Cooks Global Food on fast track to extend coffee house network
Cooks Global Food, which owns the master franchise rights for the Esquires Coffee chain outside New Zealand and Australia, says it's on track to boost its coffee house network by more than 40 percent by the end of the 2018 financial year.
The Auckland-based company missed the 100 store milestone it had set for March 31 due to "construction delays and store closures being ahead of target", but anticipates it will have 140 stores by the end of the following year, it said in a statement. Cooks increased its store footprint to 98 as at March 31 from 86 a year earlier.
"The delayed stores will open shortly, while Cooks has a strong pipeline of planned new store openings around the world," executive chairman Keith Jackson said in a quarterly update to shareholders.
Last week Cooks said it expected to break even on a cashflow basis in the 2018 financial year if a new joint venture with its Chinese partners comes off, accelerating the expansion of coffee operations in the world's second-biggest economy.
Today, it said the group's performance was held back by a "challenging trading environment" in the Middle East where low oil prices weigh on consumer spending and disposable incomes, particularly in the United Arab Emirates.
"Cooks believes the Esquires businesses in the Middle East have significant potential to improve as the regional store network completes its transition to the new brand standard and new stores and territories are added," it said. "We are in talks with our regional partners to revitalise growth. We are pleased with the progress of these discussions and will update the market as appropriate."
Esquires network sales - which Cooks uses as an indicator for its own revenue - rose 13 percent to $39.5 million, or a more sedate 0.6 percent on a same-store basis, in the year to March 31. However, the final quarter saw network sales accelerate, up 16 percent and 2 percent on a same-store basis.
Cooks' NZAX-listed shares were unchanged at 7 cents, having shed 22 percent so far this year.