Pret A Manger writes down a third of its value from 2018 JAB takeover
Sandwich and coffee chain blames global economic gloom, UK employer tax rises and higher interest rates
Pret A Manger has written off a third of the value of its 2018 acquisition by European investment group JAB, pushing the UK-based coffee and sandwich chain further into the red as higher costs and an uncertain economic outlook dent its prospects.
In its accounts for last year, the group made a £553mn non-cash impairment to the £912mn goodwill on its balance sheet created as part of the deal, which valued Pret at £1.5bn.
The writedown reflected the “uncertain global macroeconomic environment”, extra costs from the increase in national insurance contributions and the impact of higher interest rates on its long-term value, the company said.
As a result of the writedown, Pret sunk to a pre-tax loss of £525mn last year, compared with a £61.7mn loss in 2023.
In June, the FT reported that family-owned JAB had recently explored bringing in new investors ahead of a potential initial public offering. On Monday, Pret chair José Cil said that “there is the potential for an IPO”.
Pret noted that 2024 was the first year since the 2020 pandemic that it had consistent trading data to allow it to make forecasts, triggering the impairment. Pret was hard hit by the move to working from home during the pandemic — a trend that has not entirely disappeared.
Revenues fell to £868mn in 2024, down from £907mn the previous year, driven by the disposal of a controlling stake in parts of its US business.
The accounts for the year ended January 2 2025 also show that JAB has injected a further £250mn into the company, which was used partly to repay debt as well as to increase the group’s cash on hand and unused borrowing facilities to about £100mn.
Pret has been pursuing international expansion, taking its menu of wraps, sandwiches and hot snacks to countries around the world, although it still makes the majority — £741mn — of its revenues in the UK and Ireland. Pret is prioritising city centres and travel hubs in particular.
It now has 717 stores in 20 countries — 408 are company operated and the rest franchised — up 11 per cent year-on-year. It plans to launch in South Africa in 2025.
The accounts say that the group has also embarked on a restructuring plan to improve “operating efficiency” and reduce costs, without giving further details.
Pret has announced a new medium-term strategy, including plans to test meal deal formats to try to win market share from rivals such as Marks and Spencer in the UK. It said that its July launch of “Super Plates”, or bigger salads, had increased customer visits, particularly in London.
Like-for-like sales rose 2.8 per cent, the company said, with worldwide “system sales” including franchise shops rising 10 per cent to £1.2bn.
Pret, which was founded in 1986, employed about 8,165 people last year. During the period, the company declared and distributed an interim dividend of £2mn — down from £5mn in 2023 — to its parent company.
Pano Christou, chief executive, said that 2024 “was another year of growth for Pret, where we took disciplined decisions to protect sales, despite intense strains on the hospitality industry”.
In February 2024, Pret completed the majority disposal of outlets in New York, Philadelphia and Washington to Empire JointStar, a partnership between Pret and Dallas Holdings, which is also Pret’s franchise partner in parts of the UK and in Southern California.
Dallas Holdings controls and operates Empire JointStar with a 70 per cent stake.