Brexit and write-down affect Esquires global owners
posted on 15th June 2017
NZAX-listed Cooks Global Foods, which owns the rights to the Esquires Coffee chain outside Australasia, had higher sales in the UK and Ireland in 2016, but lower revenue revenue thanks to post-Brexit currency fluctuations. The company has posted a larger net loss ahead of a restructuring of its Chinese operations.
Esquires in Australia and New Zealand is independently owned by RFG and operates here via master franchisee Cafe Coffee & Bakery Systems.
The company wrote down the value of its Chinese coffee store operations by $4 million ahead of its expected sale into a new joint venture in China, and wrote down the carrying value of the Progressive Processors supply business by $450,000 after it was sold. In exchange for its Chinese assets, which includes 26 stores, Cooks gets 30 percent of the company which will own the Esquires brand in China, Hong Kong, Macau and Taiwan.
Revenue from its operations in the UK and Irish markets grew in local currency terms but the gains were erased by falls in the pound and the euro following the Brexit vote last June, Jackson said. After conversions, sales from Britain decreased 13 percent to $1.5 million, compared to a 22 percent gain in local currency. The company now has 29 stores open in the UK, four more than a year earlier. Irish revenue rose 12.5 percent to $668,000, behind the 15 percent gain on a local currency basis.