Caffe Nero, the independent coffee chain, reported a 4.8% rise in underlying profits for the year to 31 May 2011, but a slight increase in like-for-like sales fell below the group’s set targets. The company, which is led by founder Gerry Ford, made an ebitda of £30.1m during the year, up from £28.7m in 2010. Pre-tax profit rose 5% from £16.6m to £17.34m during the year, while revenue increased 7.7% to £165.6m. The company, which had 435 stores operating in 214 UK towns and cities at the year end, saw store gross profit rise by 7.2% to £41.5m. Like-for-like sales increased by 1% during the year. However, the group, which refinanced its £140m debt at the start of 2011, said it targets a range of 2-4% in like-for-like sales for sites open for more than a year. Both store margin and ebitda margin also decreased slightly during the year. Store margin fell from 25.2% to 25.1%, while ebitda margin decreased from 18.7% to 18.2%. In accounts filed at Companies House, the group said that “general cost inflation and a more adverse trading environment in recent years had resulted in a marginal decline in store margin”. The company, which currently operates over 470 units, reiterated that it believed there was potential in the UK market for at least 600 Caffe Nero stores and plans to open approximately 50 sites over the next year. It expanded into Turkey in 2007 and the Middle East in 2009 and is currently reviewing other international opportunities. This year’s refinancing, which valued the chain at £350m and achieved well in advance of any requirement to do so, was supported by a lender syndicate. The senior debt syndicate was led by Lloyds with support from Carlyle, Rabobank and Co-op Bank providing a total of £90 million. The junior debt syndicate was led by Hutton Collins Partners LLP with support from Goldman Sachs European Special Situations Group and Bayside Capital financing a total of £50 million of funding. According to the accounts, the senior term loans of £90m will mature in 2017, and the mezzanine term loan of £50m will mature in 2021.