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.’

Agree, great to get in on the bottom floor...

Patience will bring its reward with COH I think. A little research into the 'Good Food and Drink Guides' of Warsaw and Prague reveal some great feedback for COH stores. The concept is certainly excellent, and the team seem to have a quality product and some snappy marketing to back it up. Millions of potential and increasingly affluent customers, not much (similar) competition, huge investment into the new EU states....mmmm worth a dabble I think..patience. Incidentally I e-mailed the company recently because I was having trouble with a couple of the links on their website. Got a swift reply from Mr Worthington himself and then one from their web manager. Reasonably impressive service I suppose!

richie - I've too experienced an excellent response from the company to enquiries and so have others - so not just a flash in the pan but part of their normal service which means that they take shareholders seriously.

I'll be adding to my holding as we see further signs of progress.

It is a long term share, but I'm sure that we'll all be more than pleased with the outcome if the company continues doing the right thing as it is now.

Hoping these drop to 0.9p offer to double up my holding - looks like T10 traders selling out who bought in at interims.

Hmmm...I'm very tempted to double up myself also.

Decided to top up at 0.87p - no reason for the fall apart from inpatient sellers IMO.

Snapped another chunk up below 0.9p this morning - in the bottom draw for a few years now.

shareshark - finally topped up myself at an absolute bargain 0.87p !

Some very interesting comments from Gateside on advfn:

""Parkiet reports that CHI Polska, a subsidiary of the British-based Coffeeheaven International, a company which operates the largest coffee chain in Poland, has its sights set on becoming one of the leaders in the cafe business in Central and Eastern Europe (CEE). The company currently runs a network of 22 outlets, with eight more scheduled to be opened this year. The CHI president, Richard Worthington, told Parkiet: "We believe that there is room for 250-300 of our outlets in the region from the Baltic, through Ukraine, to Bulgaria". Aside from opening its first cafes in the Czech Republic in the next few months, the company is also looking at takeover opportunities in the region. In its last financial year, which ended in March, CHI Polska recorded revenues of PLN 15.1m (3.4m), a 60% increase over the previous year."

Presently they have 33 stores open and a market cap of just over 3M. So if R. Worthington believes they can expand over 8 times... we would be looking at a Market Cap of over 20M, makes the present sub penny share price look a joke!"

This one looks a cracking bet for growth well into the future - central Europe is THE place to be getting into before the crowd and Coffeheaven is doing just that almost unnoticed.

A big player will eventually take them out for a tidy price, Starbucks maybe, but nowhere near the current price - once established this stock will be worth at least 10 times more IMO.

Now built up a decent sized holding of COH (1.75m shares at an average price of 0.94p) - if I can get 0.9p or less I will add another 250k to round it off.

Intend holding for two years plus to get the full CGT tax taper relief when they start to motor.

shareshark - I agree, Starbucks et al will wait until they've tried to break into the same markets and finally give up and realise that Coffeeheaven are the preferred store and have all the most strategically placed sites (major airports, railway stations etc.).

10p is not as far away as it seems.

As the Eastern European markets expand let's hope they bring some new year cheer to COH in 2005. An overlooked share with much potential - the 'Caffe Nero' of Poland and the Czech Republic??

For anyone dropping in who may be interested in more info. and pics. for all the outlets they have, have a look at:

http://www.coffeeheaven.eu.com/

IMO by this time next year the value in COH will have been recognised by the market (current 3.3m market cap a joke). I cannot predict what the price might be but with the market cap being ridiculously low at the moment considering the growth potential a market cap of 6m would seem reasonable in 2005.

2006 onwards I imagine steadily increasing growth in central/eastern Europe, a rapid re-rating of the share price to reflect this.

We will, by then, hopefully be sitting pretty with our shares purchased below 1p.

Good luck all holders in 2005.

Dave

shareshark - I agree totally, and have updated the header (which was long overdue).

Let me know if there's anything else you'd like to see in there (I plan to put charts in when the sp kicks off North - at the moment there's not much to be gained from TA).

With a bit of time to spare, I've just been looking over Coffeeheaven's website again - it gets regularly updated and has loads of info.

I note in particular that Coffeeheaven should be part of any "ethical" portfolio:

"Many of Central Europe youngest citizens need support to help them develop the skills they need to share in the prosperity of new Europe.

Coffeeheaven is one of 40 leading companies in Poland who are proud to be members and active supporters of Foundation for Corporate Social Responsibility.

Founded by Bill Chasey (formally of the Red Cross and many of the worlds leading charities) this wonderful organisation provides practical day-to-day support to some of Polands poorest children."

Also interesting is that many of Coffeeheaven's outlets are WI-FI hotspots which will make them very attractive for business travellers.

It's amazing that this company has so little interest over here (and explains why COH are thinking of moving the listing to the Warsaw stock exchange - the Poles will recognise COH as a market leader and invest accordingly). Another comment summarises the mammoth achievements made so far:

"In less than four years coffeeheaven has grown from simply an idea to market leader in one of the largest consumer markets on the European continent.

And that is just the start . coffeeheaven already has a foothold in the Czech Republic and is active in several other Central European markets."

Overgrowth
"and explains why COH are thinking of moving the listing to the Warsaw stock exchange"
Do you know the answers to,
What will happen to current holders if this does de-list from aim and how could you trade the new stock?
I am looking to get in under the 1p mark but waiting to free up funds. Although this de-listing theory may temper my enthusiasum!

Ted1 - I'm not convinced that they're going to move exchanges, there are good tax advantages to be had in the AIM market and also raising cash for bonds in the past through Polish institutions has proved tricky (so they got HSBC to buy in) - I think it's more an expression of frustration from the CEO, that given all the hard work they've put in, there is very little to show for it in terms of share price (I have a feeling that this will change in 2005 - much much more business will be heading in Poland's direction).

If there is a transfer, I guess it will be business as usual. Existing holders will be told of the transfer in advance and if they don't want to hold shares in an internationally listed co. then they have the option of selling out when the company is still in AIM. Anyone who stays in, still holds the same amount of shares - all it means is that you need to execute your trades on an international exchange rather than AIM.

Having said that, I look at COH as a long term mega-earner, hence I won't be trading in and out every couple of weeks so the exchange on which they're listed makes little difference.

Most brokers have access to all international markets and will place a trade for you, though this will need to be over the phone as it's a special transaction.

Even if de-listing occurs, the reason is to ensure that the market cap. of the company reflects its status - hence we are likely to see a nice hike in share price if floating on the Warsaw Exchange actually takes place.

I think that Coffeeheaven will continue on and on to expand and ultimately they will be recognised as a superior solid growth company. Of course, they model themselves on Starbucks and should the big guys want a large chunk of the Central/Eastern European coffee shop cake - there is also a distinct possibility that they could be taken over (and you can be sure that Richard Worthington will want a very good price indeed, considering all the work he's put into this gem of a company).

Overgrowth
Just got back in from a meal at our local indian with the family. Many thanks to MXC for that!
Once again your response is comprehensive and thorough.
I understand what you say and it makes a lot of sense I shall be watching with interest.
Many thanks
Ted

451k buy at a near 5% premium to the quoted offer - someone keen to get in.

Happy New Year to all COH supporters. Looking forward to hearing how the Christmas trading period went.