Poulaillon results quick update
My little French bakery chain Poulaillon just released its annual results and Q1 revenue updates. I had to spend time on it of course, as I was impatient for the results for a while! I am pleased with the results.
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Annual results as for Sept 30, 2021.
Better results. EBITDA up 66%.
Loss making segment water operational loss reduced at 1.2M. This was a year where terraces and indoor dining were closed half the time.
-debt is down with leverage ratio down but still high at 114% versus 144% last year as of Sept 30, 2020.
-no dividend will be declared this year.
Details on investment:
For the first time we got real details on Cash flow statement:
-”Creating and layout of restaurants”: 1.786 M Euros.
-”Buying leaseback option on the new production lines”: 2.432 M Euros.
-”Maintenance and renovation of tools and industrial facilities”: 2.332M + 0.164M euros for water.
-Various, holding company: 0.179M Euros.
In total we get:
Maintenance: 2.675 M euros.
Growth: 4.218 M euros.
création et l’agencement des points de vente (1 786) k€, l’exercice anticipé des options d’achats des lignes de productions financés par crédit-bail (2 432) k€, l’entretien et la rénovation des outils et locaux industriels BtoC (2 332) k€ et Eau (164) k€ et divers matériels affecté à l’activité holding (179 k€)
Further in the press release, they give some details on the group investments, in a new table called investments:
They do complex leaseback financing.
“A sale-leaseback enables a company to sell an asset to raise capital, then lets the company lease that asset back from the purchaser. In this way, a company can get both the cash and the asset it needs to operate its business.”
Investments in 2021:
New production line: “La ligne Moricette® of Saint-Vit” pour 3 893 k€, immediatelly sold as a leaseback. (GROWTH). This was completed in January 2021. It seems like it was a huge investment.
New production line: “lignes de production de Wittelsheim pour 1 340 k€” from 2012, where the remainder of the leaseback contract was bought in 2021.
Same for the Mineral water from 2016: “Pôle Eau Minérale pour 1 255 k€”, the remainder of the leaseback contract was bought in 2021.
Restaurants: 1 827 k€: They only opened two new stores during the year, but started investments in two windmill type restaurants to be opened in 2022, and the doubling of the size of a restaurant in Strasbourg (500k urban area) city centre.
The majority of Capex was actually the production lines and not the stores. This is more like a consumer goods (Pepsi, Mondelez) type of Capex in majority. I dont know if we will soon get in a more cash flow generative business now that the production line is completed, but in the future they will buy the remainder of the leaseback contract, so another 4 million investment is pending.
But these lease back contracts are actually as long term debt on the balance sheet and when they are paid back: “Pouf” (that is how we French speak) the debt disappears.. This company is giving me a headache! Ridiculously complex.
They do not mention the capacity utilisation with the new production line. But it is mentioned that it will double the capacity of the factory and I think that they have a lot of capacity to grow there.
The Operating cash flow was 8 millions. The maintenance investments from the cash flow statements were 2.7 millions.
Estimated earning power is then 5.3 million, on a 24 million market cap, 22% earnings yield. This is with restaurants closed half the year!
A broker has actually come out with a price target of an about 45 millions market cap.
The year is marked with a lot of Exceptional income (insurance for covid closures) and charges. In the end they even each other out.
Last quarter sales report:
Large rebound, up 35% and reaching prepandemic levels.
-Water segment sales on the right track with a new order from a bio supermarket chain of 528 pallets or maybe 300k€.
-New Franchise shop opened.
Plans for 2022:
-complete new built of 2 big windmills like this picture:
-4 new restaurants but this time with franchise model. It will be interesting to see how this new franchise model frees cash flow.
It looks like the company wants to de-lever and grow. Debt is down, Franchises, and no dividend this year. Water is getting better. I am happy with the results.
Sales to supermarkets products