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Secondary Recommendation

Carluccio's - Restaurant chain prospering with unique cafe & food shop formula

February 2009

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • CARL
  • Price:
  • 61.5p
According to a recent report 30% of new restaurants fail within the first year of opening but for those that succeed the returns can be very lucrative. One such success story is Carluccio's (FT Sector: AIM, Travel & Leisure), which operates an interesting hybrid model in which it combines an Italian style café at one end and a food shop selling authentic branded retail products imported from Italy at the other. Growth has been dramatic with turnover more than trebling from £19.8m to £64.1m in the last five years, which has in turn increased profits from £2.2m to £5.5m. However, what makes it an attractive investment is that it is still relatively small, with management believing there is room to more than double its size ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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