Cooks Global Foods
Cooks Global Foods

Public Communication

Media Releases

Mojo acquisition expected to lift Cooks’ FY2019 Normalised EBITDA to $2.0 million

Cooks Global Foods’ (NZAX.CGF) says its planned acquisition of Mojo Coffee Cartel will transform the company by enhancing its revenue and earnings, strengthening its presence in New Zealand and accelerating its global growth.

In the accompanying presentation which is to be given to investors and shareholders as part of a capital raising to fund the acquisition, Cooks forecast the combined business will generate sales of $35.2 million in the year to 31 March 2019.

It also expects the combined business to generate EBITDA of $2.0 million. The forecasts compare to proforma[note 2] combined sales in the year to 31 March 2018 of $33.2 million and EBITDA of $1.0 million.

Underpinning the forecasts are the continued expansion of Mojo from 43 stores at the end of March 2018 year to 46 stores by the end of March 2019. Meanwhile, Cooks forecasts its international Esquires Coffee network will grow from 93 to 112 stores by the end of March 2019. On Wednesday, Cooks announced its network had reached 101 stores. Details of all of the key assumptions on which these forecasts are based are included in the presentation.

Cooks Executive Chairman Keith Jackson said: “Our acquisition of Mojo is a game changer for Cooks as its portfolio of stores and its brand are complementary to our Coffee store network and we gain access to two new international markets of Japan and the USA.

“We are particularly excited about the US. It is the world’s largest and most exciting coffee market with store numbers forecast by Allegra to grow from 34,000 outlets in 2017 to 46,000 outlets by 2027[note 3].

“The major growth sector is in the 5th wave of coffee development as identified by Allegra and Mojo is firmly positioned in this space with their high-quality artisan style concept backed up by an advanced set of scientific business practices enabling the group to deliver boutique at scale.

“The acquisition has the potential to generate attractive returns to shareholders and we intend to move to the NZX Main Board Market after the deal is completed. 

“Cooks will be generating positive cashflows, become a significantly larger company and, with a New Zealand retail presence, have greater visibility to New Zealand investors. It is an exciting time for Cooks.”

Cooks entered the conditional agreement to acquire 100% of the shares in Mojo earlier this month. The transaction, which values the Mojo business at $19 million (subject to adjustments for net debt and movements in working capital), is to be paid for through a combination of cash and shares and by Cooks assuming existing Mojo debt.

Following the acquisition, Mojo will retain its brand and all its people with key senior staff, Steve Gianoutsos, the co-founder of Mojo, and executives Katy Ellis and John Holloway joining Cooks’ senior management team while continuing to run the Mojo business.

Notes:
1 Normalised EBITDA has been defined as earnings before interest, tax, depreciation and amortization, impairment of intangible assets, acquisition and capital related costs, share based acquisition payments and net foreign exchange losses and gains. This is a non-GAAP profit measure. A full reconciliation between non-GAAP and GAAP profit measures is provided in the investor presentation.
2 Pro forma financial information has been prepared in order to give shareholders an indication of the trading position (and like for like comparatives) of the combined group as if the acquisition had occurred at the beginning of the FY18 financial year.
3 Allegra 2018 US Coffee Report.

Download the full Investment presentation


For further information:

Media:
Richard Inder
The Project
Tel +64 21 645 64

Investors:
Keith Jackson
Executive Chairman
Tel: +64 9 304 0567 ext. 714

 

About Mojo Coffee Cartel:
Founded as a boutique roastery café in Wellington by Steve and Julie Gianoutsos in 2003, Mojo Coffee is now one of New Zealand’s most experienced independent coffee roasters and café operators. Starting from humble beginnings on Wakefield Street, it has grown to now operate 36 cafes in New Zealand and a café, pantry and roastery in Chicago. It also has 4 licenced stores in Japan and 2 in China. For more information visit: www.mojo.coffee

About Cooks Global Foods:
Cooks Global Foods operates in world markets and is listed on the NZAX market operated by NZX Limited in New Zealand under the code CGF. It owns the intellectual property and master franchising rights to Esquires Coffee Houses worldwide excluding New Zealand and Australia. Cooks currently operates or franchises Esquires Coffee in Canada, the United Kingdom, Ireland, Bahrain, Kuwait, Saudi Arabia, UAE, Indonesia, Portugal, Romania, Pakistan, Jordan, and China. It also owns Scarborough Fair tea, and Grounded Coffee. For more information visit: www.cooksglobalfoods.com

Haiping Niu