an experienced entrepreneur and still retains nearly 43%.
     
    Last edited: Sep 2, 2015
  4. Inspiration

    Inspiration Moderator Moderator

    Messages:
    2,321
    Reputation:
    788
    The share price hit a year high today of 355p, before dropping back slightly at close.

    The recent opening at Preston on 22nd Oct has been a huge success, with people queuing out of the door.
    http://blogpreston.co.uk/2015/10/patisserie-valerie-opens-in-preston-with-queues-out-the-door/

    Yesterday, another store opened in Birmingham. A further one opened in Debenhams, Wandsworth, on 8th October.

    There are 48,000 likes on Facebook - more than for Cafe Rouge, which has been open for years.

    Keep checking Facebook and Twitter for upto date news.

    Have just found out that they own Gail's Bakery. I often buy Gail's bread via Ocado.
     
    Last edited: Oct 27, 2015
  5. ADrunkenMarkus

    ADrunkenMarkus A Legendary Member

    Messages:
    178
    Reputation:
    48
    I bought into CAKE back in July at an average purchase price for my two tranches of 322p. It closed at 410p on Friday and has declared a 1.67p maiden dividend, so a total return of almost 28 percent is in sight after less than six months. Forecast earnings for next year imply margin expansion. We can also see an expected 80 percent increase in the dividend, reaching a 0.7 percent dividend yield. Nonetheless, at 410p then we're almost at a 29 PE ratio for 2016 consensus earnings. Giles Hargreave bought it with a decade-long horizon. I hope to hold it at least that long.

    It is a quality company and I expect it will continue to grow: forecasts indicate a 24 percent rise in earnings in 2015 vs. 2016. Assuming earnings growth of 20 percent in 2017, 2018, 2019 and 2020, then we may see earnings per share reach 29p: up over 2.5 fold on 2015. A 25 PE ratio in 2020 would see a share price of 725p, up 77 percent, and growing dividends might result in the total return doubling your money. Even in 2020, there should be substantial growth ahead as the roll out continues.

    However, there is a reliance on strong earnings growth and a relatively high rating in order to produce that return: if earnings grew at 15 percent after 2016 and the PE contracted to 20 then the share price would only rise to under 500p. It is plausible we'll see 24 percent earnings growth until 2020 and a maintenance of the high PE ratio, which would get us to about 940p in 2020. Which scenario is more likely?

    Given the low payout ratio and the company's continuing cash generation and well-funded expansion, I don't see any barrier to strong double digit dividend growth for years to come.

    Best wishes


    Mark.
     
    Latest Given Reputation Points:
    Graham Hacker: 5 Points (Thanks for insight Mark) Dec 20, 2015
    Graham Hacker likes this.
  6. Bristol87

    Bristol87 Demi God of BlueShare

    Messages:
    684
    Reputation:
    168
    Doing well in my fantasy holding!
     
    Latest Given Reputation Points:
    Inspiration: 1 Point (I wish my fantasy holding was my real holding too!) Dec 21, 2015
    ADrunkenMarkus and Inspiration like this.
  7. ADrunkenMarkus

    ADrunkenMarkus A Legendary Member

    Messages:
    178
    Reputation:
    48
    And it's risen again today, hitting almost 435p.
     
    Inspiration likes this.
  8. ADrunkenMarkus

    ADrunkenMarkus A Legendary Member

    Messages:
    178
    Reputation:
    48
    And today CAKE is one of the biggest risers on AIM! Up to 455p as I write and on a PE, for 2016 estimates, of 31.
     
    Inspiration likes this.
  9. ADrunkenMarkus

    ADrunkenMarkus A Legendary Member

    Messages:
    178
    Reputation:
    48
    I am not quite sure what has been going on. At one point, the shares surged to 483p according to Yahoo - although the day's high is also shown as 472p. However, there does not seem to have been any significant news released. In the end, they closed 3.6 percent up and the split was 49-51 sold-bought.

    Perhaps a fund manager is accumulating? A sense of deja-vu but CAKE helped keep me up (0.1% today) despite everything else. Ideas?

    Best wishes
     
    Inspiration likes this.
  10. ADrunkenMarkus

    ADrunkenMarkus A Legendary Member

    Messages:
    178
    Reputation:
    48
    I am quite pleased that CAKE went as low as 350p during the recent dips. I took the chance to top up around 370p. The froth came out of the PE ratio and so there's more opportunity to benefit from the compound growth rate of the business itself.

    Best wishes


    Mark.
     
