Irish-owned coffee group Bewley's increased its after-tax profits by 43 per cent to €2.2 million last year on the back of strong growth in the UK.
Revenue for the Campbell Bewley Group rose 6.6 per cent to €104 million, according to accounts given to The Irish Times. This was the first time since 2004 that turnover topped €100 million and is attributable to sales growth of 78 per cent in the UK following the acquisition of the Bolling Coffee business in March 2013.
Sales in the UK rose to €18.7 million last year, up from €10.5 million in 2012. On a like-for-like basis the growth would have been 14 per cent. The UK accounts for 18 per cent of Bewley’s overall revenue.
US sales
Revenue in Ireland rose 3.3 per cent to €38.8 million but declined 6 per cent in the US to €46.5 million following the sale of some cafes. Its wholesale division now accounts for 75 per cent of total sales with the balance from its cafes in Ireland and Boston.
Bewley's chief executive John Cahill said it continues to review its options in relation to the dispute over the rent on its flagship Grafton Street cafe.
Last year, the High Court confirmed that a market rate should prevail on the premises. Following arbitration, a rent of €728,000 was established – roughly half the amount previously paid to Ickendel Ltd, which is controlled by developer Johnny Ronan.
‘Disappointing’
This judgment was subsequently overturned by the Supreme Court. Mr Cahill described it as a “disappointing outcome”, adding that Bewley’s “continues to review its options to achieve an equitable and sustainable rent”. He said the Grafton Street cafe is losing the “guts of €1 million a year”.
"We're still considering what we can do and what the next move is," he said. "The rent is uneconomic and is draining resources from the group." On current trading, Mr Cahill said: "Sales will be up in 2014 versus 2013." Bewley's, which is controlled by Patrick Campbell, has launched a range of gifts for Christmas and is investing €3 million to upgrade its IT systems.
