Counting The Cost Of Franchise Conversion

Thursday, December 20, 2007

Coffee and deli bar operator Coffee Republic - which has outlets in Birmingham, Coventry and Worcester - yesterday said its first half operating loss before exceptional items narrowed to £811,000 versus £886,000 the previous year.

The company said revenues for the six months to September 23 fell from £5.37 million to £2.88 million as it converted some of its owned outlets over to franchise. It added it had seen like-for-like sales growth of 4.2 per cent in the six months against minus one per cent the previous year.

Chairman Peter Breach told shareholders: "The strategy adopted by the board over the last year has resulted in a marked improvement in the operational and financial performance, although there is still much work to do." Mr Breach also confirmed that Coffee Republic had landed a contract with Cine-world UK to introduce its concept into all 73 sites, increasing brand exposure across the UK.

"These concessions are being rolled out from early 2008 and the benefits of this achievement will be seen in next year's financial statements," he added.

Media & Marketing | E-Business | Nevill Boyd Maunsell | Post Business email Counting the cost of franchise conversion Dec 20 2007 Coffee and deli bar operator Coffee Republic - which has outlets in Birmingham, Coventry and Worcester - yesterday said its first half operating loss before exceptional items narrowed to £811,000 versus £886,000 the previous year.

The company said revenues for the six months to September 23 fell from £5.37 million to £2.88 million as it converted some of its owned outlets over to franchise. It added it had seen like-for-like sales growth of 4.2 per cent in the six months against minus one per cent the previous year.

Chairman Peter Breach told shareholders: "The strategy adopted by the board over the last year has resulted in a marked improvement in the operational and financial performance, although there is still much work to do." Mr Breach also confirmed that Coffee Republic had landed a contract with Cine-world UK to introduce its concept into all 73 sites, increasing brand exposure across the UK.

"These concessions are being rolled out from early 2008 and the benefits of this achievement will be seen in next year's financial statements," he added.

Story continues Continue story ADVERTISEMENT "Progress in opening bars has been considerable. We are on track to have 80 bars - franchise and company owned - at the end of this financial year.

"Thirteen new regional development franchises have been sold, bringing the total to nineteen. These RDF's have driven the growth of the business in the UK and, with this growth under way, it has been decided to pause and review policy for future rollout.

"Eight international master franchises have been finalised and opening of international bars should be accelerating over the next year.

"Despite the modest size of our company I believe the potential for growth in certain Asian markets may, assuming global economic and political stability, soon exceed that of European and American markets."

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Coffee Republic Plc
109-123 Clifton Street
London,

Phone: 020 7033 0600
Fax: 020 7033 0464

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