UK coffee bar chain Caffe Nero has released positive preliminary results for the year ended 31 May 2001, with turnover up 133% to £15.6m (US$22.56m) and like-for-like store sales increasing by 11%.
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Gerry Ford, chairman and CEO of the group, noted that the full year results and the bottom profit line were “encouraging”, with the business turning cash (EBITDA) positive, beating forecasts to post £40,000 versus a loss of £219,000 in FY 2000. Store profits increased 118% to £2.4m.
Operating loss was £1m, which Ford explained “is significantly better than most of our peers in the gourmet coffee market, and, with the Company cash positive, the operating loss is a reflection of the prudent depreciation policies management has adopted”.
Management appointments
During the year, the Company’s management was strengthened with several new appointments. Chris Reeve became managing director while former Pret-a-Manger HR manager Steve Carpenter adopted the role at Caffe Nero. Ben Price, a member of the original management team, also became finance director.
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By GlobalDataTwo non-executive directors were also appointed to the board. John Barnes was previously executive chairman of Harry Ramsdens and a former MD of KFC UK. David King meanwhile is the executive chairman and co-founder of Interior Services Group Plc.
Tremendous progress
Ford stressed in a statement: “This has been a year of tremendous progress and dramatic change for the company.”
“The highlight of the year came when the Company went public. In March, Caffe Nero listed on the main market of the London Stock Exchange (one of only two companies successfully to do so in the difficult first quarter of 2001), raising a net £7.5m of new money to fund expansion.”
The expansion programme of Caffe Nero is currently ahead of schedule. Thirty-one cafes were opened during the financial year and the group has 70 cafes operating in 27 locations as of today. This includes new locations added during the year under review; Glasgow, Liverpool, Chester, Durham, Nottingham, Birmingham, Leicester, Norwich and Bristol. A further 30 unit openings are planned for the current year to meet the target of 100 units operational by May 2002.
Going forward
In the current financial year, the predominant goals for the company include retaining its number one rating among coffee bar groups in the UK, to deliver a strong financial performance and to create significant value for shareholders.
“Rapid growth in the UK branded coffee bar market [is] forecast to continue”, with market research firm Allegra stating that compound growth for the next three years will be 23% and that by the end of 2003 there will be 2,400 branded coffee bars, said Ford and he added that “Caffe Nero is well positioned to take advantage of this strong growth”.
“The Company also intends to continue to gain market share, as it has done for the past two years,” he added: “With consolidation in the marketplace already underway, Caffe Nero, one of the leaders in the sector, will seek to strengthen its position even further.”
Consolidated Profit and Loss Account for the Year ended 31 May 2001
| Notes |
Proforma |
Proforma
2000 £ |
| Turnover |
15,646,978
|
6,747,492
|
| Cost of sales |
(13,254,803)
|
(5,601,508)
|
| Gross profit |
2,392,175
|
1,145,984
|
| Administrative Expenses Before Depreciation, Amortisation and Exceptional items |
(2,351,892)
|
(1,365,180)
|
| EBITDA Profit |
40,283
|
(219,196)
|
| Administrative Expenses – Depreciation |
(1,058,036)
|
(407,745)
|
| Operating Loss After Depreciation BUT BEFORE AMORTISATION AND EXCEPTIONAL COSTS |
2 (1,017,753)
|
(626,941)
|
| Administrative Expenses – Amortisation |
(363,733)
|
(363,733)
|
|
Administrative Expenses – Exceptional Item |
(721,565)
|
–
|
| Total Administrative Expenses |
(4,495,226)
|
(2,136,658)
|
| Operating Loss (After Depreciation, Amortisation and Exceptional Items) |
2 (2,103,051)
|
(990,674)
|
| Bank Interest Receivable |
82,064
|
15,290
|
| Interest Payable and Similar Charges: – Interest Payable – Exceptional item: release of issue costs and other fees on debt restructuring |
(572,024)
(158,839) (730,863) |
(395,838)
– (395,838) |
| Loss on ordinary activities before exceptionals and taxation |
(1,871,446)
|
(1,371,222)
|
| Loss on ordinary activities before taxation |
(2,751,850)
|
(1,371,222)
|
| Tax on loss on ordinary activities |
–
|
–
|
| Loss for the financial period |
(2,751,850)
|
(1,371,222)
|
| Loss per share – basic (pence) 3 |
(6.44p)
|
(4.51p)
|
| Loss per share – diluted (pence) 3 |
(6.44p)
|
(4.51p)
|
There are no recognised gains or losses other than as shown above.
