Cooks Coffee Company Limited Analysis

Overview

Cooks Coffee is building an ethical café group with great cafes owned and run by local people.

Cooks is listed on the New Zealand Stock Exchange (NZX: CCC) and joined the Aquis Exchange in London in November 2022 under the ticker “Cook”.

The Cooks franchise model promotes individual entrepreneurship and local community engagement.

Esquires Coffee was founded in 1993 in Vancouver and Cooks Coffee acquired the global rights (excluding Australia and New Zealand), focusing on operations in the UK and Ireland in 2013.

Cooks Coffee Company is committed to the highest standards of sustainability in all areas of the business with all coffee being derived from certified sources.

As of the end of Sep 2024, Cooks Coffee has 104 outlets spread across its 9 international markets.

Performance

The following information was extracted from Cooks Coffee Company Limited's full year results, released on 30 May 2024:

Cooks Coffee (NZX:CCC; AQUIS:COOK), the international coffee focused cafe chain and parent company of the Esquires, The Organic Coffee Co brand, which is dual listed on the Aquis Market in London and the NZX in New Zealand, announces the Company’s Preliminary Report for the financial year ended 31 March 2024 (“FY24”). Figures reported below are for continuing business and the prior period has been restated to provide the appropriate comparative data.

Highlights

• Total franchisee store sales in UK & Ireland up 18% at NZ$58.2m (FY23: NZ$49.5m).
• UK store sales up 21% at NZ$38.3m (FY23: NZ$31.6m), double the industryaverage of 9%.
• Ireland store sales up 11% at NZ$19.9m, (FY23: NZ$17.9m) compared to the industry growth of 1%.
• 75 Group sites in the UK and Ireland as at 31 March 2024, up from 64 as at 1 April 2023.
• Net store numbers growth in UK of 18% and 15% in Ireland versus industry growth of 4% in UK and 1% in Ireland.
• Group revenue, which is highly correlated to store sales, up 19% at NZ$4.7m, NZ$3.9m.
• EBITDA of NZ$0.4m before impairment of receivables.
• The focus on suburbs and market towns has sheltered Esquires branded stores from the permanent changes in consumer behaviours post Covid, such as the working from home lifestyle change.
• The strategic direction plus the focus on organic coffee products and an enhanced food offering with local sourcing where possible, delivered by local owners of the franchised stores – ‘The local chain’ has proved successful for the brand.
• Growth in UK has been driven through strong performances by the Regional Developers in the Southeast, London, East England & East Midlands. The appointment of two new Regional Developers during FY24 for the North of England and the Southwest and South Wales will accelerate the growth in those regions.
• Appointment of Aiden Keegan as Group CEO. Aiden brings more than 20 years’ experience with the company in both core markets of UK & Ireland to the role.
• Esquires Coffee Houses Ireland were awarded the Irish Enterprise Award for 2024 as the ‘Best Modern Organic Coffee Shop Enterprise’.
• Esquires Coffee at Caerphilly were awarded the ‘Best Sustainable Café Chain’ in Gwent at the Welsh Enterprise Awards in 2023.
• Target store numbers for UK & Ireland by FY34 is 305.

Commenting, Cooks Coffee Executive Chairman Keith Jackson said: “We are delighted to report strong sales growth across our existing estate of coffee stores as we continue our expansion programme of new store openings. We have an exciting growth pathway clearly defined and have Aiden Keegan appointed to drive the future development of the business. Aiden is uniquely qualified for the role having spent 14 years as Operations Manager of the Irish business and the last almost six years as CEO of Esquires Coffee UK.”