In 2017 Cafédirect successfully rebranded its total business including new packaging design across the range. The design was very positively received across the trade and helped gain additional listings. In addition Cafédirect launched its 100% Organic, 100% Fairtrade range supplied from its own roastery in London. Sales from the roastery increased as speciality coffee was extended beyond subscription into wholesale and food-service supply.
Sales grew with key partners and customers, such as GLL and The Royal Albert Hall. Internationally Cafédirect continued its successful growth, both expanding existing markets, such as Japan, Czech Republic, and Singapore and opening up new ones. Amongst the new markets opened The United States, Dubai, Canada and Italy all present significant future opportunity.
The Directors and management of the business continued their long term restructuring of the business in 2017 by:
- restructuring the Company’s borrowing facilities from a short term overdraft facility to a £1,300,000, 8 year term loan plus a 5 year stock finance facility for short term seasonal raw material stock purchase requirements, and
- the successful delivery of a £900,000 Rights Issue (£812,000 net of issue costs), which was completed in September 2017, and which will support continued brand investment and growth of the business.
The restructuring of operating costs in the business that commenced in 2016 continued in 2017 resulting in an overall reduction in operating costs of 8% versus the prior year.
The Directors are confident that the corporate financial restructuring; the broadening of Cafédirect’s reach through the acquisition of The London Tea Company; the continued focus on targeted sales and management of the Company’s cost base, will ensure a strong and growing business in the medium term.
The overall loss of the business for 2017 was £328k. This was a significant improvement from the £940k loss in 2016.
The directors are pleased to report that, despite the loss position, £556,094 (2016: £552,400) was invested in the growers and their communities via Fairtrade premiums and the Cafédirect Producers’ Foundation. Supporting the core costs of the Cafédirect Producers’ Foundation has enabled them to continue to deliver programmes with growers funded by third parties and to leverage an increased amount of 3rd party funding for their charitable activities with growers.
Total stock at the year-end was £2.9m (2016: £2.8m); debtors were reduced to £2.0m (£2016 2.3m) and creditors less than 1 year (excluding overdraft) were £1.6m (2016: £1.6m).
The combination of loan restructuring, loss for the year and working capital changes made during the year contributed to a cash balance at the year-end of £919,386 (2016: £89,805).