Caffe Nero, the coffee-bar chain that may be taken private by its management, has reported a 4.5% increase in like-for-like sales for the year ending 31 May. Sales were up 29% from £70.1m to £90.7m. Non-adjusted pre-tax profit rose by 92% to £7.3m during the year, while ebitda increased by 38% to £15.6m compared to £11.3m in 2005. At year end, Caffe Nero had a cash balance of £7.1m. Net debt was £10.5m, a £1.1m reduction on the previous year. The company opened 51 new stores during the year and handed three back to landlords, giving it a net increase of 48 stores or 22% of its overall estate. It had 262 stores operating in 123 UK towns and cities at the year end. Gerry Ford, chairman of Caffe Nero, said: “This has been another year of progress for the group in which we have continued our opening programme and also delivered organic growth. Current trading is in line with expectations and the new store pipeline is well advanced.” In August the company announced it had received an informal approach from Ford. Talks are still continuing, with Saratoga, which holds Ford’s beneficial interest in Caffe Nero, and Paladin Partners discussing the possibility of making an offer for the group. Saratoga and Paladin hold 29.55m shares representing 42.76% of the issue share capital. In addition, Ford has unexercised vested options in respect of a further 10.22m shares. The company said that the Takeover Panel deemed that Ford, Saratoga and Paladin were acting in concert. Caffe Nero reiterated that there can be no guarantee any offer will be forthcoming. The group reported it had made a “steady start” to its current financial year, with sales up 21% in its first quarter and like-for-like sales maintained at 5.0%. However, it added that the hot weather had had some short-term negative impact on margins as customers switched from its hot coffee drinks to its range of iced drinks. The company reported it had opened 16 new stores in the first quarter, taking its estate to 282 stores trading in 134 towns and cities. The group said it aimed to open 45 new sites during the year to bring its total to 307 by May 2007. The company said it did not make the progress in expanding to international markets as it had hoped during the year. However, it continues to believe that the Caffe Nero brand has the potential to work overseas and is looking to open outlets with the most likely markets still the Middle East and northern Europe. The group said that currently 50% of its estate is non-smoking and trading well. The conversion of the rest of the company’s estate to non-smoking is expected to take place in the year ahead.