By James Davey
LONDON (Reuters) -British sandwich and coffee chain Pret A Manger has booked a goodwill impairment charge of 553 million pounds ($749 million), citing an uncertain global economic environment and higher employer costs in the UK.
The retailer, commonly referred to as Pret, is majority owned by European investment group JAB Holding. When JAB acquired control of Pret in 2018 there was 912 million pounds of goodwill on its balance sheet.
Pret said the charge reflected the “uncertain global macro-economic environment, the additional bills introduced as a result of the (UK) National Autumn Budget in 2024, and results in part from the use of a higher discount rate than was used in previous calculations.”
Last year’s UK government budget increased employer taxes and hiked workers’ minimum wage. UK retailers fear further cost rises from this year’s budget due to be presented in November.
The impairment charge meant Pret sank to an operating loss of 451.5 million pounds in 2024, versus a profit of 28.3 million in 2023.
“It’s no reflection on how the business is doing as we look to now and in the future,” Pret CEO Pano Christou told reporters.
An initial public offering of Pret remains a possibility. “There is potential for an IPO certainly,” said Chairman Jose Cil.
Trading at Pret has recovered after sales were hammered during the pandemic when its customers, mainly office workers and commuters, were kept at home.
It said worldwide sales in 2024 rose 10% to 1.2 billion pounds, while core earnings, increased 36% to 97.5 million pounds.
Pret closed the year with 717 shops in 21 markets, employing 12,500. One quarter of Pret’s sales are now made outside the UK.
Its priority is to grow in Britain and the United States, with a focus on travel hubs and city centres.
Pret is aiming to grow its UK footprint from 500 shops currently to as many as 1,500, and is targeting a tenfold expansion in the U.S., where it currently operates 70 stores generating just over 100 million pounds in annual sales.
Pret also plans to test new “meal deal” formats to tap into Britain’s growing appetite for these deals.
($1 = 0.7384 pounds)
(Reporting by James Davey; Editing by Susan Fenton)
