Any info on this one?

Carluccio’s, 'the leading UK Group of authentic Italian restaurants', is planning to join the AIM market on 14 December 2005 via a placing. Originally the company was set up by Antonio and Prescilla Carluccio on the core values of quality, value for money and authenticity.

The two main differences between Carluccio’s and its peers are its mix between café and integrated food shop on the same site and the ability to trade strongly throughout the day. With an approximate split of 78/22 between the Italian café and food shop on the same premises the company can apply for planning consent on sites not available to its ‘restaurant only’ competitors. Carluccio’s has also been the preferred choice for new sites due to the affluent, aspiring clientele it attracts. The cafés prosper even during the traditionally quiet mid-morning and mid afternoon periods mainly due to the increasingly popular ‘coffee shop culture’ and this is seen as a core factor to the Company’s success. The Directors are keen to have exterior seating as this substantially increases the number of covers while providing a vibrant feel.

At the majority of locations the customer enters the café by walking through the food shop area. This is seen as a pull factor and encourages the customer to buy produce and ultimately this leads to a number of relationships with its customers.

The UK restaurant market (excluding expenditure on drinks) is forecast by Key Note to grow by 25% over the next four years. Carluccio’s wants to ramp up its store opening schedule to further benefit from this market growth. All new openings, apart from the first, have been profitable in year one with no unprofitable branches operating in the 24 outlets in a variety of London and the South Eastern locations. The expansion plan is likely to run down the M4 Corridor with a recent opening in Oxford and the company sees a minimum of 25 sites in its pipeline.

The workforce is highly committed and motivated. All new staff attend a half day induction course and managers are put through dedicated training programmes lasting up to 18 weeks. The Company recognises the need to develop, train and invest in its chefs. Three times a year, it invites a selection of twelve of its existing chefs to take part in its Cook’s School, with the aim of improving their skills. Six of the head chefs are selected each year to attend a two week course at the “Italian Culinary Institute for Foreigners” in Turin.

The company has experienced consistent sales and profit growth and outstanding returns on capital. The business is highly cash generative and debt free. The Management expect to pay a dividend in the first year of floatation.

The placing is priced at approximately 18x 2006 earnings and has an aggressive expansion strategy funded through cash flow. This looks like a good opportunity to invest in high quality, niche restaurant brand with an experienced management team.