Coffee Republic this morning underlined how tough it is on the High Street with news that like-for-like sales at its London stores were down 10% in the six months to September 29, as its operating loss more than doubled to £1.52m.
Thanks to new stores openings, turnover rose 19% to £15.4m for the period, as it turned in positive cash flow from operating activities of £100,000 against a negative flow of £600,000 for the same period last year.
Regional stores saw like-for-like growth of 0.7%, but the 10% drop in London meant a company-wide decline in like-for-like sales of 5.4%.
Losses on property sales of almost £1.8m sent the company's loss per share up almost five times to 1.75p, against 0.36p in 2001.
The company said it was pulling out of most of its bookstore concessions after identifying 25 "non-core" stores which "do not meet our retention criteria for the future of the business". Of 18 unprofitable stores identified for disposal in July 2002, five have already been sold and another five are under offer.
London stores are still showing negative like-for-like sales since September 28, the company said, but it is seeing strong results in its regional outlets, giving an overall 1% rise in like-for-like sales from continuing stores, which was better than expected.
Coffee Republic said its balance sheet was looking "robust", with gearing at 34%, and the financial position due to be boosted by up to £2m from the sale of 13 stores in London, which was announced last month.
Action to cut costs included reducing the central office headcount by 29%, relocating the head office to smaller premises, negotiating "substantial" price cuts with suppliers and holding down labour and costs, which should save more than £1m a year, the company said.
Coffee Republic's chairman, Bobby Hashemi, said: "We are pleased with the progress made with the restructuring , and this combined with the recent upturn in trading gives us confidence about future prospects."
He said the company, which escaped being taken over by arch-rival Caffe Nero earlier this month, remained open to offers, but was not currently involved in takeover discussions.
Coffee Republic six months to September 29m 2002
Thanks to new stores openings, turnover rose 19% to £15.4m for the period, as it turned in positive cash flow from operating activities of £100,000 against a negative flow of £600,000 for the same period last year.
Regional stores saw like-for-like growth of 0.7%, but the 10% drop in London meant a company-wide decline in like-for-like sales of 5.4%.
Losses on property sales of almost £1.8m sent the company's loss per share up almost five times to 1.75p, against 0.36p in 2001.
The company said it was pulling out of most of its bookstore concessions after identifying 25 "non-core" stores which "do not meet our retention criteria for the future of the business". Of 18 unprofitable stores identified for disposal in July 2002, five have already been sold and another five are under offer.
London stores are still showing negative like-for-like sales since September 28, the company said, but it is seeing strong results in its regional outlets, giving an overall 1% rise in like-for-like sales from continuing stores, which was better than expected.
Coffee Republic said its balance sheet was looking "robust", with gearing at 34%, and the financial position due to be boosted by up to £2m from the sale of 13 stores in London, which was announced last month.
Action to cut costs included reducing the central office headcount by 29%, relocating the head office to smaller premises, negotiating "substantial" price cuts with suppliers and holding down labour and costs, which should save more than £1m a year, the company said.
Coffee Republic's chairman, Bobby Hashemi, said: "We are pleased with the progress made with the restructuring , and this combined with the recent upturn in trading gives us confidence about future prospects."
He said the company, which escaped being taken over by arch-rival Caffe Nero earlier this month, remained open to offers, but was not currently involved in takeover discussions.
Coffee Republic six months to September 29m 2002
|
| £'000 | % increase |
Turnover | 15,415 | 19% |
| Cost of sales | -16,486 | 25% |
| Gross profit | -1,071 | 301% |
| Administrative expenses | -861 | 50% |
| Operating loss before exceptional items | -1,524 | 139% |
| Exceptional items | -408 | 101% |
| Operating loss | -1,932 | 129% |
| Loss on disposal of fixed assets | -1,898 | 3351% |
| Loss on ordinary activities | -3,830 | 327% |
| Interest payable and similar charges | -99 | 519% |
| Loss on ordinary activities | -3,929 | 407% |
| Loss per share | -1.75 | 386% |
| Loss per share before exceptional items | -0.72 | 200% |
