Pret A Manger has reported a goodwill impairment charge of £553m due to increased costs in its UK business and a more uncertain global economy.
The sandwich and coffee chain, with 717 stores in 21 markets, saw an operating loss of £451.5m in 2024 despite a 10% increase in global sales to £1.2bn. This is a significant drop from the £28.3m profit made in the previous year.
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Pret attributed the loss to the non-cash charge.
The majority-owned by European investment group JAB Holding had £912m of goodwill on its balance sheet after changing hands in 2018.
Pret explained that the charge reflects the uncertain global macroeconomic environment, new bills from the UK National Autumn Budget in 2024, and a higher discount rate used in the calculations.
The budget changes included increased employer national insurance contributions and minimum pay thresholds.
These changes took effect in April.
UK retailers are concerned about additional cost increases from this year’s budget, to be announced by Chancellor Rachel Reeves in late November.
Pret CEO Pano Christou commented on the operating loss figure, stating, «It’s not a reflection of the business’s current or future performance.»
Pret aims to expand its UK presence from 500 to approximately 1,500 stores and to significantly grow in the United States.
The company is considering a potential stake sale or IPO.
«There is definitely potential for an IPO,» added chairman Jose Cil.
Pret also disclosed plans to test meal deal offers in the last three months of the year to boost lunchtime sales.
Details on pricing and launch locations were not provided.
Pret’s updates come as one of its main competitors, Costa, is being prepared for sale.
Sky News recently reported that Coca-Cola is exploring the disposal of Costa, less than seven years after acquiring it to diversify its product portfolio away from carbonated soft drinks.
Costa operates over 2,000 stores in the UK and more than 3,000 globally, according to the latest data available.