FRIDAY 27 NOVEMBER - RESULTS - FINALS

Patisserie (CAKE:AIM) 340.5p

The Patisserie Valerie owner is coming to the end of a busy year, launching afternoon tea and takeaway coffee offerings, opening up cafes in department store Debenhams (DEB) and integrating premium sandwich retailer Philpotts into the group.

These initiatives are expected to keep up the strong growth momentum witnessed in the first half, when pre-tax profit rose by an impressive 45% to £7 million with a 22.2% increase in revenue.

We’ve been fans of the £340.5 million cap for some time as it is highly cash generative and has ambitious expansion plans. It has a free cash flow yield of 3.7%, which is expected to grow to 4.8% in 2016.

The group has a target of opening 20 new stores a year and its brand is flexible enough to facilitate a wide range of venues: high streets, service stations, concessions and full service.

We like Patisserie Valerie’s focus on high quality, fresh food, which sets it apart from run-of-the-mill coffee shop chains. (EP)