    Latest Given Reputation Points:
    Inspiration: 5 Points (Good strategy!) Feb 23, 2016
    Inspiration likes this.
  11. Mongoose82

    Mongoose82 A Legendary Member

    Messages:
    977
    Reputation:
    40
    Read Arden Partners's note on PATISSERIE HOLDINGS PLC (CAKE), out this morning, by visiting https://www.research-tree.com/company/GB00BM4NV504

    "Patisserie Holdings, the UK’s leading branded operator of patisserie shops, has announced H1 results broadly in line with our expectations. We have edged up our PBT estimate to reflect slightly lower than expected depreciation and reduced our tax charge estimate by 60bps to 20.4% in line with the H1 charge. The Group opened 12 stores in H1 (11 Patisserie Valerie and 1 Baker & Spice) taking the size of the chain up to 177 stores, leaving the Group comfortably on track to reach its target of 20 openings by the year end. New..."
     
    ADrunkenMarkus likes this.
  12. Mongoose82

    Mongoose82 A Legendary Member

    Messages:
    977
    Reputation:
    40
    Read Beaufort Securities's note on PATISSERIE HOLDINGS PLC (CAKE), out this morning, by visiting https://www.research-tree.com/company/GB00BM4NV504

    "Patisserie delivered strong financial and operational performances during the H1 2016, continuing the positive trend seen during FY2015. Patisserie delivered a jump in revenues, which was led by Patisserie Valerie, its largest platform, expanding by +21.1%. Retail brands - Druckers and Baker & Spice - went up by +4.6% and Flour Power City, the wholesale bakery, rose by +12.5%, while Philpotts, the premium sandwich retailer fell -2% due to negative impact of earlier timing of Easter and a higher margin corporate sale. Although the Group noted increased cost pressure during the period, as well as the effect of National Living Wage kicks-in in the H2, a number of measures to mitigate this are already in place delivering efficiencies and cost savings, particularly in the supply chain. The Group improve its gross profit margin by +1%, meaning the "overall cost base will remain stable to the year-end". Patisserie enjoys a healthy balance sheet, remains solely funded from its reserves and operating cashflows, and declared its first interim dividend to shareholders. Its Board has also committed to a progressive dividend policy. Looking ahead, the Group remain focused on opening more stores and new product development, while continuing to assess acquisition opportunities..."
     
  13. Mongoose82

    Mongoose82 A Legendary Member

    Messages:
    977
    Reputation:
    40
    Read finnCap's note on PATISSERIE HOLDINGS PLC (CAKE), out this morning, by visiting https://www.research-tree.com/company/GB00BM4NV504

    "While wider sector malaise has seen the share price come off recent highs, these numbers demonstrate the discipline that management continues to exert over the business. Our ... price target values the group on 23x FY17 fd EPS with the rating warranted, in our view, by the unique proposition: 1) well positioned, vertically integrated brands which straddle two growth markets and have plenty of runway for growth; 2) successful formats in a variety of guises and multiple routes to market; 3) strong and consistent cash flows to..."
     
    bentley15 likes this.
  14. ADrunkenMarkus

    ADrunkenMarkus A Legendary Member

    Messages:
    178
    Reputation:
    48
    In my view, current prices represent a top up opportunity.

    Best wishes


    Mark.
     
  15. bentley15

    bentley15 Demi God of BlueShare

    Messages:
    1,781
    Reputation:
    851
    Great stuff, one of my smaller exploratory investments. Thanks for all your hard work and enthusiasm guys ( and Gals if appropriate ) - things are beginning to look up quite a lot - much room for optimism.

    Thanks again Bentley - Once I diversify a bit I will be looking very closely at (CAKE) !
     
    Inspiration likes this.
  16. ADrunkenMarkus

    ADrunkenMarkus A Legendary Member

    Messages:
    178
    Reputation:
    48
    Since the earlier discussion, CAKE is now even cheaper. :)

    Best wishes


    Mark.
     
    Inspiration likes this.
  17. bentley15

    bentley15 Demi God of BlueShare

    Messages:
    1,781
    Reputation:
    851
    Thanks Mark, does this mean I didn't jump in too soon ?? I am still waiting for the CR from WTG which is now edging ever closer. Bentley
     
  18. ADrunkenMarkus

    ADrunkenMarkus A Legendary Member

    Messages:
    178
    Reputation:
    48
    Perhaps so, Bentley. :)

    If I have spare cash then CAKE seems a reasonable top up candidate. Of course, DPP has kept rising and hit 52.7p at one point today. It's doubled since April.

    Best wishes


    Mark.
     
    bentley15 likes this.
  19. Graham Hacker

    Graham Hacker Moderator Moderator

    Messages:
    1,385
    Reputation:
    2,982
    @Inspiration - are you still invested?
    I've read most of what there is available including the Interims report.
    Do you think the sp has dropped due to a possible over valuation or are there other reasons? Looks a reasonable investment at today's price 280p?
     
  20. Graham Hacker

    Graham Hacker Moderator Moderator

    Messages:
    1,385
    Reputation:
    2,982
    Have hit the buy button at £2.77!
     
    ADrunkenMarkus likes this.

Share This Page