Broker raised its TP to 360p after "reassuringly good" results
Companies: Patisserie
Patisserie Holdings shares rose 4% on Wednesday after the company reported a strong first half of the year despite ongoing inflationary and market challenges. The Patisserie Valerie owner opened ten new stores and saw sales and profits increase.
The Birmingham-based Group reported revenue growth of 11% compared to H116, with gross profit up 10.6%, EBITDA up 15.6%, PBT up 15.7% and diluted EPS up 19.2%. Its gross margin edged lower at 78% (-0.3%), but its EBITDA margin improved by nearly 1%.
finnCap said the results were "reassuringly good" in an environment characterised by several downgrades to profit expectations and curtailed expansion. It raised its target price from 350p to 360p, reiterating its BUY rating.
CEO Luke Johnson said the company had delivered strong growth in both revenue and profit, adding that cash conversion had been excellent despite the challenging market conditions and inflationary environment:
"We have opened 10 new stores including our first international store in the Republic of Ireland, and the pipeline to the end of the year to achieve our target of 20 new store openings is on track. With a strong balance sheet and an experienced management team, we remain operationally focused on the organic delivery and continue to assess acquisition opportunities. Accordingly I am confident of delivering a successful second half of the year and beyond."
