Caffe Nero’s future called into question in the event of third wave of Covid-19
Caffe Nero’s future has been question in its latest company accounts, after a host of pandemic-related factors made the coffee chain’s future appear uncertain.
A fresh wave of temporary closures and a legal challenge by landlords to a recent restructuring of the business have cast “material uncertainties” over its future, directors said it’s the Caffe Nero’s latest accounts, seen by the Telegraph.
In the event of a third wave of the virus, and the potential impact on trading from another lockdown, the company risks being unable to pay off its £390m of debt, Caffe Nero said.
In addition, Caffe Nero’s auditors EY raised concerns about the chain’s future due to uncertainty around the outcome of the restructuring and when trading would return to pre-pandemic levels.
The accounts also showed the coffee chain recorded a pre-tax loss of £82m in the year to May 31 2020.
A spokesperson for Caffe Nero told the Telegraph the company achieved £13.4m in underlying profits during the period, adding: “As is the case for all other retail and hospitality businesses, we certainly hope the government will not impose additional lockdowns as that would create further uncertainty.”
They added that it had repaid all loans taken out during the pandemic and that it forecast “no covenant violations in the next 12 months.”
The company has been cash flow positive each month for the last six months, they continued, and current trading is around 70 to 80 per cent of pre-pandemic levels.