By Denis Sheehan, Publisher, H&C News: Caffè Nero produce strong half-year recovery results after a challenging year of restrictions.
Caffè Nero today announced trading results for its half-year June – November 2021, including like for like sales growth. The Company also announced sales during the Omicron period, December 2021-January 2022 were resilient at 82% of normal trading (FY19).
UK trading since many government restrictions have come off in late January 2022 has moved up to over 90% of the business’ normal pre-Covid trading pattern.
For the first half of its current financial year FY22 (June 2021-November 2021), Caffè Nero reported sales of £135.7m, an increase of 211% for the same period in 2020, and an EBITDA of £29.4m, which is higher than its pre-Covid level.
During the first-half of FY22, Caffè Nero also experienced a notable and encouraging increase in several of its newly established sales channels.
Its Delivery business through UberEats generated £3.4m of revenue. Likewise, its Coffee At Home business for the same period achieved sales of £1.3m. The latter is a channel selling Caffè Nero’s coffee products via supermarkets, Amazon and its own website.
These new distribution channels are now on target to generate over £10m of incremental revenue for the business in its current financial year- a significant development since the pre-Covid period.
Caffè Nero Founder and Group CEO, Gerry Ford commented: “We’ve seen a very encouraging first half of our financial year. Our business showed great resilience and recovery. Further, even with the emergence of the Omicron variant, our sales have held up. We are now trading at 90% of pre-pandemic levels and we expect to see that improve further over the coming weeks and months.”
Results for FY21 (June 2020 to May 2021)
Caffè Nero has also reported its annual results for the financial year ending May 2021 (FY21).
During that period, UK sales reduced from £239.7m (FY20) to £153.3m (FY21), a decrease of 36%.
This was caused by government restrictions requiring the Company’s stores to be closed or to be restricted to take-away trade only and to be constrained in the number of seats allowed within the stores. The reduction of revenue subsequently meant that the Group generated a loss of £16.6m for the year.
Commenting on the FY21 accounts, Dr. Ford stated: “There is no doubt the pandemic and government enforced lockdowns had a significant impact on our business. The figures from our FY21 accounts show just how damaging these limitations on our trading were. We were in survival mode throughout the period. But a loss for that year of £16.6m was an improvement on the previous year, and there were signs of strengthening towards the end of the year. We entered FY22 with a bit of momentum, having been cash positive each month in the previous six months.
“Once the government restrictions came off in July 2021, our business was able to strengthen and push forward. Our first-half of FY22 reflected how resilient our core business is if we are allowed to trade with few restrictions.”