Costa Coffee posts £9.6m loss

Costa Coffee fell to a loss last year despite revenue rising by over £100m, filings show.

 

The chain, which operates around 2,600 cafes in the UK and Northern Ireland and more than 3,900 sites worldwide, reported a pre-tax loss of £9.6m in 2023.

 

It marks a major drop on the £245,950 profit Costa posted in 2022.

 

The Coca Cola-owned company saw its revenue rise from £1.11b in 2022 to £1.22b in 2023.

 

But Costa said inflationary pressures, including rising energy costs and staff wages, had contributed to the loss. 

 

Dividend income from Costa’s own subsidiaries dropped from £245m in 2022 to just £1m in 2023.

 

Despite this, the company paid an £85m dividend to European Refreshments Unlimited Company, the Irish subsidiary of Coca Cola, in February 2023.

 

The same month Costa sold its 142 Polish and Latvian stores to Lagardère Travel Retail, the master franchisee in the region.

 

A further dividend of £80m was paid to European Refreshments Limited in April this year.

 

Writing in its accounts, finance director Jane Carlin said: “The company continued to invest in new retail stores, renewing existing sites and proposition development.

 

“The growth in revenue, year on year, generated incremental gross margins; however, inflationary pressures on the cost of goods, including energy and payroll, and the impairment of the company’s investments in two of its subsidiaries resulted in an operating loss for the year.”

 

Costa Coffee was founded by Italian brothers Sergio and Bruno Costa in 1971.

 

It was acquired by Whitbread in 1995, which sold the business to Coca Cola for £3.9b in 2019.