Marley Coffee expects to break even next year
MARLEY Coffee US, chaired by Rohan Marley, revealed plans for the first time to break even next year.
Hitting that target would retard the growth of its US$25 million accumulated deficit at the fast-growing coffee company which aims to double sales to US$20 million for its financial year ending January 2016.
“We believe fiscal 2016 is the breakout year for the company and we forecast to be EBITDA [earnings] positive by the end of the year, based on our current projected sales volumes,” stated the management in its quarterly report about the earnings before interest, tax, depreciation and amortisation (EBIDTA) posted to its website.
In fiscal 2015, the coffee brand established a national grocery distribution network, increased its brand awareness and strengthened its international presence. Marley Coffee hopes to be EBITDA positive in the third and fourth quarters, and show positive EBITDA in its audited results of operations for the year ended January 31, 2016. The company recorded negative EBITDA of US$1.1 million for its April 2015 quarter. The good news is that its net loss of US$1.2 million in the quarter was 37 per cent less than the 2014 corresponding quarter.
The company’s net revenues for the quarter hit nearly US$2.6 million or roughly one-quarter higher year on year. Additionally management indicated that it prepared and organised the operations of the company to scale to US$40 million in revenue without materially increasing staffing needs until 2017.
The company, however, periodically requires working capital funding to maintain its viability. Earlier this year the company secured a line of credit up to US$500,000 from US-based Gold Gross Capital LLC.
“On March 26, 2015, the lender advanced US$250,000 to us under the terms of the line of credit,” stated Marley Coffee about advancing half of the line of credit.
In its previous financial report the company announced plans to double its sales to between US$17 to US$20 million by its 2016 year end.
The company distributes products in more than 7,500 outlets. In 2014 it inked a deal with one of the largest independent coffee and tea manufacturers in North America — RealCup brand. The partnership would see Marley Coffee distributing single-serve capsules of coffee throughout Canada. This follows a landmark contract in 2013 to supply Kroger and Safeway — the largest retail stores in the US — with roasted coffee products.
Marley Coffee operates a local and US division under the chairmanship of Rohan Marley, son of late reggae legend Bob Marley.
