Caffe Nero almost trebles profits
It's been a good week for UK companies' earnings reports. One day after Shell announced record profits, coffee chain Caffe Nero said its profits had almost trebled from £735,000 to £1.89 million in 2004.
Most of that increase in profits was down to expansion, with the company opening an average of five stores a month last year. Sales rose 40% as a result, but demand within individual stores also rose, with like-for-like sales increasing by 6%.
Chairman Gerry Ford said that the expansionist policy would continue, with the company hoping to open the 210th store in May this year (up from 198 at the moment). The company will also continue to buy up competitors' stores ? it bought eight Coffee Republic branches between May and November 204.
Shares finished the day up 10% at 135.5 pence. Caffe Nero is the third largest coffee chain in the UK after Starbucks and Costa Coffee, and was Europe's 20th fastest growing company in the year November 2003 to November 2004.