Caffe Nero said it had pushed store profits up 73% to £4.1m after turnover rose 70% to £26.6m, with like-for-like sales up 2%.

The chain revealed it has £7m of new bank financing, as well as £4.1m of cash balances, to fund continued expansion after a year in which store numbers rose 77% to 108, in part after the acquisition of McDonald's Aroma chain,

Caffe Nero cut its "headline" pre-tax loss by 21% to £1.5m, and said that ebitda had leapt from just £40,000 in 2001 to £1.1m.

The company's chairman and chief executive, Gerry Ford revealed that Caffe Nero paid approximately £2.3m, including the outstanding overdraft, for the 29 sites it cherry-picked from the Aroma portfolio, around £100,000 per site. Even with approximately £60,000 per site for conversion costs to change the Aroma brand to Caffe Nero, the total cost per site was well below the normal cost of £200,000 required to build a new Caffe Nero, he said. Caffe Nero also opened another 47 entirely new outlets during the year, moving into 12 new towns and cities.

Greater scale has meant the company is able to buy better and to improve margins, and increased store profit and tight cost management led to significant improvement in the bottom line, Ford said.

The company has refinanced itself through the Bank of Scotland, which has given it a cut in interest rates, a better repayment profile, and £7m extra funds, meaning a pool of more than £10m after capital expenditure for its expansion programme. Caffe Nero plans to open another 30 outlets this year, confirming its position as the largest independent coffee bar operator in the UK, Ford said.

Consumer awareness of the Caffe Nero brand grew by 27.5% over the past 18 months, nearly 2.5 times the increase of the next closest coffee bar brand, Ford said, giving Caffe Nero an overall brand awareness of 68% among UK consumers according to research by Allegra Strategies Ltd. For the third consecutive year, he said, independent research showed consumers rated Caffe Nero the number one coffee bar brand in the country.

On current trading, Ford said June and July like for like store sales growth still showed "positive single-digit figures", while overall revenues were up by more than 65% year-on-year. The ex-Aroma stores, with the bulk of site conversions to the Caffe Nero brand completed, are trading 21% above their pre-acquisition figures, Ford said, and Caffe Nero's stores have already generated an ebitda profit £400,000 higher than for the same period last year.

Caffe Nero full-year results to 31 May 2002




Number of stores



Like-for-like store sales



Store profitability






Operating loss



Pre-tax loss before exceptionals