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Morning Briefing for pub, restaurant and food wervice operators

Tue 22nd Feb 2022 - Caffe Nero reports robust trading in First Half
Caffe Nero reports robust trading in First Half: Caffe Nero has reported robust trading for its half-year (June 2021-November 2021), including strong like-for-like sales growth. The company also announced that its sales during the Omicron period (December 2021-January 2022) were resilient at 82% of normal trading (FY19). The company stated: “In fact, trading in the UK 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), Caffe 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, Caffe 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 Caffe 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. Caffe Nero founder and chief executive Gerry Ford said: “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.” Caffe 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.”

Beds and Bars buys Vienna site: Beds & Bars has bought a new property in Vienna’s 10th district, taking over the lease of a 68-room property and opening what will be St Christopher’s Inns’ 19th hostel in Europe. The company stated: “The significant business decision illustrates the company’s resilience in response to the pandemic, and signifies an intention to take advantage of the hospitality industry’s fast recovery through continued growth and expansion into attractive markets. The building, formerly run under another European operator, has a total of 260 beds across 68 rooms, each of them en-suite and newly renovated. It is ideally positioned in the Favoriten district of Vienna, only a ten-minute walk from the main train station, offering easy access to the city’s greatest attractions including local features such as Spinnerin am Kreuz tower. Renovations are currently underway, with dorm beds and private rooms available for reservation online for after the opening in April 2022. Each of the rooms is being fitted with newly built bunks, complete with personal storage lockers, privacy curtains, and all the necessary charging ports, while the social areas are being upgraded to offer the optimal environment for our guests to meet, have fun and enjoy the unique social experience that St Christopher’s Inns provides. A significant change to the property will be the inclusion of a Belushi’s Bar, adding a world class sports bar to the neighbourhood that will broadcast all the big fixtures from across the globe, accompanied by a high quality food and drink menu.” Luke Knowles, strategy and development director of Beds & Bars, said: “Vienna is a city we have been targeting for many years, and I am delighted to finally say that we operate there. It shows our clear intent to continue opening market leading hostel and bar operations in key tourist locations across Europe. We look forward to welcoming international and local guests alike to the newest addition of the Beds & Bars Group family. Prost!” Keith Knowles, chief executive of Beds & Bars, added: “The effects of covid on our entire company has been profound, painful and expensive, never forgetting that it caused the devastating loss of one of our team. So for us to continue to secure growth is a fantastic thing. And for us to secure growth in a capital city of such beauty, culture and charm as Vienna lifts my soul.”

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