Cook Global Foods Releases its Preliminary Results for the year ended 31 March 2017
Cook Global Foods Releases its Preliminary Results for the year ended 31 March 2017 today, for the full report, please visit NZX.
Cooks Global Foods (NZX:CGF) today reports narrowing operating losses in its core Esquires Coffee operations as it benefits from strong growth in sales across its global coffee store network. The company also reports it remains on track to transition to cashflow breakeven in its continuing businesses in the current financial year.
Group net losses from continuing operations for the year to 31 March 2017 narrowed by 20.8% to $3.5 million from $4.5 million a year earlier, with both Ireland and the Middle East3 making a positive contribution and the UK segment significantly reducing its losses.
The improved earnings reflect a 13.1% rise in constant currency sales across the Esquires Coffee store network to $39.4 million in the 2017 financial year. These gains however were offset by a strong rise in the New Zealand dollar against sterling in particular, and to a lesser extent, the euro. Meanwhile, the prior financial year also benefited from master franchise fees in Egypt and Jordan.
As a result, revenue from continuing operations for the year fell 13.2% to $5.3 million down from the prior year’s $6.2 million. Almost all this fall was attributable to negative unrealised exchange movement in reporting trading revenue figures from the UK and Ireland businesses in the group’s base currency.
Group net losses rose 53.7% to $12.2 million from $7.9 million a year earlier, principally reflecting well-signalled non-cash write downs totalling $4.5 million.
Ahead of its expected sale into a new Chinese joint venture, Cooks wrote down the value of its Chinese coffee store operations by $4 million. It also wrote down the carrying value of the Progressive Processors supply business by $450,000 following its sale to management. Both divisions are now treated as discontinued operations.
1 Cooks Chinese coffee operations and its Progressive Processors supply business are now treated as discontinued operations. This follows the sale of the assets to Progressive effective 13 April 2017 and the impending formation of a joint venture with Chinese partners to accelerate the growth of the company’s branded coffee operations in greater China.
2 Constant figures referenced in this release are adjusted for currency fluctuations using moving average exchange rate for the 12 months to 31 March 2017.
3 The Middle East represents the largest contributor (excluding intercompany transactions with the UK and Ireland) to the Global Franchising and Design segment, which also includes operations in Canada and Indonesia and in total made an operating profit for the year.