REG - Cooks Coffee Company - Preliminary results for year ended 31 March 2023

Cooks CoffeeAnnouncement

30/05/2023 08:00

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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 (£27.6m). Group royalty income is derived from these numbers.

-     Recurring Group revenue up 15% at NZ$3.8m (£2.0m)

-     Group revenues in the Year of NZ$6.6m (£3.4m) down 10% on prior
year NZ$7.4m (£3.8m)

-     EBITDA of NZ$0.75m (£0.39m), impacted by credit impairment of
NZ$0.45m (£0.23m)

-     Net loss before tax of NZ$3.2m (£1.7m), 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

-     Appointed 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 (£3.4m), reflecting
lower than anticipated one off revenue streams from the opening of new
stores.  These non-recurring revenues declined 30% to NZ$2.86m (£1.48m) 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 (£0.7m) 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 (£1.2m). 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 (£0.7m) during the year, a
combination of debt conversion and cash, whilst borrowings reduced by NZ$0.7m
(£0.4m).

 

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
(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
                                                    (mailto:keith.jackson@cookscoffeecompany.com)

                                                    +44 (0) 20 3814 5627 (UK)
                                                    ukinvestorrelations@cookscoffeecompany.com
                                                    (mailto:ukinvestorrelations@cookscoffeecompany.com)

 VSA Capital Limited                                +44 (0) 20 3005 5000

 (Aquis Corporate Adviser & Broker)
 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 Chandler  cookscoffee@investor-focus.co.uk (mailto:cookscoffee@investor-focus.co.uk)

 

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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