Caffé Nero sniffs out 26 Aroma purchases
Coffee bar operator Caffé Nero has struck a deal to buy 26 Aroma coffee shops from McDonald's.
Caffé Nero would not disclose what it was to pay for the Aroma sites but said it expected to complete the purchase in March. The new additions will increase its chain to 107 shops. However, Caffé Nero will not be using the Aroma name. McDonald's still has 10 Aroma shops.
Jeremy Simmons, director of restaurant and leisure property consultant Berkeley Simmons Davis, valued the deal at about £2m. He said that he would be amazed if Caffé Nero paid more than £120,000 for each of the Aromas it bought.
Nero ended the six months to 30 November 2001 with £3.8m cash to fund its expansion plans.
During the period, turnover increased by 68% to £11.3m, compared with £6.7m in 2000. The group recorded a pre-tax loss of £760,000, a 12% improvement on 2000's pre-tax loss of £868,000.
Gerry Ford, chairman and chief executive, said: "The acquisition of the Aroma sites accelerates our expansion considerably. With increased scale, a greater percentage of revenue will now flow through to the profit line."
He added: "The group witnessed a significant drop in tourism, in London in particular, as a result of the foot-and-mouth epidemic and the events of 11 September.
"This, combined with the deterioration of the economic climate generally, meant that the consumer environment was tougher to trade in than previously experienced."
Trading in December and January had remained solid, said Ford, who added that Caffé Nero was confident there were "substantial growth prospects" for the coffee bar industry and that it was "uniquely well placed to be a leader in this development".
