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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Cobalt Blue Holdings Limited | TG:COH | Tradegate | Ordinary Share |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.0003 | 0.60% | 0.05 | 0.0471 | 0.0521 | 0.05 | 0.05 | 0.05 | 10,000 | 09:16:38 |
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RNS Number:1819S
Coffeeheaven International PLC
18 November 2003
COFFEEHEAVEN INTERNATIONAL PLC
Interim Results for the Six Months ended 30 September 2003
coffeeheaven international plc (the 'Company' or 'Group'), the operator of
speciality branded coffee/sandwich bars in Poland, is pleased to present its
interim results for the six months ended 30 September 2003.
Highlights
*Turnover (in Polish zlotys) increased 70% over prior year same period
with like-for-like store sales growth up 20% for the six months to 30
September 2003.
*16 stores currently trading with a further 2 stores under construction
and 6 units under contract or agreed terms.
*Stores now trading in 8 major cities in Poland further consolidating
coffeeheaven's market leadership position.
*CHI Polska S.A. ('CHIP'), the Group's trading subsidiary, successfully
completed Series 'A' issue of approx. #2300K of Polish zloty bonds.
*CHIP reported net cash inflows from Poland operations of EBITDA #21,000
(2002: #29,000)
*Development of central European markets outside Poland progressing well.
*The Group loss for the six months to 30 September 2003 after UK costs,
new market development expenses, pre- opening costs and interest on bonds
was #215,000 (2002: #87,000 loss).
*The Company completed purchase and cancellation of #990K of Preference
Shares for #250K.
Richard Worthington, Executive Chairman of the Group, commented:
"The last six months has been a period of steady expansion in Poland following
rapid growth in the prior 12 months. In the current financial year 4 new stores
have been opened, 2 further stores are under construction and CHIP has already
met its target of being represented in 8 of Poland's major cities by 31 March
2004. The 16 stores currently trading have an 'indicative' full-year sales run
rate (in Polish zlotys) of approximately #2.6M.
Elsewhere in central Europe significant progress has been made towards opening
the first coffeeheaven store in the Czech Republic and it is hoped to enter at
least one other central European market in the near term. The Group continues to
actively pursue acquisition opportunities in Poland and elsewhere in central
Europe.
Trading in the first few weeks of the second half year has been in line with our
expectations"
For further information please contact:
Richard Worthington, Tel: +48 606818850 or +44 7973 442331
coffeeheaven international plc
Sandra Hewitt Tel: 020 7689 3116
SHMR PR
Jeremy Porter Tel: 020 7107 8000
Seymour Pierce Limited
Chairman's Statement
I am pleased to present the Interim Statement for coffeeheaven international plc
covering the 6-month trading period to 30 September 2003.
Overview
The period under review has seen continued consolidation of CHIP's market
leadership in Poland's coffee/sandwich bar market together with progress
elsewhere in development of other markets within central Europe.
The focus of activity and specific milestones achieved during the period are as
follows:
*coffeeheaven stores can now be found in 8 key cities throughout Poland.
The cities are Warsaw, Lodz, Wroclaw, Krakow, Szczecin, Poznan, Gdynia and
Gdansk. Further geographic expansion within Poland is planned.
*CHIP continues to maintain its lean operating model. The minimum
operating benchmark (to maintain positive cash flows from operations at CHIP
throughout the growth period) was again met in the six-month period to 30
September 2003 as shown in the financial statements. Overall however, the
financial results for the period have fallen below your Board's
expectations. The reasons for this, many of which were flagged in the
Group's 2003 Annual Report, are detailed below.
*Progress with development of coffeeheaven stores in other central
European markets continues apace particularly in the Czech Republic. Here
the Groups' new trading subsidiary CHI Czech s.ro. ('CHIC') is actively
seeking sites for immediate occupation.
*During the period the Group has focused heavily on acquisition
opportunities both within Poland and in other central European markets. In
some cases these have progressed to the due diligence stage although no
transaction is, as at the date of this report, considered imminent.
