You can also listen to the interview in the audio version.
–
Jan Mužátko started thirty years ago as a beverage retailer on Charles Bridge. Today, it operates a network of pizzerias Coloseum, Občanská plovárna and Pivovar Národní and has an ambitious plan, it wants to become the first company in the gastronomic field listed on the Prague Stock Exchange.
–
He plans to join at the end of May, but preparations took place more than twice, because for the first time the IPO planned for spring 2021 was thwarted by a covid pandemic.
–
“We would like our clients to become co-owners of our restaurant. We say, come and eat in your own restaurant, don’t go to the competition, eat with yourself, “says Jan Mužátko, founder of Coloseum Holding, in an interview for SZ Byznys.
–
The company wants to offer up to 38 percent of events, for which it would like to take home up to 150 million. These should be used to repay existing bank liabilities and further expand. Within three years, 10 new restaurants are to be opened and the network of franchises of the Italian cafés Caffé Pascucci is to be launched.
–
The Start stock market is intended for developing small and medium-sized Czech companies, for which there is a way to get capital. In the past, for example, the pharmaceutical company Pilulka also used it.
–
There are still a lot of people who want pineapple for pizza. We don’t stop them, but we probably don’t recommend it.
–
Speaking of numbers, how many people now go to restaurants, are Czechs starting to save?
–
On the contrary. We are currently on the numbers from 2019, sometimes significantly over. The numbers are going up and people are indulging what they couldn’t for two years.
–
And aren’t you afraid they’ll start saving?
–
I was waiting for this question. I don’t think people stopped going to restaurants and cafes under any circumstances. It is a social issue that people forgive themselves last.
–
They may not be able to afford it, energy is at its maximum, food prices are rising…
–
Wages also rise with inflation… but as I said – I think this is the last thing they would forgive. Even travel agencies are now reporting that they are sold out and I don’t think there is a difference.
–
Prices have risen by 10 percent
When we mention the increase in prices, how much higher are your prices now?
–
We have raised about ten percent on average.
–
Did you manage to reflect the complete increase in costs in your prices?
–
The current ones are so far. We’ll see how it develops. We usually change prices twice a year. Spring and autumn. We’ll see what it looks like in the fall.
–
I ask because some restaurants admit that, for the first time now, they are raising prices almost every month as their costs rise…
–
We are a big company, we can’t change prices every month. However, we also have direct information from our suppliers, especially from Italy, and the pricing has stabilized for them during the month of April. Nowadays, the media, ie electricity and gas, are even going down slightly. We will certainly not increase the price at the moment.
–
Statistics have just been released, according to which agricultural prices rose by 35 percent year on year. This must be reflected in food prices…
–
The increase in prices is currently due to the war in Ukraine, which is a major supplier of wheat and sunflower oil. Of course, it depends on the area in which the increase will take place. In our country, within our suppliers in Italy, the segment is affected by about fifteen percent. For example, winemakers remain at the same prices.
–
This is reflected in areas that are directly linked to Ukraine or to processing. Where a lot of heat is used, prices go up. You find yourself in a situation where a chilled product is slowly cheaper than a dried product, because you need more heat to dry it.
–
Do you still have the same margins?
–
So far, we have the same margins, now we have raised the price lists by ten percent.
–
Is there a psychological frontier where those prices can’t go?
–
The Colosseum is 27 years old, during which time prices change. We have all the menus stored and it’s evolving like everything. Today, a better Škoda costs over a million crowns and I remember it for 45,000 crowns. Our prices also respect that direction.
–
A few competitors, a few restaurateurs, left. They stopped working. That opportunity is even greater today.
–
When we started, pizza was 95, today it’s 195
So how much did pizza cost when you started and how much does it cost today?
–
The most basic Margarita cost 95 crowns and today it costs 195 crowns – the increase is there. We face competition, so we can’t adjust prices much. But I think that now prices will stagnate again for some time. After the covid and the war in Ukraine, the inflation is, but the question is how real it is.
–
Your network is not only pizzerias, but also Pivovar Národní and catering. How’s it going?
