MISSISSAUGA, ON, Nov. 3, 2014 /CNW/ - The Second Cup Ltd. (TSX: SCU) ("Second Cup" or the "company") announces a new three-year strategic plan – the roadmap for the company's transformation and growth. The company's vision is to be the coffee brand most passionately committed to quality and innovation. To support the strategic growth plan, Second Cup is planning a share offering by way of private placement in November with the intention of raising up to $5 million. All Second Cup directors intend to participate and plan to acquire a combined total of approximately 40% to 60% of the share offering. The new capital will further strengthen the company's balance sheet and will help accelerate the renovation of company-owned cafés in prime locations.
The three-year plan is built on five key strategies that will transform the brand and grow the business. The five strategies are to:
- Reinvent the brand - pillars of superior quality, community, creativity, collaboration and optimism will be reflected in every touchpoint.
- Be the coffee authority – Second Cup will be the preferred destination for the best coffee and will provide high quality, innovative products and experiences.
- Deliver an inspiring café experience - warm and inviting environment with friendly, skilled and passionate baristas.
- Revitalize the network - cafés will reflect their neighbourhoods in priority markets across Canada.
- Be world-class partners - a sought after franchisor and an attractive investment.
The strategic plan will be executed in two phases. The first phase will lay the groundwork for growth, driving same store sales through product innovation, improved operations, brand and loyalty building initiatives, while honing and commencing roll out of the café of the future concept through new locations and renovations. The first café of the future is scheduled to open later this year in downtown Toronto.
The second phase of the strategic plan will deliver significant growth ramping up in 2016 as a result of new café development and same store sales growth.
With the completion of major initiatives including the restructuring of Coffee Central, improvements to the franchise model, the development of the new café of the future and the new strategic growth plan, Second Cup is on track with its transformation.
Alix Box, President & CEO commented, "With our three-year strategic plan, new vision and brand direction, we are entering an exciting phase of our transformation. Coffee will once again be at the core of our offering and by renewing our focus on superior quality, franchisee and customer relationships and innovation, we are confident that we will win the hearts of Canadians."
With the successful achievement of the strategic plan, Second Cup will be completely transformed over the next three years. Key financial targets include:
- Annualized system sales: to grow by approximately $50 million to $234 million in 2017;
- Same store sales: to turn positive by late 2015 and to continue building to more than +5% by 2017;
- Grocery Channel: continued profitable growth over the next three years;
- Earnings Per Share: targeted to exceed $0.50 to $0.60 per share by 2017;
- Balance Sheet: significant generation of free cash flow to result in material strengthening of the company's balance sheet.
Michael Bregman, Second Cup's Chairman commented, "Our plan for the future is ambitious. While there are no assurances, our Board of Directors is highly confident that Second Cup will be restored to a position of leadership with significant potential for value creation. The strategic plan is well conceived and we have the right leadership team for the future. Our confidence is reflected in the board members' intention to acquire a significant amount of the equity offering, with all directors participating."
About Second Cup
Founded in 1975, The Second Cup Ltd. is a Canadian specialty coffee retailer operating over 345 cafés across the country. All of the approximately 4,000 Second Cup baristas are trained coffee experts who handcraft over 1 million coffee and tea beverages every week, and are committed to ensuring excellence in every cup and the very best customer experience possible. For more information, please visit www.secondcup.com or find us on Facebook and Twitter.
SOURCE: The Second Cup Ltd.
For further information: Steve Boyack, Chief Financial Officer, (905) 362-1818 or [email protected]