Summary of Financial Results
Group turnover for the period (i.e. stores sales in Poland) was #1,014,000
(unaudited) (2002: #596,000), an increase of 70% at constant exchange rates.
Net cash inflows from operations in Poland (EBITDA) were #21,000(unaudited)
(2002: #29,000.) The loss on ordinary activities in Poland was #108,000
(unaudited) (2002: #13,000 loss) and is stated after charging interest expense
(net) on bonds of #65,000 (2002: #6,000 income)
The Group loss, after charging UK administration expenses of #88,000 (2002:
#73,000) and new market development expenses of #19,000 (2002: nil), was
#215,000 (2002: #87,000). UK administration expenses are for the most part
non-trading costs which relate primarily to the cost of maintaining the
Company's public listing on AIM and similar expenses.
On 11 July 2003 the Company completed the purchase and subsequent cancellation
of all 990,000 #1 Preference Shares in the Company for a consideration of
#250,000. The reasons for this transaction were set out in a circular to
shareholders dated 10 July 2003.
Apart from bonds issued by CHIP, the Group's Balance Sheet remains materially
debt free other than trade related debts. Cash balances (including investments
held as current assets) were approximalry #1675K at 30 September 2003. Fixed
interest bonds amounting to approximately #2300K issued by CHIP are repayable at
par in Polish zlotys on 30 June 2008.
I refer below to the weakness of the Polish zloty ('PLN') against some major
currencies. All CHIP revenues are in PLN. However CHIP's property lease rentals
are expressed in terms of US dollars ('USD'), Euro ('EUR') and PLN. Thus the
exchange rates between the USD/EUR and the PLN are materially significant for
CHIP.
To date weakening of the USD and strengthening of the EUR against the PLN has
resulted in a broadly neutral profit impact for CHIP. Although CHIP has fully
hedged its USD rental exposure at favourable rates through to 31 March 2004,
CHIP has not at the date of this report hedged its EUR position. Accordingly a
significant further strengthening of the EUR against the PLN could negatively
impact the second half results.
The Group's currency risk exposure in other areas of cost is not, at the date of
this report, considered significant.
Operational Review
CHIP has had mixed success in meeting its operating goals during the period.
There are a number of unconnected reasons for this as set out below.
Like many parts of Europe, Poland experienced exceptional warm weather during
the spring and summer of 2003. This had the effect of reducing consumer traffic
in shopping malls where most of CHIP's stores are currently located. As a
result, like- for- like sales growth at these stores has been marginally below
expectations. In marked contrast CHIP's two stores with outside seating (in
Warsaw and Gdynia) produced outstanding sales and turned in an impressive 28%
growth in like- for- like sales.
During the period under review CHIP also took the opportunity to refit two of
its older and best performing stores. This resulted in lost sales during the
refitting periods.
Despite the above and a number of other short term negative trading factors
unique to specific stores, combined sales showed a solid 20% like- for- like
sales growth. However, for the reasons set out above, this was marginally lower
than your Board's expectations
A considerable shortfall in expected current year sales also arose from new
store openings. As flagged in the Company's 2003 Annual Report, a lack of sites
immediately available on commercially acceptable terms has meant that several
new store openings planned for the period did not materialise and those that did
have, in the main, opened later than expected.
In addition, CHIP has had mixed success with trading results from new stores
opening outside Warsaw. Whilst some have performed above expectations others are
taking longer to build sales. Both these factors have had a negative impact on
the financial results for the period.
Two further factors have also impacted the financial results.
First, it is only now that CHIP has been able to move to central distribution of
supplies, an essential step in the development of a national chain. This is has
been due to the relatively 'early stage' development of such services in Poland
exacerbated by the recent market withdrawal of a potential service supplier.
Accordingly reaching the goal of central distribution has been a considerable
challenge resulting in cost increases that will gradually be recovered as the
number of CHIP stores grows.
