REG - Fulham Shore PLC - Trading Update

Fulham ShoreAnnouncement

04/04/2022 07:00

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RNS Number : 0583H  Fulham Shore PLC (The)  04 April 2022

4 April 2022

 

The Fulham Shore PLC

("Fulham Shore", the "Company" or the "Group")

 

Trading Update

 

The Board of The Fulham Shore PLC is pleased to provide an update on trading
ahead of the publication of the Company's results for the year ended 27 March
2022.

Trading Update

Following the removal of all restrictions in February 2022, customers have
continued to return to the Group's restaurants in increasing numbers,
reflecting the fantastic quality and value of the Franco Manca and The Real
Greek propositions.

During the second half of the financial year both Franco Manca and The Real
Greek businesses delivered strong underlying performances. This was achieved
despite periods of disruption, including the UK government's guidance to work
from home due to the Omicron variant.

The Group also made excellent progress against its UK expansion plans by
opening 10 new restaurants, including Franco Manca pizzeria in Blackheath and
Baker Street in London, and sites in Bishops Stortford and Cheltenham. The
Real Greek opened three new restaurants in Bluewater Kent, Corn Exchange
Manchester and The Trafford Centre Manchester, all of which opened in the
second half, were received very well by customers and have enjoyed strong
trading momentum since opening.

In line with Fulham Shore's international strategy, two franchised Franco
Manca restaurants were also opened during the period, in Athens, Greece.

Input costs rose throughout the year due to increased transportation costs,
raw materials and the impact of Covid-19 disruption. However these were
mitigated through small price increases and generated better results than the
Board had previously anticipated at the half year.

This strong trading momentum and expansion drove a significant increase in
revenue, comparable with the levels seen pre COVID-19. As a result, the Board
expects to report that revenue, EBITDA and Adjusted Headline EBITDA for the
financial year ended 27 March 2022 will be ahead of last year's figures and
comfortably ahead of market expectations.

Fulham Shore believes that market expectations for the year ending 27 March
2022 are currently revenue of £73.4m, EBITDA of £16.5m and Adjusted Headline
EBITDA of £9.5m.

Definition of EBITDA and Adjusted Headline EBITDA can be found on page 56 of
the FY2021 Annual Report.

Cash and bank facilities

The Company's net cash position before lease liabilities recognised under IFRS
16 as at 25 March 2022 was £4.0m (2021: net debt of £3.6m). The Group has
undrawn bank facilities of £15.9m.

Planned openings have been and will continue to be financed primarily by
internally generated cash flow. It should be noted the Group improved its cash
balance through this financial year despite opening 10 restaurants.

Dividend policy

In parallel with this expansion programme, and subject to sufficient cash
generation within the business, the Board is still considering formulating a
dividend policy during the coming financial year, reflecting the Board's
continued confidence in the outlook for Fulham Shore. This decision will
depend on geo-political events, our trading patterns and UK economic
conditions.

Current trading and outlook

A 24(th) The Real Greek restaurant is within days of opening in Newcastle. 5
new Franco Manca pizzeria are in development, in Stockbridge Edinburgh (our
second in that city), Kingston upon Thames, Canterbury, and in Manchester,
both on King Street and in Didsbury.

The Group continues to secure desirable sites at favourable rents, supported
by high vacancy rates and lower rents than at the peak levels seen in 2019. 19
proposed new Franco Manca sites are in legal negotiations and are planned to
open in the summer and autumn of 2022. The Real Greek is also in legal
negotiations for 5 new sites around the country.

The outlook for costs, be they utilities, raw ingredients or labour presents
challenges for all operators within the sector. In addition, the reduced VAT
rate and hospitality business rates relief both ended on 1 April 2022. Thanks
to its brands' affordable, value-for-money proposition, the Group is well
placed to offset these increased costs through increased menu pricing, which,
when they occur, will be implemented to cover costs rather than increase
margin.

As customer numbers continue to grow and trading continues to be robust, the
Group plans to open around 18 new restaurants across both brands in the
financial year ending March 2023 and will review this opening programme at the
half year.

The Board is very encouraged by the strong performance achieved by the Group
during FY22 and underpinned by its two relevant businesses, their
value-for-money propositions and the clear growth opportunities, remains
confident of its exciting potential.

Fulham Shore will announce full year figures around the end of July 2022.

 

 

For further information, please contact:

 

 The Fulham Shore PLC                                     www.fulhamshore.com (http://www.fulhamshore.com/)
 David Page / Nick Wong                                   Via Hudson Sandler

 Singer Capital Markets (Nominated Adviser & Broker)      +44 (0) 20 7496 3000

 Shaun Dobson / James Moat / Kailey Aliyar

 Hudson Sandler - Financial PR                            fulhamshore@hudsonsandler.com (mailto:fulhamshore@hudsonsandler.com)

 Alex Brennan / Lucy Wollam                               Telephone: 020 7796 4133

 

 

Notes for editors

Information on The Fulham Shore PLC

 

Fulham Shore owns and operates "The Real Greek" (   www.therealgreek.com
(http://www.therealgreek.com/)   ) and "Franco Manca"
(   www.francomanca.co.uk (http://www.francomanca.co.uk/)   )
restaurants.

 

Fulham Shore was incorporated in March 2012. The Directors believed that there
were attractive investment opportunities within the restaurant sector in the
UK and that, given their collective experience in the restaurant sector, they
could take advantage of the opportunities which existed.

 

The ordinary shares of the Company were admitted to trading on AIM in October
2014 in order to capitalise on such opportunities and to give the company
employees, customers and public the ability to share in the enterprise.

 

The Real Greek

Since its foundation in London in 1999, The Real Greek group has grown
steadily, now offering modern Greek cuisine in 23 restaurants primarily in
London and Southern England but with restaurants across the UK (e.g.
Manchester and Norwich).

 

The Real Greek food centres on the delicious, healthy diet of the Eastern
Mediterranean, staying true to the Greek ethos of food, family and friends.
Dishes are created using premium ingredients sourced from Greece and Cyprus
whenever possible, and developed by Tonia Buxton, the face of Greek food in
the UK.

 

The Real Greek's menu and atmosphere retain the spirit of eating in Greece,
encouraging diners to take their time eating amongst friends and family, be it
a relaxed dinner, family get-together, or a fully catered party.

 

Franco Manca

Franco Manca opened its first restaurant in 2008 and now has 59 restaurants,
primarily in London, but also with restaurants across the UK (e.g. Edinburgh,
Glasgow, Manchester, Leeds, Cambridge, Bath, Oxford, Bristol and Exeter).

 

Franco Manca's pizza is made from slow-rising sourdough and is baked in an
oven that produces high heat. The slow levitation and blast cooking process
lock in the flour's natural aroma and moisture, giving a soft and easily
digestible crust. Where possible, locally sourced and organic ingredients are
used.

 

Franco Manca has received the following accolades:

 

Winner of Peach 20/20's Consumer Choice Award at the 2021 Hero & Icon
Awards

Winner of the Casual Dining Best Family Dining Experience Award 2020

Winner of the R200 Best Value Restaurant Operator- Over 20 Sites Award 2019
and 2017

 

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