Business

Coffee Day targets ‘financial health’

CDE will continue to strengthen the Coffee Day brand, and offer a wider choice, says S.V. Ranganath. K. Murali Kumar

CDE will continue to strengthen the Coffee Day brand, and offer a wider choice, says S.V. Ranganath. K. Murali Kumar  

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Nurturing Fresh & Ground an opportunity to build national brand, interim chairman tells investors

Coffee Day Enterprises, promoted by late coffee baron and serial entrepreneur V.G. Siddhartha, said it had identified financial health as the key agenda for the group in the next three years.

In his address to shareholders at the company’s AGM held on Saturday, interim chairman S.V. Ranganath said, “We will continue to strengthen the much-loved Coffee Day brand, build on our relationships with millennials by offering newer, more relevant and a wider choice of products,” he said.

Another national brand

To add an additional large revenue stream, Mr. Ranganath said the company had entered into a 51:49 venture with Impact HD Inc. from Japan to set up a chain of convenience stores in India to expand its Fresh & Ground (F&G) business.

“About 425 retail outlets have been transferred to this subsidiary to be re-modelled into a chain of retail stores that will go by the brand name Essentials. Work is underway to develop this brand into a round-the-clock, go-to store for food and beverages (F&B) and convenience products. I see this as the perfect opportunity for us to launch yet another national brand, starting out from the largely local outlets of F&G,” he told shareholders.

Keeping in view the current business health and long-term prospects, the group was looking to disinvest stake in a few business undertakings to reduce its overall debt, he informed shareholders.

The investigation — by former DIG of CBI Ashok Kumar Malhotra into the circumstances surrounding Mr. Siddhartha’s demise and into the books of accounts of the company and its subsidiaries — is still underway and a final report is awaited.

The company’s Same Store Sales Growth rose from 7.23% in FY18 to 9.55% in FY19.

“We continue in our leadership position in fresh milk-based automated coffee vending machines. Indus Plus, our IoT-enabled, Android-based touchscreen machine, has received encouraging response.

“The freshly brewed tea market is larger than that of coffee; we launched Indus Automated Tea Brewer, which uses innovative tea pods,” he said.

Logistics, a gainer

He added that the logistics sector was going to be a big gainer in the coming years. However, he said group company Sical Logistics needed additional capital infusion for new initiatives it is undertaking. The company was exploring various options of divestment of its assets, including partial stake sale, to strengthen liquidity, he added.

“To ensure we remain relevant in the next decade, we continue to invest in three pillars: talent, technology and superlative customer experience. To continue the expansion of our business, as recommended by the executive committee, the board is exploring options of having suitable business or financial partners,” he said.

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Printable version | Jan 26, 2020 4:30:32 PM | https://www.thehindu.com/business/coffee-day-targets-financial-health/article30307596.ece

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