AIM-listed restaurant chain TAST (Tasty) today announced
(http://is.gd/OhVlJv) a placing for £2.5m at 100p each. TAST has a current market cap of £50m. The purpose of the placing is to fund continued expansion of the chain.
I am very inexperienced with placings – so what do I know – but I am rather bullish about this one. Firstly, the placing was only at a small discount to the current share price of 105p.
TAST has a current PE of 32 – and it cuts both ways as to whether you like the idea of a placing at this valuation level. It means that they’re issuing shares when their cost of equity is low – and whether that’s good or bad depends on whether you’re a buyer or a seller.
Directors have a big stake in this company, so I don’t expect them to be taking foolish risks. The Kaye family have a good track record in this sector.
What I find really encouraging about this placing is that Joint Chief Exec Samual Kaye subscribed for 150k worth of shares, and non-exec director Adam Kay did likewise.
I think we can look for further good progress from this company.