Expansion programme doubles profits at Caffè Nero

03 February 2005 by
Expansion programme doubles profits at Caffè Nero

Caffè Nero is to maintain its ambitious expansion programme, which saw it open five stores a month during the past six months, the coffee bar chain said today.

The rapid expansion, which means the operator now has 198 outlets, helped pre-tax profits to rise a record 118%, to £2.14m, in the six months to 30 November, against the same period last year.

Turnover rose by 40% to £32.8m, with like-for-like sales up by 6%.

Chairman and chief executive Gerry Ford said the company was still on target to have at least 210 stores by its financial year end in May, at an average opening rate of four a month.

Since May outlets have opened in Hitchin, Oxford, Glasgow, Croydon, Leamington Spa, Derby, Formby, Torquay, Godalming, Cambridge, Lancaster and Petersfield.

Eight Coffee Republic stores have been bought in the South-west and West of England in locations including Brighton, Bath, Cardiff, Banbury, Weymouth and Yeovil.

These stores have since been rebranded as Caffè Nero outlets and seen turnover go up by 25% overall.

The company is also building on its relationship with House of Fraser, opening sites in conjunction with the department store in Glasgow, London's Victoria, Croydon and Guildford.

Its relationship with airports operator BAA is progressing, too.

Since May the group has opened extra sites in Heathrow's terminals 1, 2 and 4, bringing its total within airports to eight.

Momentum had been maintained since the end of the half-year, Ford added, with like-for-like sales going up 8.5% during December and January

"In the second half, Caffè Nero will continue along the same path as in the first half, focusing on strong new store expansion in the UK regions," he stressed.

"We still believe it is an opportune time to grow as site availability is good and rents are reasonable," he added.

In the next two months the chain expects to open sites in Edinburgh, Manchester, Wakefield, Bury St Edmunds, Maidstone, Huddersfield, Halifax and Stockton.

by Nic Paton

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