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Coffee Heaven - A heavenly share for penny punters ? (COH)     

overgrowth - 06 Oct 2003 22:47

underground01_2.jpgA 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.’

Chart.aspx?Provider=Intra&Code=COH&Size=Chart.aspx?Provider=EODIntra&Code=COH&Si

overgrowth - 16 Jun 2005 16:31 - 200 of 2037

lol!

stockdog - 16 Jun 2005 16:48 - 201 of 2037

On reflection, can only assume the MMs are trying a bit of a tree-shake to frightend off some loose stockholders and get more into the market. It is only the offer tha's reduced, the bid stays the same, so maybe they just want to tempt in some buyers.

Tomorrow is another day.

sd

richie1saunders - 26 Jun 2005 17:46 - 202 of 2037

Interesting article in the Times on Saturday discussing the recent flood of investment into Eastern Europe. Having read it I then pondered the fact that I had just been persuaded to part with 3 in CFN for a coffee and a chocolate brownie. Let us hope COH can do a CFN!!

overgrowth - 27 Jun 2005 08:14 - 203 of 2037

Richie - that "flood of investment" will bring with it more coffee drinking punters from other countries visiting on business and will also help boost the economy of the countries concerned which suggests that the natives will have more disposable income to spend on coffee as they go about their daily business or leisure activities.

I think it is the disposable income aspect that is currently the only thing which is holding back the rapid growth of the coffee shop culture in these countries.

A few more punters and the tills will be ringing nicely for COH, any evidence of rapid growth in profits and this will take off, until then it's a bit of a waiting game.

AdieH - 27 Jun 2005 09:24 - 204 of 2037

Good poster on ample saying that he had recieved a reply from Mr Worthington (CEO) of COH regarding funding/profit/future. Basically they are set up to enter Ukraine but because of certain issues (can only guess political stability) they are holding back at present.

Could not confirm how the company would be funded (in detail), basically it depends on the growth of the company.

Profit is tied in with the growth of the company, Richard stipulated that all information was on web site but profit was difficult to forecast at present and the company did not want to set targets that could then be used as bench (He did say take a look at Coffee Nero to compare growth).

As the poster on ample says it would be good to see forecastes as this would then attract potential investors to

Anyway back to work.

stockdog - 13 Jul 2005 08:46 - 205 of 2037

A slightly mixed three months' trading update today - things are terrific, but getting better, kind of thing. Revenues 50% up on 38 shops v. 22 last time - not very inspiring and some mild disappointment on Czech Republic results. Zip response from the SP. Come on COH - do something!

sd

sjtee - 13 Jul 2005 11:20 - 206 of 2037

Has been like this for a while cannot really understand why. The message is very positive but as you say not inspiring. Feel this has fantastic long term prospects but expected it to do better given last set of results and the fact that they are still moving forward positively

stockdog - 13 Jul 2005 11:39 - 207 of 2037

Interesting side-light is the recent reports from Walmart (and Tesco, I think) that the retail market in E. Europe is currently at saturation point with disappointing results. Seems like supply from established roll-out businesses is out-pacing demand from a largely pre-credit (no mortgges, no credit cards, no overdrafts) populace - probably affects COH as well.

So growth may well be determined by growth of internal economy, not rate of roll-out. So COH's relatively steady approach seems well suited over the mid to long term, even if a tad frustrating short term.

sd

dclinton - 13 Jul 2005 12:40 - 208 of 2037

Can't see much buying going on until the spread drops. 12% is outrageous.

dclinton - 18 Jul 2005 09:56 - 209 of 2037

18% spread now. What are the MMs doing?

sjtee - 18 Jul 2005 16:55 - 210 of 2037

Perhaps there is just a lack of stock in the market and therefore spreads are wide! I agree that the spread is an issue but it has been like that for some time now.

Ted1 - 18 Jul 2005 17:08 - 211 of 2037

I don't think theres a lack of stock. I think theres a lack of buyers for this one. This is a long termer.

sjtee - 19 Jul 2005 13:58 - 212 of 2037

I appreciate this is a long termer but that does not explain the point dclinton raised. If there is such a wide spread who is going to buy or sell. Every so often the bid bounces up from 1.10 to 1.15, people sell and then it goes back a gain. The same at the other end the offer price bounces between 1.30 and 1.25and again get some buyers and then bounces back again. Seems to me the mm's are marking time on this one as there isnt much stock around and they do not want to hold what is about.

Anyway up today for a change, guess what within the 1.10 to 1.15 range.

roma - 19 Jul 2005 14:04 - 213 of 2037

Have to agree with you, this is a long term share, but the spread it far to big, to attract buyers.

roma - 29 Jul 2005 09:34 - 214 of 2037

At last, the smallest spread I have seen for this share.

roma - 29 Jul 2005 11:09 - 215 of 2037

Seems I spoke to soon, buy to offer just gone from 1.10-1.12 to 1.10 -1.35p perhaps they don't want to sell to many.

stockdog - 29 Jul 2005 23:29 - 216 of 2037

I guess these shares may all be pretty tightly held and there is verfy little liquidity in the market. Although these are the quoted prices, how far inside the stripe can you actually trade - anyone tried it?

Long-term hold and forget - maybe another year, but they are going to perform at some stage IMHO.

sd

dclinton - 30 Jul 2005 09:18 - 217 of 2037

Have to agree, stockdog. I think the business model and green-field opportunity of the market they are in are too good not to yield great growth at some point, but it may take some time to get there.

richie1saunders - 31 Jul 2005 17:23 - 218 of 2037

The drop in the offer to 1.12p last week was interesting - several 'watchers' bought in. The spread, generally, is one of the 'risks' we take with a company like COH but in a few years it will be the least of our worries. Remember, CFN started out with 1 store in 1997 - here we are in 2005 and they have 217, just in the UK. I'm confident that COH will be able to achieve bigger and better results in eastern europe.

Ted1 - 02 Aug 2005 10:10 - 219 of 2037

Takeover rumours, could be coffee heaven one day.

COFFEE Republic has seen its shares soar 15 per cent on takeover speculation, but put out a statement saying it had no idea where the rumours were coming from.

The company closed up 0.19p at 1.4p as investors spotted a bargain, but the firm said it was sticking to its deli concept.
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