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.’

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.

Thanks to qfh from the other board, hope he doesn't mind. All looking good waiting is the key here. Sucked that 250k buy in then dropped the price. doh!

courtesy of Google alerts

Coffeeheaven grows on wave of rising prosperity

16/02/2005 - Strong sales growth at a young, up-market coffee and sandwich chain in Poland, Latvia and the Czech Republic reveals opportunities for suppliers and retailers as rising economic prosperity points to a growing eastern European Starbucks generation, writes Chris Mercer.

Coffeeheaven International, formed in August 2000 by UK firm Bakery Services but independent since November 2001, said its Polish revenues were up 48 per cent to 4.1 million for the nine months to the end of 2004.
The results are another sign that Coffeeheaven is on the right track in eastern Europe after the firm announced its first ever positive EBITDA (71,000) for the first half of 2004.

The company has taken a hit on net profits, sitting 286,000 in the red after last years first half, in order to expand aggressively and plans to have 39 stores open, including 29 in Poland, three in the Czech Republic and seven in Latvia, by the end of March. Another 50 caf are expected in Poland by the end of 2006 with 18 in the Czech Republic a year later.

Longer term Coffeeheaven will benefit from its prime positioning in almost every major shopping complex in the Polish capital, said the firm, which believes its cafchain will do well from the increasing affluence of Polands city workers.

And Coffeeheavens promising sales suggest there is increasing potential for Starbucks-style cafchains across eastern European, growing out of rising disposable incomes alongside a budding consumer culture and general westernisation.

EU investment funding has benefited economic growth in the region. Polands GDP is expected to have risen by six per cent in 2004 with five per cent forecast in 2005, and the Czech Republic and Latvia estimated to have grown by three and six per cent respectively in the last year.

A recent report by market researchers Euromonitor identified the popularity of western lifestyles as a key trend among Polish consumers, providing a good route in for the kind of high street coffee house concept found in Britain and North America.

Many eastern European countries, including Poland, Czech Republic and Russia, also already have a coffee drinking culture to build on, although an established cafmarket in France has actually worked against Starbucks progress there for the time being.

Starbucks announced last October its long-term intention to have 15,000 non-US stores, compared to around 1,500 now. The company said it was especially interested in eastern Europe and that it was actively exploring possibilities in Russia. Fast-food chain McDonalds recently told Cee-FoodIndustry.com that its McCafconcept performed particularly well in Russia during 2004.

The 10 new EU members currently account for around 10 per cent of total EU imports and have seen their imports of coffee increase by almost 28 per cent since 1997, according to the International Coffee Organisation.

Coffeeheaven executive chairman, Richard Worthington, admitted that success would not come over night in eastern Europe. Results from our new stores outside Warsaw are mixed. Some are performing to plan, some are not and patience is required as we remain focused on brand building and consumer education, he said.

Despite Polands economic up-turn, its unemployment rate remained the EUs highest at the end of 2004, hovering above 18 per cent. The countrys modern retail space per capita was also less than half the average of that in the old 15 member states, though Warsaw did open Central Europes largest retail shopping complex, spanning 110,000 sq metres, last autumn.

Even so, Worthington said Coffeeheaven would expand as quickly as resources allowed to gain a good strategic position across eastern Europe. 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, he said.

Middle/Eastern Europe is definitely where I want to be, currently, in a growing economy fed by the established West who de facto can no longer grow so fast (if at all!). Who needs a Stock Market Index when you can have a coffee shop? How did the Stock Excahnge and Lloyds of London start - as coffee shops in 17th (?) century London. A coffee shop is the market - literally, look at the demographic range of customers.

Working near Oxford Circus, I am surrounded by every prime site occupied by Nero, 'bucks, Pret, etc. Consider the gross profit after grounds, hot water and milk-trapped air in a cup of coffee - astronomic, yet we all happily pay 1.50 a cup. It's within reach of every pocket and is part of life.

I love Richard Worthington's acknowledgement of the need for "consumer education". I would estimate the majority of life's essentials were considered unnecessary when first invented.

A cup of coffee makes a statement which everyone can aspire to - just like a penny (literally) share.

"Let's have another cup of coffee,
Let's have another pieve of pie!"

SD

Answer me this all you wide-eyed caffeine freaks.

Why does Comdirect watchlist always mark this share's (and many others) bid price down after close of trading to e.g. 1.05, whereas Digital Look and other sites leave it at the 1.15 level it actually closed at? Is this a site specific glitch, or a true reflection of MMs' overnight caution?

Mind you SelfTrade shows your portfolio at the mid-price between closing and opening next day. Makes you look VERY clever over the first large coup de rouge of the day.

Just one of the many mysteries of life. All biscuits gratefully received.

SD

I'm with selftrade and their daily change figures are always wrong, sometimes i'm 300 up, then 300 down, but with the same total value. Very odd, not major, but annoying. You have this problem SD?

Ye, Snaylor - Selftrade have some pluses, their news organisation and company fudamentals, broker forecasts, charts are OK.

Very annoying you can't get instant credit to your trading account with an on-line transaction (you can even at midnight with Comdirect, au contraire) - you have to phone them to get instant credit. How inefficient is that for all concerned - two people's time, cost of a phone call (do they make money on this? I wonder), delay in the punter being able to pay over another 12,.50 trading fee, worst of all missed prices - mad!

The pricing from 4.30pm onwards is bizarre - generally mid price, often shows a backwardation (offer lower than bid!) during the day its pretty accurate in my experiance, except thta day you buy a stock shows the days variance from yesterday's closing price or something weird.

However, too much inertia to change wholesale ot Comdirect wshere I also have an account - love their Watchlists and the way you can get all RNS and other news items headlines at the press of one button for the whole list - it's my first port of call every morning (sorry guys even before MoneyAM bb's).

Any answers to my otehr question about why Comdirect show a marked down bid price at/after closing each day on many stocks?

TIme for my first cup of coffee - ah! heaven.

SD

Any comment on today's drop? The MMs have opened the spread up to a huge level.

There was a large trade of 500,000 at 15.09 at 1.10p marked as a buy - should have been a sell IMO.

This might have caused the MM's to drop the bid for the rest of the day to put off any other like minded vacillators (no dear, vacillator!) Also the MM's regularly drop 0.1p off the bid at close of play (for overnight protection?) and put it back on the next morning - see my previous post 127.

Can't find any fundamental reason otherwise. Being such a low SP, there is a de minimus movement in price which always exagerates its own importance.

So this evening relax, for tomorrow we panic!

SD

Well, they put it back up and a bit more today so no panic :-)

Good solid buying this morning, panic well over.