Second, during the period under review CHIP introduced many new food lines. At
launch these were aggressively price promoted as a part of CHIP's strategy to
develop high levels of consumer recognition as a provider of innovative
affordable food products. Short term this negatively impacted margins but has
proved a success with customers as reflected through increased volumes. It is
expected that food margins will improve significantly in the second six months
of the current financial year.
Recently CHIP signed an exclusive agreement with Hewlett Packard ('HP') for
coffee bars in Poland for the provision of in-store WiFi services. This will
enable coffeeheaven's customers to access the Internet from their laptop
computers on a 'wireless' basis whilst in coffeeheaven's stores. We believe this
is an important added value service for our customers and are delighted that
world class company HP has chosen coffeeheaven to be its partner for this
pioneering venture in Poland.
Market - Poland
Poland's 2003 second quarter GDP grew at an annual rate of 3.8% up from 2.2% in
the first quarter. After three years of almost flat GDP growth, Poland appears
to be entering a period of sustained economic recovery. The government target of
3.2% 2003 GDP growth is generally expected to be met and predictions of 5% 2004
GDP growth are considered by commentators as feasible.
This positive development is currently overshadowed by the perceived inability
of Poland's Government to address a ballooning national budget deficit. This is
being seen as the explanation for a recent significant weakening of the Polish
zloty exchange rate against the Euro and Pound Sterling. Although such Polish
zloty weakness may be short term the foreign exchange implications for CHIP are
outlined above in the financial section of this report. Longer term, the outlook
for Poland's economy as a member of the European Union remains positive.
Predictions of significant economic growth in 2004 together with imminent EU
membership are, your Board believes, positive factors for the development of
coffeeheaven's business in Poland.
Outlook
CHIP remains broadly on course to achieve the target of 50 stores in Poland by
the end of 2006.
Trading in the first few weeks of the second half has been in line with your
Board's expectations and the anticipated improvement in Poland's economy should
be a significant plus for coffeeheaven's business.
In many other parts of central Europe, the opportunities for the successful
development of coffeeheaven have, in your Board's view, never been greater and
we are pressing ahead to open new markets as rapidly as resources allow.
Your Board and our dedicated management teams in central Europe, look forward to
capitalising on these opportunities with enthusiasm and confidence.
Richard D. Worthington
Executive Chairman
18 November 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Unaudited six Unaudited year
months ended 30 ended 31 March
September
2003 2002 2003
Notes #'000 #'000 #'000
Turnover
Stores - Poland 1,014 596 1,490
Materials and all store
operating expenses excluding
depreciation - Poland (806) (436) (1,124)
--------- -------- --------
Net cash inflows from store
operations - Poland 208 160 366
Administrative costs
excluding depreciation and
interest - Poland (174) (129) (263)
Store preopening costs - (13) (2) (12)
Poland
Net cash inflows from
operations - Poland (EBITDA) 21 29 91
Depreciation store and other
assets - Poland (91) (50) (125)
Foreign exchange gains,
taxation and other
adjustments - Poland 3 27 1 63
--------- -------- --------
Interest receivable/(payable)
- Poland (65) 6 8
--------- -------- --------
Loss on ordinary activities
before taxation - Poland (108) (13) 37
--------- -------- --------
add: Corporate administration
expenses - UK (88) (73) (158)
New market development
expenses - UK (19) - -
--------- -------- --------
Group loss for the financial
period (215) (87) (121)
--------- -------- --------
Loss per share 4
- Basic (0.09)p (0.04)p (0.06)p
- Fully diluted (0.09)p (0.04)p (0.06)p
--------- -------- --------
CONSOLIDATED BALANCE SHEET
Unaudited as at Audited
30 September 31 March
2003 2002 2003
#'000 #'000
Fixed assets
- Intangible assets 7 - -
- Tangible assets 1,112 648 907
- Investments 8 - -
--------- ------- -------
1,127 648 907
Current assets
- Stocks 64 36 38
- Debtors 371 240 297
- Investments held as current assets 213 - -
