Pret a Manger’s owners have warned of doubts over its ability to continue as a going concern as the coffee shop chain faces uncertainty over future Covid restrictions and a shift to hybrid working.
Accounts for Pret’s UK holding company filed this week show that last month it doubled its “standby facility” reserved to support the business in case of difficulty to £200m, up from the £100m set aside in March last year.
The latest cash call on shareholders comes on top of £100m pumped into the business in the autumn and £185m in 2020 when the company first warned of “material uncertainties” as sales were crushed by the pandemic.
In the holding company accounts, which were signed off on 10 February, directors said there were still “material uncertainties which may cast significant doubt over the group’s ability to continue as a going concern”.
They said that the possibility of further trading restrictions linked to Covid-19 and the associated unpredictability of consumer behaviour as well as uncertainty about the group’s ability to refinance a debt facility that expires in July next year were potential clouds over its financial position.
The group, which had debts of almost £400m at the end of 2020, has been dramatically affected by the pandemic, during which it was forced to close some outlets for several months. The London-focused business has also been hit by the shift to working from home and a decline in tourist numbers in the capital.
Last year, it emerged that sales at Pret a Manger (Europe), the group’s main trading company, dived to a pretax loss of £26m in the year to 2 January 2020 compared with a profit of nearly £49m a year before. That came as sales slipped to £708m from £710m and it bought the Eat chain.
Like many other hospitality businesses, the group is also struggling with rising costs, which forced it to put up the price of its subscription service earlier this month shortly after increasing pay for its workers for the second time in four months.
On Friday, Pret said its UK shops were trading at 93% of pre-pandemic levels, and much higher levels in regional and suburban shops.
Pano Christou, the chief executive, said: “In September last year, we announced ambitious plans to double the size of Pret’s business over the next five years, backed by a £100m injection of funding from JAB and Pret co-founder, Sinclair Beecham.
“Since announcing this strategy, Pret has continued to expand its business in the UK and internationally, and we’re confident that we will continue this pace of growth in the coming years. Despite the impact of Omicron on trade in December, our UK shops continue to recover strongly, with our coffee subscription used over a million times every week in the UK.”
