Coffee Republic reports a drop in losses

Coffee Republic today revealed that it trimmed its losses in the six months to September despite a fall in turnover due to a switch to franchising.

The company, which yesterday announced a contract with Cineworld, saw losses in the half year to 23 September 2007 trimmed by £362,000 to £895,000 (2006: £1.26m).

Turnover was £2.9m compared with £5.4m a year ago due to its switch to franchising, which provides a fee but removes revenue from actual bar sales from the company's balance sheet at converted stores.

Like-for-like sales, which strip out new openings, were 4.2% up.

Administrative expenses jumped by almost half (46%) as Coffee Republic took the decision to beef up its backroom team to meet the high demand for franchising information.

It now has 82 co-managed locations in the UK compared with 43 at the end of March and four international sites.

A total of 19 regional development franchises have been signed and eight international master franchises are in place.

Peter Breach, chairman, said: "After just over a year as chairman I am pleased to announce the strategy adopted by the board over the last year has resulted in a marked improvement in the operational and financial performance although there is still much work to do."

Coffee Republic also announced the appointment of James Cameron Muirhead, formerly of Tiger Tiger owner Novus Leisure and health club operator Esporta, as finance director.

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By Chris Druce