Krispy Kreme planning further UK expansion as it reports record turnover of £119.8m: Krispy Kreme has said it is planning to open more UK stores and expand its delivery offering as it reported record turnover. Revenue for Krispy Kreme UK grew 1% to £119,751,000 for the year ending 31 December 2023 compared with a restated £118,551,000 the year before. Adjusted Ebitda was down to £15,982,000 from £16,814,000, mainly due to the increase in labour costs. This represented 13.4% of sales (2022: 14.2%). Pre-tax profit was up to £6,128,000 from £5,150,000 the previous year. Gross margin was 53.0% (2022 restated: 53.6%). An exceptional charge of £806,000 has been made in the year (2022: £2,697,000), which is the net of asset impairments, costs for aborted projects, gain on disposal of fixed assets, staff share vestment expenses and employee redundancy costs. At the year end, the company operated 129 stores across the UK, up from 125 in 2021. In their report accompanying the accounts, the directors stated: “The company has progressed well during the period despite challenging market circumstances in the UK. During the year the company continued to refine its retail estate. The company continued to grow access points, refine and develop its Delivered Fresh Daily (DFD) business with both new and long-standing partners and grew sales in the delivery and e-commerce channels as part of the company's omnichannel strategy. 2023 saw macroeconomic challenges in the UK economy with cost-of-living crises impacting consumer disposable income, inflation impacting input cost and lack of labour and goods in the market place impacting operations. Actions taken during the year include locking in contracts for input price stability, improving employee pay, working to reduce cost in overheads and taking price increases. This has been paired with a continuous drive in doughnut innovation to deliver a strong brand experience for the customer now and in the long term. In 2024, the company will continue to expand its presence with plans to open shops in quality, high profile locations, expand with its existing and new DFD partners, invest further in digitally enhanced cabinets and further expand reach and sales via digital channels.” The company said it has adequate funds for its investment plans and will continue to be supported by its US parent company. The company did not receive any government grants (2022: £37,000). No dividend was paid (2022: £5,940,000) while staff levels were slightly down to 1,743 from 1,765.

Paul launches second Le Cafe rebrand with more to follow in 2024, narrows losses despite ‘challenging’ year: French artisan bakery and patisserie brand Paul has launched its second Le Cafe rebrand, in London’s St Pancras, with more to follow in 2024. The company revealed plans last summer to upgrade a third of its 36-strong UK estate to the concept, which has already proved successful in other countries. Under future developments in its accounts for the year ending 31 December 2023, the company wrote: “During 2024, a number of the company’s original stores will see the Parisien style introduced into the UK, which can be seen a number of the stores in Paris and elsewhere across the world. In addition, the company’s store in St Pancras will be rebranded to Paul Le Cafe alongside a refresh. This will be the second Paul Le Cafe in the UK following the successful opening of the 3 Quays store. There are further plans to rebrand a further store during 2024.” The St Pancras store, located opposite Eurostar International Arivals at St Pancras International, has now opened. Revealing more about its future plans, the company added: “The potential to grow sales via the website remains an important avenue for the company. More store hubs will be introduced which will increase the area into which our products can be delivered. This will increase the sales and provide customers, with an alternative to visiting in person.” It comes as the company narrowed its losses during the year, from £2,368,813 in 2022 to £863,294. Its turnover increased from £34,954,995 to £35,852,021. This included £34,410,057 from retail and online sales (2022: £32,038,854), £1,323,782 form wholesale (2022: £2,772,513) and £118,182 from franchise fees (2022: £143,628). Ebitda grew from £400,000 to £600,000. No government grants were received (2022: £126,670). No dividends were paid (2022: nil). “The year under review has proved challenging, with outside influences continuing to impact on the business,” said director Maxime Holder. “The unsustainably high utility costs for most of the year, together with the continued increase in the minimum wage hitting labour costs, as well as raises in the cost of goods on the back of the global conflicts, all impacted the profitability of the business. It is not possible to pass all these increases directly onto the customer, which has led the company to try to attract and serve more customers each week and introduce new and innovative products. The significant impact of the increased costs beyond the company’s control have resulted in the business having to continually review costs and to seek ways of keeping spending to an appropriate level for the business. Controls to improve efficiencies in production and the resulting reduction in waste are ongoing as well as working to ensure staffing levels and productivity at each location is appropriate for the time of day to meet the customer’s demands. This work is ongoing as customers’ habits vary from day to day.” During the year, the company closed its store in Piccadilly due to the redevelopment of the block by the landlord. It also closed its offices at 30 Cannon Street and relocated to smaller offices close to its Brampton Road store.

SSP – second half has started well, with positive momentum continuing into third quarter: SSP, the operator of food and beverage outlets in travel locations worldwide, has reported that the second half of its financial year has started well, with the positive momentum in the first half continuing into the third quarter, and that its expectations for the full-year remain unchanged. It said that group sales in the third quarter – the three months to 30 June 2024 – were up 16% on last year, on a constant currency basis, with like-for-like sales growth of 6%, net contract gains of 5% and a contribution from acquisitions of 5%. The company said: “Led by an increasing demand for leisure travel, we have seen a strong sales performance across all regions. On a constant currency basis, in North America sales grew by 27% year-on-year, including a 14% benefit from the acquisitions of Midfield Concessions and Mack II in the US and ECG in Canada. In Continental Europe, sales growth of 7% reflected a solid performance across the quarter. In the UK, sales increased by 12%, with like-for-like performance up 8%, reflecting good passenger numbers in the air sector and a lower incidence of rail industrial action compared with last year. In APAC and EEME, sales rose by 33%, as we saw strong like-for-like growth across the region, driven by increasing passenger numbers, and a benefit from the ARE acquisition in Australia, which completed in early May this year.” For the nine-month period from 1 October 2023 to 30 June 2024, it said that total group revenues increased by 18%, including like-for-like sales growth of 10%, net contract gains of 4% and a benefit from acquisitions of 4%. At actual exchange rates, total group revenues increased by 15% year on year. The company said: “Our expectations for the year, as outlined at our interim results on 21 May 2024, remain unchanged. We are well-positioned for the peak summer trading period and to deliver results in line with our planning assumptions for FY24. The currency impact on our planning assumptions, if current spot rates were to continue through 2024, would also be broadly unchanged since our interim results and would represent a translation impact only.” 

