Costa Coffee in the red despite sales success
Costa Coffee fell into the red despite its revenue rising by more than £100m in 2023, it has been revealed.
The Buckinghamshire-headquartered business, which is owned by Coca-Cola, has reported a pre-tax loss of £9.6m for its latest financial year.
The loss comes after the firm posted a pre-tax profit of £245.9m in 2022.
Newly-filed accounts with Companies House also show Costa Coffee’s revenue increased in the 12 months from £1.11bn to £1.22bn.
Costa Coffee said it fell to a loss because of net finance costs of £5m and its dividend income being slashed from £245m to £1m.
Despite it falling to a loss, the business paid a dividend of £85m to parent company, down from the £95m it issued in 2022.
During the year the average number of people employed by Costa Coffee increased from 17,344 to 17,809.
Increased costs eats into Costa Coffee’s finances
A statement signed off by the board said: “Costa utilised revenue growth management strategies to drive growth in transactions, pricing and mix along with efficiency programs to offset the impact of inflationary pressures on the cost of goods and operating expenses.
“The company continues to invest in new retail stores, renewing existing sites and proposition development.”
The business added: “The growth in revenue, year on year, generated incremental gross margins.
“However, inflationary pressures on the cost of goods, including energy and payroll, and the impairment of the company’s investments in two of its subsidiaries resulted in an operating loss for the year.”
In March 2024, Costa Coffee received dividends of £85m from two of its subsidiaries.
It also paid a dividend of £80m in April to its parent company.
Costa Coffee was founded in London in 1971 and was acquired by Whitbread in 1995.
It was then bought by Coca-Cola in 2019 in a deal worth almost $5bn.