Coppa Club owner cautious over pursuing expansion
The parent group of Coppa Club has said it is pursuing its expansion strategy “cautiously and at a measured pace”, citing the uncertain economic background.
However Various Eateries, which also operates the Noci and Tavolino food and beverage concepts, said the performance in new openings had been encouraging and the availability of sites in prime locations at lower rents continues to increase.
This comes as the group reports its financial results for the first half of the 2023 financial year, in which its revenue increased by 16% to £20.6m (H1 FY22: £17.7m).
In the 26 weeks to April 2, group like-for-like sales (excluding the benefit of reduced VAT rates for hospitality businesses in 2022) were marginally up. Various Eateries said it was pleased with the revenue performance, especially considering the challenging economic environment, disruptions from train strikes, and an unseasonably wet and dull spring.
However, “unprecedented” cost pressure in the supply chain, energy bills, and wage bills for hospitality businesses has seen the group report a fall in gross profit to £0.6m (H1 FY22: £1.5m) and a loss after tax of £4.3m (H1 FY22: loss of £2.6m).
Over the period, Various Eateries said its first Noci site in Islington, which opened in March 2022, had continued to outperform management expectations.
Since the period end, the group has opened a further two sites, Coppa Club Guildford and Noci Battersea Power Station, bringing its total estate to 17 locations. It said both sites had been performing well.
The group has also announced the opening of a third Noci site in Old Street, Shoreditch, expected to open later this year.
Coppa Club Cardiff and Coppa Club Farnham are set to open in the next financial year.
Andy Bassadone, chairman of Various Eateries, said: “A squeeze on margins of this scale is unprecedented in my thirty-five years’ experience in the hospitality industry. Even though we were anticipating a significant downturn, the actual rise in input costs has been much higher and far more sustained than the industry anticipated.
“In addition to the discipline we are exercising in relation to new openings […] we continue to focus rigorously on the cost structure and operational efficiency and will adapt the way we operate in this environment.
“With established and desirable brands, a clear growth strategy, and a management team that has a proven track record of growing businesses in good and bad times, the group is well positioned. We will approach the second half in a similarly measured way to the first and remain confident in our ability to accelerate growth when conditions normalise.”