Madisons Coffee, the smallest of the "big five" coffee chains, was optimistic this morning after delivering full-year results that showed it had cut its operating loss by 45% to £1.1m and pushed up margins.

Company chairman Nigel Whittaker said: "The group has delivered on its operational plans set out at the beginning of the year, and achieved substantially improved financial results."

Turnover for the 53 weeks ending June 2002 fell by 9% to £13.3m after the company cut the number of stores by eight. However, gross profit fell just 1.9% to £5.2m, and the operating loss for the period fell £900,000 to £1.1m. The loss after exceptional items was down 69% and the gross profit margin increased 2.2 percentage points to 38.7%.

Administrative expenses for the period fell by 10.3% to £6.6m. Capital expenditure was cut back to just £200,000, spent on the refurbishment of two existing sites and the opening of a new store in in Huddersfield, against £3.9m last time. The loss per share improved to 2.1p from a loss of 7.1p in the previous year.

Since the year-end, Whittaker said, comparable trading has continued to improve, with like-for-like sales "in positive territory" in recent weeks. The company has also completed four site disposals for £600,000, the net book value of the assets. It now controls 30 Madisons coffee bars and four Richoux restaurants in London, while it has granted three franchises for Richoux outlets overseas.

Madisons Coffee 53 weeks to June 2002

Turnover

£13.3m

-9%

Gross profit

£5.2

-1.9%

Gross profit margin

38.7%

+ 6%

Administrative expenses

£6.6m

-10.3%

Central costs as %age of sales

7.5%

-1.4 %age points

Operating loss

£1.1m

- 45%

Loss after exceptional items

£1.1m

-69%

Loss per share

2.1p

-70%