By Gordon Deegan
The directors of Caffe Nero believe there are still strong growth prospects for the branded coffee market in Ireland after the company posted its first profit here.
New accounts show that the UK-owned Caffe Nero Ireland Ltd recorded a pre-tax profit of €562,000 as revenues climbed over 70% to €3.6m in the 12 months to the end of May. It had a loss of €138,000 in 2016.
The company has 10 outlets in the Republic, including eight in Dublin. Its other stores are in Galway City and Drogheda. Founded by Gerry Ford over 20 years ago, it is one of the largest coffee retailers in Europe that is still in private hands, and has around a total of 822 stores in eight countries around the world, having opened 89 new stores in the recent past.
In the UK, it has 625 stores. Last year, Caffe Nero opened 33 new stores in the UK and handed back eight outlets to landlords, resulting in a net increase of 24 stores. The directors said that the profit for the year arose due to continued growth from stores opened towards the end of the previous year, as well as a reduction in start-up costs in this new territory.
On the firm’s future developments, they said the company expects to continue to open in more locations under the Caffè Nero brand. Underlining the firm’s expansion, Staff numbers last year increased from 40 to 60, and staff costs increased from €839,000 to €1.19m.
The accounts show the firm also incurred €142,000 costs in acquiring property, plant, and equipment, compared with €1.68m in 2016. The profit last year takes account of non-cash depreciation costs of €380,000. Operating lease rentals totalled €492,000, up from €384,000 in 2016.
Last year, global revenues at Caffe Nero increased by 14% to £313m (€353m) and recorded an operating profit of £17.69m. In addition to the core range of espresso-based coffees, Caffe Nero sells a range of pastries, baked goods, freshly-made panini, sandwiches and salads, as well as pasta.