Financial Trading Blog
Stock of the day 23/11/2015 – Patisserie Holdings PLC
Since its IPO last May Patisserie, owner of upmarket café and cake store Patisserie Valerie (among others, has had a fairly impressive run, with some big movements pushing the stock higher and higher. That wasn’t always the case, however; after opening at £1.83 the stock struggled to break £2 for any significant period of time in the first 6 months after its market-debut. Yet the announcement of its first full year results as a listed company at the end of November 2014 soon changed that; a 37% increase in pre-tax profits to £11.3 million and a doubling of online sales to £2.6 million soon got previously apathetic investors interested, with Patisserie rocketing all the way to £2.64 by the start of 2015.
(Source: IT-Finance.com 23/11/2015)
Being named IPO of the Year at the end of January helped matters further, sending the stock towards £2.90, before a slump at the end of February left the stock hovering between £2.70 and £2.80 until mid-May. Yet Patisserie then provided investors with a delicious 1 year anniversary present in the form of its half year interim results; pre-tax profit jumped 45% to £7 million, whilst revenue increased by 22% to £43.7 million. This sent the stock stratospheric, climbing nearly 22% in the following 5 days to hit a high of £3.50.
This high proved to be a bit too rich for investors’ blood, however, and by the start of July the stock was trading at a more stable £3.20 following news that the company was to open 6 Debenhams concession stores. The market turmoil of July and August did take its toll on Patisserie, at one point pushing it back down to £3, but the stock’s resilience saw it consistently bounce back to £3.20 sooner rather than later. A surge at the end of October then saw Patisserie briefly hit an all-time high of £3.53, before falling across November to a current trading price of £3.38 (IT-Finance.com, 23/11/2015).
In terms of Patisserie’s full year results on Friday, investors will be keen to receive an update on the 20 stores the company had planned to open in 2015; figures-wise, analysts are looking for sales of £96.6 million alongside earnings before tax and depreciation of £17.9 million. Any expansion of the Debenham’s deal, one imagines, would be a cherry on top.
Patisserie Holdings has a consensus rating of ‘Buy’ with an average target price of £3.36.
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