–
Among other things, we are the operators of the Civic Swimming Pool, which has been under restrictions for a total of 17 months. That time was difficult. However, we currently have it sold out for the next two months. The interest is great and many companies are trying their best.
–
There are definitely things you can’t save. Catering is a service that complements any meeting. Maybe a little lower budgets are needed, but it turns out that not everything can be done over the Internet and that social gatherings are important.
–
Is catering already at the original pre-pandemic level?
–
New network of cafes. Will there be a market threesome?
Now you want to go public. Why?
–
Over the past two years, our industry has been severely affected and we now have great opportunities. It is an opportunity to start and grow. In addition, we have managed to conclude an exclusive contract with the Italian network of Pascucci cafes and we want to expand our portfolio. We have obtained a master franchise for the Czechia and we can give smaller cafes franchises of this brand.
–
So you want money for further development?
–
Yes, it’s into development. We also say that we would like our clients to become co-owners of our restaurant. We say, come eat to your own restaurant, don’t go to the competition, eat with yourself.
–
As part of standard distributors or brokers, our clients open an account and buy our shares the moment we enter the stock exchange. Our stocks are the first to be tasted.
–
Is this the right time? Even considering what’s been going on here for the last two years?
–
On the contrary, I think this is an ideal time. Many of our clients deal with financial resources that are devalued due to inflation. Stock prices are rising by default.
–
However, the value of the company has changed over the two years. In what direction?
–
Of course, the value of the company is lower due to the covid than it was before the covid. It is affected by the fact that we have not been able to function for two years. That’s probably why buy stocks. It is a unique opportunity. In the West, restaurant stock prices are rising in double digits.
–
In 2019, you had sales of 423 million, but in 2020 it fell to 250 million. What are they like now?
–
We are at the level of 2019. We have lost a few operations (the company closed five branches, note. red.), which we want to replace. That’s why we need money from the stock market to expand and exceed sales in 2019.
–
38 percent of the shares for 150 million
So what percentage of promotions do you offer and what do you want to receive?
–
We offer up to 38 percent of promotions and would like to receive 100 to 150 million from the sale.
–
You talked about expansion. So how big will the network of new cafes and how many pizzerias will you add?
–
Of the financial resources that we obtain thanks to the IPO, some are also used to cover existing, mostly bank, liabilities, and some are for development. As part of this development, we would open 30 to 50 Caffé Pascucci branches within two to three years.
–
We would like to be in the imaginary third place behind our two big competitors who are also listed on stock exchanges.
–
You wanted to go to the stock market as early as 2021, but then it was ruined by a pandemic. What makes the entry different than when you last planned it?
–
I think there are a few more opportunities today. During that time, a few competitors, a few restaurateurs, left us. They stopped working. The opportunity is even greater today, otherwise it can probably be said that it is the same.
–
Is this a good time to open cafes? I understand that people have to eat, but can they forgive their coffee?
–
The cafe is a meeting place. I think the generational trend is that today young people go to cafes rather than beer restaurants. If the cafe has good products, it will find its place.
–
So will you target the younger?
–
We were deciding who the ideal client is… But I think so. Our client is from 18 to 45 or 50 years old. Everyone likes good coffee.
–
You said you wanted up to 50 cafes. Do you already have those places?
–
We have no places. We have to wait for the money. It would be frivolous to contract places that we would not fill. And we believe that many cafes will be a form of franchising.
–
Nevertheless, I assume that you have to build something yourself, so that clients can see the concept…
–
We have already opened the first branch in the center of Prague in Kolkovna.
–
And how many branches do you start on your own?
–
We’d like it to be half and half. We will be the first to offer an international network of cafes in the form of a franchise. In the United States today, franchising accounts for 30 percent of the retail business. This is something that will only develop in the future.
–
How many new restaurants will you add?
–
In our plans, we had about ten restaurants within three years.
–
25 cafes and ten restaurants, will 150 million be enough for you to go to the stock market?
–
Certainly. As part of our plan, we are considering some EBITDA that will allow us to invest from our own resources during the year 2024 to 2025.
–
