TIDMCOOK
RNS Number : 9920A
Cooks Coffee Company Limited
30 May 2023
30 May 2023
Cooks Coffee
("Cooks Coffee", "Cooks", the "Company" or the "Group")
Preliminary results for the year ended 31 March 2023
Building a family of brands with community spirit
Cooks Coffee (NZX:CCC; AQUIS:COOK), the international coffee
focused cafe chain and parent company of the Esquires and Triple
Two brands, which is dual listed on the Aquis Growth Market in
London and the NZX in New Zealand, announces the Company's
Preliminary Report for the financial year ended 31 March 2023.
Highlights
- Total Franchisee store sales in the UK and Ireland businesses
up 24% at NZ$53.6m (GBP27.6m). Group royalty income is derived from
these numbers.
- Recurring Group revenue up 15% at NZ$3.8m (GBP2.0m)
- Group revenues in the Year of NZ$6.6m (GBP3.4m) down 10% on prior year NZ$7.4m (GBP3.8m)
- EBITDA of NZ$0.75m (GBP0.39m), impacted by credit impairment of NZ$0.45m (GBP0.23m)
- Net loss before tax of NZ$3.2m (GBP1.7m), reflecting the
combined NZ$3.2m write down of receivables and impairment of
goodwill and intangible assets relating to the Triple Two
business
- 86 cafe sites in the UK and Ireland as at 31 March 2023 up from 82 as at 31 March 2022
- Cooks Coffee dual listed on the AQUIS Growth market in November 2022
- A ppointed Elena Garside as a UK based Non-executive Director
- An additional 5 stores have been opened in the UK and Ireland
post year end with further store openings planned
Cooks Coffee continued to see strong growth across its estate
during the year, with its Franchisees' outlet sales in the UK up by
18% and up by 41% in Ireland. Like for like sales were up 13% in
the UK and 29% in Ireland, reflecting in part the timing of the
removal of Covid restrictions in each country. The overall increase
in sales from stores that operated in the reported financial year
and the prior financial year was 17%.
Group revenues for the year decreased 10% to NZ$6.6m (GBP3.4m),
reflecting lower than anticipated one off revenue streams from the
opening of new stores. These non-recurring revenues declined 30% to
NZ$2.86m (GBP1.48m) from the prior year. The non-recurring revenues
in the previous financial year included income relating to the
release of franchise fees on hold over the Covid period as well as
a significant number of new stores opened by Triple Two. New store
construction and fit out work is a feature of the Triple Two model,
which operates an internal construction company. With a lesser
number of stores opened during the year income was down but there
remains a strong pipeline of prospective franchisees and with
operational improvements in the business it is expected that growth
will continue in the future.
A number of planned store openings during the 31 March 2023
financial year ("FY23") were deferred into the new financial year
due to the effects of supply chain disruptions in Q3 and Q4, which
now appear to be easing. In addition, the Group has a strong
pipeline of further new stores planned for the current financial
year to build on its position as the fourth largest coffee focused
café chain in the UK.
Commenting, Cooks Coffee Executive Chairman Keith Jackson said:
"We are pleased to report strong sales growth across our existing
estate of coffee stores as we continue our expansion programme of
new store openings. Whilst the delay in certain store openings,
particularly in the Triple Two business and the consequential
impact of the loss of capital related revenues, has impacted the
Group's financial performance for the year ended 31 March 2023,
this has been a transformational period for the Group. We have
emerged strongly from the pandemic, which clearly impacted our
business. We look forward with confidence to an improved financial
performance in the current financial year and to updating on
further progress, in particular in relation to the numerous store
openings we have planned."
Operational Business Performance
UK & Ireland
86 Group sites in the UK and Ireland as at 31 March 2023, up
from 82 as at 31 March 2022.
Esquires Coffee UK store numbers increased to 51 at 31 March
2023, from 47 as at 31 March 2022, with seven new Esquires stores
opened and 3 closed.
The Triple Two network opened four new stores during the year
and closed six with 18 Triple Two cafes operating at the end of the
financial year.
In Ireland, outlet numbers at the end of the year were 17 and
there is an encouraging pipeline of new stores in development for
the balance of 2023 and beyond.
Global
Cooks operating revenue in the global segment was in line with
the previous financial year as the international franchised markets
continue to recover, with Saudi Arabia showing growth at an
accelerated rate.
Balance Sheet
Total equity in the company reduced to NZ$1.4m (GBP0.7m)
reflecting the NZ$3.2m write down of receivables and the impairment
of goodwill and intangible assets relating to the Triple Two
business.
The Directors assessed the 'value in use' for the Triple Two
business unit as at 31 March 2023 and as a result of this
assessment impaired goodwill by NZ$2.4m (GBP1.2m). The main
considerations for this impairment related to reassessing forecasts
and the likely slower than planned return to a higher growth
environment. Cooks is addressing structural issues with the Triple
Two business to improve the mix between recurring revenue and
one-off new store related income streams.
Group share capital increased by NZ$1.4m (GBP0.7m) during the
year, a combination of debt conversion and cash, whilst borrowings
reduced by NZ$0.7m (GBP0.4m).
Summary
The year has shown the benefits of the resilience of the
Company's franchise model and the importance of establishing
recurring revenue streams. Through the opening of additional
outlets and the continuing support provided to the Group's existing
network, the Group intends to grow its current base and continue to
build a strong network of quality outlets.
The performance in the year has also highlighted the difference
in the maturity and business models of the long-established
Esquires brand, that has been operating for more than 20 years, and
the newer Triple Two brand. Esquires has recurring revenues of
approximately 85% of its total revenues as compared to Triple Two
that has new store related revenues of approximately 90% of its
total revenues as it looks to build the store network.
The Group has two strong brands and an exciting pipeline of
opportunities as it continues its commitment to building a family
of ethical brands with community spirit. We look forward to making
further progress and to an improved financial performance in the
current financial year.
Keith Jackson
Executive Chairman
The preliminary financial statements for the year ended 31 March
2023 are in the appended PDF accessible via:
http://www.rns-pdf.londonstockexchange.com/rns/9920A_1-2023-5-30.pdf
Enquiries:
Cooks Coffee Company Limited +64 21 702 509 (New Zealand)
Keith Jackson (Executive Chairman) keith.jackson@cookscoffeecompany.com
+44 (0) 20 3814 5627 (UK)
ukinvestorrelations@cookscoffeecompany.com
VSA Capital Limited
(Aquis Corporate Adviser & Broker) +44 (0) 20 3005 5000
Andrew Raca, Simba Khatai, Alex
Cabral
(Corporate Finance)
David Scriven, Peter Mattsson
(Corporate Broking)
IFC Advisory Limited (Financial PR
& IR) +44 (0) 20 3934 6630
Tim Metcalfe, Graham Herring, Florence cookscoffee@investor-focus.co.uk
Chandler
About Cooks Coffee
Cooks Coffee Company operates in world markets and is listed on
the NZX market operated by NZX Limited in New Zealand under the
code CCC and on the AQUIS Growth market in the UK under the code
COOK. It owns the intellectual property and master franchising
rights to Esquires Coffee Houses worldwide (excluding New Zealand
and Australia) and Triple Two Coffee globally. Cooks currently
operates or franchises Esquires Coffee in the United Kingdom,
Ireland, Portugal, Bahrain, Kuwait, Saudi Arabia, Jordan, &
Pakistan; and Triple Two Coffee in the United Kingdom. For more
information visit: www.cookscoffeecompany.com
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END
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