Gym Group secures new £90m refinancing, reports positive trading and good membership growth in first half of 2024: The Gym Group has completed a refinancing of its bank debt with its existing banking group, comprising NatWest, HSBC and Barclays. A new three-year facility is made up of a £45m term loan and £45m revolving credit facility, at a minimum annual interest rate of 2.75% above SONIA. It comes as the business reported positive trading and good membership growth in first half of 2024. For the period ending 30 June 2024, revenue increased by 12% to £112.1m (H1 2023: £99.8m) with membership of 905,000 compared with 867,000 at 30 June 2023 and 850,000 at 31 December 2023. First half average revenue per member per month was up 9% to £20.44 (H1 2023: £18.81). Like-for-like revenue grew 9% year on year. In the first half 2024, the group opened four new gyms, taking the total to 237, and is in the fitout stage of the next four sites, which will open shortly. The company said it remains on track to open up to 12 new gyms by the year end. Net debt at 30 June 2024 was £54.6m, compared with £66.4m at the 2023 financial year end. Chief executive Will Orr said: “We are making encouraging progress with our strategic priorities under our next chapter growth plan, delivering good growth in membership and yield. We have further strengthened our financial position, while stepping up our opening programme in line with our target to open 50 high quality sites over the next three years, funded from free cashflow. After a strong first half, we expect to deliver full year results at the higher end of market expectations.”

Esquires brand owner appoints new non-exec directors: Cooks Coffee Company, owner of the Esquires brand, has appointed two new non-executive directors, including Gareth Lloyd-Jones, chief executive of High Road Restaurants Group, the owner of the Buenos Aires Steak restaurants business and the Koh Thai Tapas brand. Lloyd-Jones began his career with Tie Rack in 1985, where he quickly became the youngest franchisee and expanded his network to 14 Central London shops within a year. During his time at Tie Rack, he met city advisors who introduced him to Howard Schultz of Starbucks. He then co-purchased and rebranded two London coffee shops as Madisons Coffee, growing the business to 45 locations across the UK. Madisons Coffee was listed on the AIM stock market and included brands such as Richoux Coffee and Restaurants and Rendezvous Coffee shops, which sold to Starbucks Coffee and Out of Town Restaurants. He then went on to build a chain of five gastro pubs and four individual restaurants, which were subsequently sold into the trade. Currently, he co-runs the High Road Restaurant Group, which operates nine Argentinian steakhouses and four Thai restaurants, supported by private equity investment. At the same time, the company said Gordon Robinson will join its board as a non-executive director. It said: “Robinson is a highly experienced consultant specialising in debt advisory and finance brokering, with a distinguished banking career spanning over 38 years. He has a very broad business-sectors coverage in corporate governance (within finance) including quality retail and also food & beverage businesses. He also has expertise in real estate finance including both development and investment-led projects.” The business said that at the same time, non-executive director Mike Hutcheson will resign from his role on the board with immediate effect. Keith Jackson, executive chairman of Cooks Coffee, said: “As Cooks Coffee Company shifts towards a UK-centric focus, we are pleased to announce changes to our board. Gordon Robinson, with his extensive banking and real estate finance background, and Gareth Lloyd-Jones, known for his strategic growth and leadership in the leisure, coffee and restaurant sectors, bring a wealth of experience. Their expertise will enhance our capabilities as we execute our strategy and advance the company’s prospects. We would like to express our sincere gratitude to Mike Hutcheson and extend our appreciation for his invaluable contributions. The board remains confident in our ongoing strategy and outlook.”

Lavazza – coffee prices will rise even higher: The price of coffee is set to remain “very high” and is unlikely to drop until the middle of next year amid intense pressure on supply chains, the Italian coffee company Lavazza has said. “We have never seen such a spike in price as the trend right now,” said Giuseppe Lavazza, who chairs the company. He admitted that he had been wrong to predict last year that prices would begin to fall this year. On Monday, prices reached $4,300 (£3,356) a tonne. “The coffee supply chain is dramatically under pressure,” he said in comments reported by the Financial Times. “Coffee prices are not going down… [they’re] going to stay very high.” Worsening harvest conditions in its major production areas of Brazil, Vietnam and Colombia, and shipping disruption caused by the Middle East conflict have exacerbated inflationary pressures, helping prices reach 15-year highs, he said. For UK consumers, this has meant the price of a 1kg bag of beans rising by 15% in a year, and Giuseppe Lavazza said this could increase by 20% to 25% over the coming year. A flat white at the company’s site off Regent Street in central London now costs £3.50 to take away or £5.50 to drink in, reflecting current costs. “We have faced very, very strong headwinds. I don’t see any reason why coffee prices will go down,” Lavazza said. However, this has not dented the “strong trend” of UK consumers turning to beans to make fresh coffee at home, which began when the pandemic closed cafes but has showed no sign of slowing. In 2023, the company recorded net profits of €68m, down from €95m in 2022. Lavazza said: “People love it so much. And we think there’s an environmental element too, of people wanting to move away from using pods.”