A busy day in the Warsaw Underground !

Not just another coffee shop chain - this one is a brand leader and is only trading in Eastern/Central Europe (i.e. the countries recently admitted to the EU destined for substantial business growth). The company is creating new outlets at a fair old pace and take a look at their website - these are quality stores in high-profile locations like major airports, railway stations etc. Website: http://www.coffeeheaven.eu.com

APRIL 2006 TRADING UPDATE!!! Total Gross Revenues for 12 months to 31st March up 66% to £6.3M (2005: £3.8M) Lots more info. on new markets and stores click here to read the full details. Stores: 43 (up from 32) stores currently trading (Poland: 30 (up from 23), Czech Republic: 6 (Up from 2), Latvia: 7 with a further 5 units under construction including Bulgaria and sites secured in Romania (subject contract). Bulgaria & Romania are seeking to join the EU from January 2007. Sites located in key high street, shopping malls or Airport locations. Company growth target: increase number of units by at least 20 units to some 63 units by 31 March 2007. Aim being to achieve this level of growth within present Cash resources.Cash balances at 31 March 2006 were approximately £2.9M (2005: £0.7M). Debt was nil (2005: £ 2.5M): Nil Debt! Positive EBITDA: For the year ending 31 March 2006, Group EBITDA expected to be firmly positive after charging UK and new market development costs but before exceptional costs relating to the cancellation of bonds (previous Debt). Forecasts: Based on present trading conditions and current exchange rates we anticipate indicative sales of £9.3M for the year to 31 March 2007. This includes indicative sales of £0.4M from Bulgaria, which will be reported but not consolidated. From Richard Worthington (Chairman and Chief Executive): ‘The new financial year has started well. There is no doubt that the significant economic improvement in our markets is feeding through to consumer confidence and spending. The strength of the coffeeheaven brand ensures we are ideally positioned to benefit from our customers' increasing prosperity.’

Cheers overgrowth - makes great reading!

Looks ready for a strong breakout when we get the trading update later this month - MM`s know this and want cheap stock IMO.

no large trades but all buys today. Price ticking up slightly now

When the update arrives COH will be pushing towards 2p IMO

Forecast on iii says target price of 2.5p, just topped up...

Ticking up but only by virtue of the MMs widening the spread to 11%! The bid has remained unchanged at 1.15p

my broker has upped the quote provided to buy to 1.29 from 1.19 this morning, that has to be a good sign.

Yes, but would you buy with an 11.5% spread (as it stands now)? The effect is to slow buying down as the immediate risk becomes much higher. We really need to see the bid come up along with the offer so that we could potentially realise some of the gain.

Doug

Doug, true, a good point, but i'm confident. 11% is too large and shouldn't stay too long.

Cheers

SN

Much better now :-)

A very good day already, wish I had more spare funds this morning

Go the COH - 1.30p!

A good day today folks - it looks as though Coffeeheaven are starting to be recognised as a company destined to offer superior medium and long term growth.

Yes the broker comment helped, shares should be at .25p according to the brokers note I saw on Ample, topped up today...

AdieH - 2.5p I think you mean lol!

A bit of profit taking after reaching new highs - trading statement is expected during this month and expected to be good - plenty more upside to come :-)

Trading statement released today:

http://www.uk-wire.com/cgi-bin/articles/200502100700104297I.html

I interpret the "comfortable" in the expectations statement to be Richard Worthington keeping a bit up his sleeve for later in the year - maybe a later "better than expected" statement to come later in the year IMO - especially if the currency advantages remain good.

All the rest of the statement is very positive long term - COH will be a great investment IMO.

Here is a punters ensorsement of the Coffeeheaven experience :

http://www.cracow-life.com/krakow/where_to_drink/pubs_cafes_details/711-coffeeheaven

And another review:

"Comment:
This is a part of a British brand and company. Starbucks-like network of coffee shops located in main cities of Poland. Excellent quality and service, deep understanding of coffee, well organized. San Marzocco espresso machines and well-educated staff. But these paper and plastic cups?... brrr... ;-) I prefer Italian coffee bars in this case. Their home page: http://www.coffeeheaven.eu.com/home.html They do not have a competition in Poland. Coffee Heaven is the first coffee university for many young Poles. Everything slowly is changing. There are more and more places where it is possible to have a cup of the perfect espresso... But forget Lavazza, Segafredo, Mokarabia, Alfredo, Tchibo, Darboven, Davidoff etc. -- this is usually an awful experience in Poland.

Rating:
Perfect!
andrzey, 2004-07-28"

Have just digested the trading statement - there's lots of very promising info. in there.

I think the key statement is this one:

"New Markets

The rapid pace of development in Central Europe fuelled by robust economies in many of our target markets makes it important to maintain our pace of new market entry. This is essential if coffeeheaven is to meet its goal of becoming a sector market leader across the entire Central European region.

To achieve this with available resources, we are negotiating the initial entry into some new markets under joint venture arrangements with locally established synergetic businesses. We believe such arrangements will enable us to achieve greater market presence more rapidly and at a lower entry cost than would be the case with independent entry. In all such arrangements the company will secure options to acquire 100% ownership and will retain full control over branding."

What does this mean ?

Several things:

1) COH aim to become THE major coffeshop brand in Central Europe.

2) They have come up with a truly ingenious scheme to ensure that they can open new outlets at a very rapid pace WITHOUT having to go back to the market and tap shareholder's pockets for more cash. This is well thought out and will not compromise Coffeeheaven's brand identity and still give them full ownership of the new stores. Richard Worthington not only thinks about his business 24/7, but his shareholders too! which is really good news.

3) We have confirmation that the markets they are operating in have robust economies with the spin off benefit that local folks out travelling or shopping with cash to spare will regularly call in for a coffee at Coffeeheaven. Also robust economies attract business travellers who need refreshment whilst waiting for planes/trains etc.

With the addition that their previously "indicative" sales target of 3.6M for CHIP (Coffeeheaven in Poland) will be achieved for 2005 (compared to 2004 which was 2.1M) - we're looking at solid growth which is destined to continue (and increase year on year) for a few years yet.