Coffee Republic cuts losses

Coffee Republic plans to serve up more shops

Coffee Republic, the independent espresso bar chain, has announced a loss of £2.4m for the last year.

But the chain, which is third biggest in the UK, served up a strong growth in sales as Britain's thirst for coffee bars continues unabated.

The company, which operates 82 espresso bars and cafes across the country, said sales in the year to 31 March shot up 68% to £21m.

Like-for-like sales, which strip out income from bars and cafes opened during the year, grew by 8.4%.

Consolidation

Chief executive Peter Morris said the company was strongly positioned in the market, which is expected to grow to 2,400 branded outlets in two years' time.

He said Coffee Republic hoped to have 200 bars and cafes by 2004, but admitted the company was finding it difficult to find quality sites "on attractive terms".

Pre-tax losses at the company were cut back from £2.7m to £2.4m.

The coffee bar market is expanding at the rate of 22% a year and is set to exceed 2000 outlets in the next two years.

But analysts have questioned how long Coffee Republic can remain independent in the face of competition from larger rivals Costa Coffee and Starbucks.

Geoffrey Young, a director of Allegra Strategies, said Coffee Republic will have to focus on product innovation if add more food to its offering if it was to stay competitive.

"Undoubtedly, we will see some consolidation in the market in the next 12 to 18 months," he added.

Coffee Republic's share price was up 0.75p at 18.75 at 1327GMT.