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).