Caffe Nero has turned corner, claims boss

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Ford: will open new branches

Coffee bar chain Caffe Nero increased like-for-like turnover by 11% in the year to 31 May but recorded an operating loss of more than £1m and pre-tax losses of £2.71m. Overall turnover went up by 133% to £15.6m, mainly fuelled by the increase in the number of Caffe Neros from 30 to 61 during the financial year. Despite the operating loss, chairman and chief executive Gerry Ford was upbeat about the results, which come after the company floated on the London stock exchange in March. He said: "Caffe Nero made an EBITDA (earnings before interest, tax, depreciation and amortisation) profit of £40,000 versus a loss of £219,000 in 2000. This reflects a significant moment in the development of the business as branch profits start to outstrip the overhead required to support the growth and direct costs of opening new outlets." Caffe Nero has 30 new branches planned to open by the end of this financial year and Ford was dismissive of speculation that designer coffee shops have had their day. He said: "That sort of speculation is unjustified. What people are seeing is the result of weaker brands against stronger brands. It's hard to see results like ours as anything but positive." Ford added that he expected to see the greatest increase in coffee sales in outer London and the regions from now on, as the central London market was now "more mature".