Cooks Foods widens 1H loss, as it buys Canadian franchise, chases ME, China sales
Cooks Global Foods widened its first-half loss after buying the Canadian franchise rights to Esquires Coffee Houses, completing its ownership of the brand outside New Zealand and Australia, and spending more to expand its global footprint.
The loss widened to $1.2 million in the six months ended Sept. 30, from a loss of $831,000 a year earlier, the Auckland-based company said in a statement. Operating income was $4.3 million, from zero a year earlier, before it embarked on it franchise buying strategy in October 2013.
In June last year, Cooks agreed to pay Esquires founders Stuart and Lewis Deeks $300,000 in cash and an undisclosed number of shares for the franchisee rights for the coffee houses worldwide, excluding New Zealand, Australia and Canada. To date the company has 85 stores operating globally, including in China and Middle East which is driving growth, and expects to have in excess of 90 stores by the end of March 2015.
The coffee chain has stores in the UK, its largest market, Ireland, China, Saudi Arabia, Bahrain, United Arab Emirates, Kuwait and Canada, and is now pushing into Indonesia and Northern Cyprus.
"With the foundations for Cooks firmly in place, the business is focused on rapidly and aggressively expanding its network through both natural and acquired growth to achieve critical mass," said Keith Jackson, Cooks chairman. "The full acquisition of the China Master Franchise that is expected to be finalised shortly will provide a further opportunity to build a strong business in the huge China market."
Cooks gained a back-door listing to the New Zealand stock exchange small cap market NZAX in 2008 in an attempt to build a major New Zealand-owned listed food business. The following year, it abandoned a plan to buy the Diamond pasta and DYC vinegar brands from Goodman Fielder, instead selling its assets to Australian company Hutchinsons for $4 million and allowing Hutchinsons to settle the proposed acquisition.
Shares of Cooks last traded at 13 cents, and have declined 28 percent over the past 12 months.