Pret books £553m charge on UK tax hikes and global uncertainty

Pret A Manger has booked a goodwill impairment charge of £553m, blaming higher costs in its core UK business and a more uncertain global economy.

The sandwich and coffee chain, which has 717 stores in 21 markets but earns the bulk of its revenues in the UK, reported an operating loss of £451.5m for 2024 despite a 10% rise in global sales to £1.2bn. It had made a £28.3m profit over the previous 12 months.

Money latest: My parents' row with P&O Cruises was resolved by audio recording Pret blamed the reverse on the non-cash charge. The retailer, majority-owned by European investment group JAB Holding, had £912m of goodwill on its balance sheet when it changed hands in 2018.

Pret said the charge reflected the "uncertain global macro-economic environment, the additional bills introduced as aresult 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." The budget's measures included raised employer national insurance contributions and minimum pay thresholds. Both kicked in during April.

UK retailers fear further cost rises from this year's budget, which Chancellor Rachel Reeves will deliver in late November. Pret boss Pano Christou said of the operating loss figure: "It's no reflection on how the business is doing as we lookto now and in the future." Pret is aiming to grow its UK footprint from 500 to around 1,500 stores, and a large expansion in the United States.

The company is eyeing the possibility of a stake sale or flotation. "There is potential for an IPO (initial public offering) certainly," chairman Jose Cil added.

Pret also revealed a plan to trial meal deal offers. The chain said it would test the format in the final three months of this year as part of efforts to boost lunchtime trade.

There was no information on pricing or where the initiative would launch. Pret updated on its plans as one of its main rivals is prepped for sale.

Sky News revealed last month that Coca-Cola was exploring a disposal of Costa, less than seven years after acquiring it in a bid to reduce its reliance on carbonated soft drinks. Costa trades from more than 2,000 stores in the UK, and well over 3,000 globally, according to the latest available figures..