Ratio Analysis Caffe Nero

Ratio Analysis A tool used to conduct a quantitative analysis of information in a company's financial statements. Ratios are calculated from current year numbers and are then compared to previous years, other companies, the industry to judge the performance of the company. Financial performance based on may 2006 interim report Caffè Nero Group plc, the leading independent UK coffee house operator of 282stores, which has been voted the top rated brand by consumers for the last six consecutive years. It had another year of solid progress, again achieving revenue and profit growth. Its revenue gone up by 29% to £90.7 million where as in year 2005 it was £70.1 million. Earning before interest, tax , depreciation and amortization has increased by 38% to £15.6 million where as it as £11.3million in year 2005. Operating profit (before prior year goodwill write off) improved by 38% to £8.2 million where as in year 2005 it was £6.0 million). Over all Operating profit improved by 74% to £8.2m from £4.7million in 2005. Pre-tax profit has improved by 92% to £7.3m where as in year 2005 it was £3.8 million Earning per share grew by 25% to 6.60p where as in year 2005 it was 5.26p. Its present Cash balance is £7.1 million. Sales increased 29% to £90.7million from £70.1 million in 2005. Store Profit (EBITDA before central overheads) rose by 37% to £23.0million where as in year 2005, it was £16.8million. EBITDA, the critical measurement of cashflow profit, jumped 38% to £15.6m where as in year 2005, it was £11.3million. In addition, it has adjusted operating profit (before prior year goodwill write off) grew by 38% to £8.2million. Adjusted pre-tax profit (before prior year goodwill write off) rose by 44% to £7.3million from £5.1million in year 2005. Profit after tax climbed to £4.5m, representing a 28% increase. Basic earnings per share rose from 5.26p in 2005 to 6.60p in 2006, a 25% uplift. Over the past 12 months, the company's share price has risen 120%. All in all, this was a very respectable financial performance. Analysts forecast for Caffe Nero – 2007 Collins Stewart Numis Securities KBC Peel Hunt Teather & Greenwood Altium DKW Shore Capital Average Sales (£m) 108.1 109.9 107.4 109.7 109.9 111.3 - 109.4 EBITDA (£m) 18.5 19 18.4 18.7 19.4 18.8 19.3 18.9 PBT (£m) 9 10.1 9.7 9.8 9.8 9.6 9.5 9.6 EPS (p)* 7.4 7.9 8.1 8.3 7.7 7.4 7.3 7.7 pre-IFRS2 option charge As shown analysts forecast for caffe nero for the year 2007 shows a further rise in sales. As per Collins Stewart (world's second largest inter-dealer broker) has predicts caffe nero sales upto £108.1 million, earning before interest, tax, depreciation and amortizations (EBITDA) upto £18.
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