Branded coffee shop chain Caffé Nero has revealed a 127 per cent rise in pre-tax profits for the year to 31 May 2004.

The group saw turnover rise 28 per cent to £50.5m from £39.4m in 2003 while pre-tax profits shot up from £1m to £2.4m.

The company, which now operates 183 European-style coffee houses in 66 UK towns and cities – opening 43 new sites last year – has a branded store market share of 11 per cent, having gained 4.3 per cent over the last three years.

Chair, Gerry Ford, said: “The UK branded coffee sector continues to experience high levels of growth and Caffé Nero has clearly demonstrated its market-leading potential in this expanding segment of the market.

“Trading in the current year has had an encouraging start and the group looks well positioned to deliver another year of excellent financial performance.”

He added that at present opening pace, the group should operate 200 stores by February next year.

According to analyst Allegra Strategies, the UK coffee bar industry is now worth £2bn, with the branded sector worth £630m and expected to experience 10-15 per cent annual growth for at least the next three years.