Leading analyst Nicholas Batram has suggested that the rollout of Prezzo could be accelerated and he predicted a positive set of results from the Jonathan Kaye-led group when it reports its full-year results on 9 April.
Batram, of Peel Hunt, issued a Buy recommendation for the group at a Target Price of 184p.
“We expect the group to deliver a solid set of numbers and an upbeat outlook statement. There is a chance that numbers come in ahead of our consensus forecast given the positive yoy industry performance in December,” he said.
“Both core brands (Prezzo and Chimichanga) are performing well and while we expect margins to decline marginally year-on-year, this largely reflects investment at the central level.
“The outlook statement should also be positive and speaking to other operators we know, Prezzo has been particularly active when it comes to new site prospects. Therefore, our 25 new openings for 2014 could be on the low side.
“The shares have enjoyed a significant re-rating, in part exacerbated by the relatively small free float. Despite its high street exposure Prezzo has performed well during the consumer downturn. As the economic recovery spreads wider and deeper, the potential to surprise on the upside should also increase.”
