Pret warmed up by quinoa and coffee

Mac 'n' cheese is bubbling away nicely for the food on the go chain - but its private equity owners could still be soaking it with debt.

by Rachel Savage
Last Updated: 21 Apr 2015

Quinoa is not just a favourite of north London yummy mummies shopping in organic delis, but increasingly a staple of the time-poor office worker with an eye on their waistline. The uber healthy grain was one reason cited by Pret a Manger for its record-breaking results.

The food on the go chain’s sales rose 16% to £594m in 2014, or 9.7% on a like-for-like basis. And 12% of that turnover came from products developed in the previous year, including quinoa rice pots, gluten-free five grain porridge and macaroni cheese, of which it is now selling 50,000 portions a week.

Although it said its green goodness juice (an unappetising name if we’ve ever heard one) was outperforming its ‘classic’ chicken and avocado sandwich, it wasn’t all health and wellness for the private equity-owned chain. Pret is now shifting more than a million cups of coffee a week.

The chain, which is trialling a hot dinner service in a London store, is also expanding its footprint with 33 new shops, 23 in the UK, seven in the US and its first in China in Shanghai. It now has 374 stores in total.

But what about profits? Pret’s earnings before interest, taxes, depreciation, and amortisation (aka Ebitda) rose 14% to £75.9m, but that won’t be the whole story. Bridgepoint Capital bought Pret in a €500m (£359m) deal in 2008. That was backed by £220m worth of debt, but it had to take on another £375m loan in 2013 in order to pay out a £150m dividend to shareholders. Ebitda conveniently strips out the costs of servicing that debt, so for now we are none the wiser as to how profitable Pret really is.

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