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Cafédirect

Financial Performance

12 months to 31/12/2018

The company’s turnover for the year ended 31 December 2018 was £13.1m, which was a 1.9% increase compared with 2017. Cafédirect achieved strong growth in the Grocery Retail sector, increasing sales by 7.2% versus the prior year, and with improved focus on e-Commerce delivering revenues 22.5% higher than 2017. Smaller convenience store sales also saw growth of 18%, completing a very positive picture for Cafédirect’s domestic core retail business overall.

Growth in the UK retail sector accelerated in particular in the second half of the year, with an increase in market share of 12% compared with 2017 developing further to 17% by the last quarter. This has been the result of the successful rebranding of packaging design and improved engagement with the key accounts.

Offsetting these successes, Cafédirect experienced a challenging year in its UK Foodservice and International divisions, declining by 10.1% and 7.8% respectively.

Strategic report

Cafédirect earned a profit in 2018 of £218k (2017: £343k loss). This is the first year that the Company has delivered a surplus since 2009 and demonstrates a notable trajectory in profit improvement from a low point for the business in 2015 where it recorded trading losses of £1.2m.

With its working capital position secured following the financial restructuring of the business, and a rights issue in 2017, then bringing about a high level of focus around cost and sales effort, configuring the business to deliver scalable and profitable growth,

Realising that it is important to deliver real meaning behind its claims, Cafédirect continues to support the lives and wellbeing of producer growers, through Fairtrade premiums and via donations to its farmer led charitable organisation - Producers Direct; significant sums that deliver real impact. It has also celebrated some very important wins in 2018, achieving B Corporation certification in June 2018 – the first UK coffee company to do so, and then going on to be named as UK Social Enterprise of the Year at the UK Social Enterprise Awards in November. Cafédirect also won the International Impact Award at the same event.

Looking ahead to 2019, Cafédirect has plans in place to build on its achievements in 2018, with projects to lead the way on important matters like employee wellbeing, recognising that people in developed countries are experiencing an epidemic of mental issues relating to their work and personal lives, but also to do even more to improve the lives and enhance the rights of smallholder farmers that are so important to society.

The Directors are confident that Cafédirect’s pioneering history will be preserved and show renewal in its ability to be successful and show true leadership in delivering social change.

During 2018 £781,968 (2017: £771,068) was invested in the growers and their communities via Fairtrade premiums, Organic Premiums and its charitable foundation - Producers Direct. Supporting the core costs of Producers Direct 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. Cafédirect’s return to profitability has led to a shared hope of doing more to support smallholder farmers with longer term, and more ambitious projects being discussed to improve the company’s impact.

Total stock at the year-end was £3.0m (2017: £2.9m); debtors were £2.0m (£2017 £2.0m) and creditors less than 1 year (excluding overdraft) were £1.1m (2017: £1.6m).

Working capital management is tenacious and closely monitored with cash balances at year close of £466k (2017: £919k) reflecting an increase in stock and reduction of amounts owed to creditors – consistent with its principles of social responsibility, Cafédirect is in a position to ensure that liabilities are paid on time.

The company year-end balance sheet showed net assets of £3.4m (2017: £3.2m).

Key performance indicators

The company’s key financial performance indicators, which are closely monitored throughout the year and measured against pre-set targets, include:

  • Sales values, analysed by product group and key sectors such as UK retail, UK out-of-home and international;
  • Gross profit, both in absolute terms and as a percentage of sales;
  • The level of administration expenses, looking at the ongoing UK business separately from other costs;
  • Operating profit and profit before tax;
  • The level of working capital employed, both in absolute terms and as a percentage of sales; and
  • Cash generated by the business.

In addition, the company has a number of other key performance indicators, with the company’s performance against these indicators sometimes being called the company’s “social return”. These include:

  • The amounts paid by Cafédirect for its coffee, tea and cocoa raw materials over and above market prices. These amounts include, but are not necessarily restricted to Fairtrade premiums;
  • The amount donated to Cafédirect Producers’ Foundation; and
  • The volume of coffee, tea and cocoa raw materials purchased from growers.

Revenue and net profit

These graphs give you a snapshot of how the business has performed over the last five years. Revenue, which is sometimes also called turnover, shows you how much money the business has brought in every year for the last five years. The net profit shows you how much of that money ended up as profit after all of the costs of running the business, and after tax. Read more

Profit and loss summary and profitability indicators

The Profit and Loss summary and profitability indicator tables show how profitable the business has been over the last year. Read more

Profit and loss summary
Revenue £13,107,670
Gross Profit £2,749,230
Administrative costs (£2,504,158)
Profit before Tax £170,901
Net profit for the year £217,793
Corporation Tax Paid -

Balance sheet summary and solvency indicators

The balance sheet of a business gives you a picture of everything the business has, including all the cash, and what it has done with it. Read more

Solvency indicators are designed to show you the most important factors affecting the amount of cash the business has available. Ethex shows different indicators according to whether the business is a trading business, (buying and selling goods), or a financial business, (taking money and lending or investing it on). Read more

Balance sheet summary
Total assets £5,452,260
Total liabilities £1,250,853
Net equity £3,435,510
Profit and loss account -£3,598,023

Returns and value

The returns indicators show you how much return the business is making from all the money it has. A higher return means a more profitable business and more money for the shareholders. Read more

The share and asset value indicators are designed to help you understand better what the shares of the business might be worth. Read more

Returns indicators Share and asset value
Most recent dividend 0 pence View last traded price          Read more

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