- Cash at bank and in hand 1,462 356 34
------- ------- -------
2,110 632 369
Creditors: amounts falling due within one
year (118) (181) (240)
Net current assets 1,992 451 129
-------- ------- -------
Total assets less current liabilities 3,119 1,099 1,036
Creditors: amounts falling due after one
year (2,148) - -
-------- ------- -------
Net assets 971 1,099 1,036
-------- ------- -------
Capital and reserves
- Called up share capital 271 1,194 1,209
- Share premium 1,110 708 760
- Capital redemption reserve 740 - -
- Profit and loss account (1,150) (803) (933)
------- ------- -------
Shareholders' funds 971 1,099 1,036
-------- ------- -------
Attributable to equity shareholders 971 109 46
Attributable to non-equity shareholders - 990 990
-------- ------- -------
CONSOLIDATED CASH FLOW STATEMENT
Unaudited six months ended Unaudited
30 September period ended 31
March
2003 2002 2003
#'000 #'000
EBITDA - Poland 21 29 91
Corporate administration
expenses - UK (88) (73) (158)
Working capital and other
adjustments (144) 14 (36)
-------- -------- --------
Net cash outflow from
operating activities (211) (27) (103)
Returns on investments and
servicing of finance (41) 8 9
Capital expenditure (363) (206) (570)
-------- -------- --------
(615) (225) (664)
Payments to acquire short
term investments (213) - -
Financing 2,300 381 454
-------- -------- --------
Increase in cash 1,472 156 (210)
-------- -------- --------
Reconciliation of net cash
flow to movement in net
funds
Increase in cash in the 1,472 156 (210)
period
Increase in debt finance in (2,148) - -
the period
Increase in short term 213 - -
investments
-------- -------- --------
Change in net funds (463) 156 (210)
Net (debt)/funds at start of (10) 200 200
period
-------- -------- --------
Net (debt)/funds at end of (473) 356 (10)
period -------- -------- --------
Notes
1. Publication of Non-Statutory Accounts
The financial information contained in this interim statement does
not constitute accounts as defined by section 240 of the Companies
Act 1985. The financial information for the preceding period has not
been audited or reviewed by the company's Auditors and is based on
the statutory accounts for the period ended 31 March 2003. Those
accounts, upon which the Auditors issued an unqualified opinion,
have been delivered to the Registrar of Companies.
2. Basis of Preparation of Interim Financial Information
The interim financial information has been prepared on the basis of
the accounting policies set out in the Group's statutory accounts
for the year ended 31 March 2003. For comparative purposes, the
profit and loss accounts of CHI Polska S.A. for all periods have
been translated using the exchange rate at 31 March 2003 which was
6.3908 PLN = #1. The rate in force at 30 September 2003 was 6.6271
PLN = #1. Had this rate been used to translate the profit and loss
accounts of CHI Polska S.A for the half year ended 30 September 2003
the Directors estimate that the effect would be to reduce Group
turnover by approximately #36,000 and reduce the Group loss by
approximately #5,000. The balance sheet and cash flow statement for
the comparative half year ended 30 September 2002 have not been
re-stated and are translated at the rate in force at 31 March 2002
which was 5.8897 PLN = #1.
3 Taxation
The Directors believe that tax losses available will result in no
tax charge for the period.
4 Loss per share
The calculation of loss per share is based on the profit after tax
for the financial period divided by the weighted average number of
ordinary shares in issue during the period. The weighted average
number of ordinary shares in issue for the periods reported were as
follows:
Unaudited six months Audited
period
ended 30 September ended 31
March
2003 2002 2003
Basic:
Weighted average number of
ordinary shares in issue 256,840,282 193,792,793 151,126,127
Fully diluted:
Weighted average number of
ordinary shares in issue 256,840,282 193,792,793 151,126,127
5 Availability of Interim Report
Copies of these results will be available from the Company's
registered office at 3 Horsted Square, Bellbrook Business Park,
Uckfield, East Sussex TN22 1QG, United Kingdom for at least one
month from publication. Additionally the Company has posted the
interim report on its website, www.coffeeheaven.eu.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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