REG - Tortilla Mexcn.Grill - FY & Q4 Trading Update

Tortilla Mexican GrillAnnouncement

09/01/2023 07:00

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RNS Number : 9973L  Tortilla Mexican Grill PLC  09 January 2023

9 January 2023

Tortilla Mexican Grill PLC

("Tortilla" or the "Group")

FY & Q4 Trading Update

FY22 performance in line with market expectations* supported by Q4 UK LFL
revenue growth of 16.0%

Tortilla Mexican Grill PLC, the largest and most successful fast-casual
Mexican restaurant group in the UK, provides a Trading Update in respect of
the financial year ended 1 January 2023 (the "Period").

Financial Highlights

·   Tortilla's performance remained highly resilient throughout the year, in
the face of ongoing macroeconomic challenges. This was driven by the ongoing
strength of our customer proposition and demand for our sector-leading brands,
alongside the continued expansion of our site portfolio in line with our
long-term growth strategy.

·     Group revenue increased 20% to £57.7m (FY21: £48.1m; FY20:
£26.8m):

o  FY22 UK LFL revenue increased 16.4% vs. FY19.

o  Growth driven by a net increase of 18 sites in FY22, taking the Group
total to 82 at Period end.

·    Trading since our last update in early October has been strong with
Q4 UK LFL revenue growth (vs. FY19) of 16.0%. This was despite challenging
trading conditions in December due to the combined impact of poor weather and
multiple train strikes. Some favourable changes in input costs, together with
actions taken by management and the strong trade in the majority of the fourth
quarter give the Board confidence that FY22 revenue and profit will be in line
with market expectations*.

Strategic Highlights

·     FY22 was a year of significant growth and strategic progress for
Tortilla:

o  New sites were opened across the UK at an ambitious but disciplined rate,
taking advantage of the favourable rental market. New openings in 2022 have
continued to perform strongly, with Durham and Canterbury opened most
recently.

o  Strategic acquisition of Chilango in May 2022 strengthened the Group's
market position in London and added a complementary premium brand. Eight
stores were added to the portfolio; five of these sites were rebranded to
Tortilla and three continue to trade under the Chilango brand.

o  Commenced new franchise relationship with Compass Group plc within the
Higher Education sector, with five sites now open.

·    Delivery demand remained stable as the Group expanded and diversified
delivery partners to now include Uber Eats, Just Eat and Deliveroo. The Group
also expanded with delivery kitchen partners Growth Kitchen and Karma Kitchen,
with these sites performing well and further growing the reach of the Tortilla
brand.

·   Several new franchise sites are in the pipeline for 2023, which will
enhance the diversity of our locations, including the expansion of our
existing partnership with Compass Group plc, and further planned openings at
rail stations with SSP Group plc.

·     Strong cash position remains, enabling the Group to self-fund its
site rollout growth strategy.

 

Current trading and outlook

Despite the ongoing uncertainties impacting the market and wider sector in the
short term, LFL sales growth in Q4 remained strong and we remain confident of
finding efficiencies in our supply chain to aid profitability.

We have an outstanding brand and customer proposition, which continues to be
in high demand across all our sites, and we have a strong pipeline of new site
openings. New sites set to open in FY23 include Derby and Greenwich (London)
in the spring, with a healthy pipeline of further openings planned for later
in the year.

The Board remains confident in the outlook for FY23 and beyond, and the
Group's ability to continue to implement its proven growth strategy.

 

Richard Morris, Chief Executive Officer of Tortilla, commented:

"We have a proven and highly popular customer proposition. During difficult
economic times, restaurants that offer great, consistent food at competitive
price points will be the winners, and we sit comfortably in this space.

"We continued to achieve excellent strategic progress during 2022, in line
with our long-term growth strategy. We have successfully opened a number of
new sites across the UK - including Durham, Coventry, Canterbury and Leicester
- showing the excellent demographic diversity in which the brand can operate.
This is further testament to the nationwide popularity and appeal of our
brand. We have also strengthened our market position in London through our
strategic acquisition of Chilango.

"Looking ahead, we remain as motivated and enthusiastic as ever about
Tortilla's significant organic growth opportunities in the UK, with the added
excitement of growing our already successful franchise partnerships both in
the UK and abroad."

 

* Company-compiled consensus (FY22: revenue £58.4m, Adjusted EBITDA £4.0m)
(FY23: revenue £69.8m, Adjusted EBITDA £5.0m). Adjusted EBITDA defined as
statutory operating profit before interest, tax, depreciation and amortisation
(before application of IFRS 16 and excluding exceptional costs) and reflects
the underlying trading performance of the Group.

Note - all figures are subject to FY22 audit

 

ENQUIRIES

 Tortilla Mexican Grill PLC                                Via Hudson Sandler
 Emma Woods, Non-Executive Chairwoman
 Richard Morris, CEO
 Andy Naylor, CFO

 Liberum Capital Limited (Nominated Adviser, Sole Broker)  Tel: 020 3100 2222
 Andrew Godber
 Edward Thomas
 Nikhil Varghese

 Hudson Sandler (Public Relations)                         Tel: 020 7796 4133
 Alex Brennan                                              Tortilla@hudsonsandler.com (mailto:Tortilla@hudsonsandler.com)
 Wendy Baker
 Charlotte Cobb

 

For further information, visit tortillagroup.co.uk
(https://tortillagroup.co.uk/)

 

 

NOTES TO EDITORS

About Tortilla Mexican Grill plc

Tortilla is the largest and most successful fast-casual Mexican restaurant
group in the UK specialising in the sale of freshly made Californian-inspired
Mexican cuisine. The Group has 82 sites worldwide, comprising 65 sites in the
UK operated by the Group, 4 sites franchised to SSP Group in the UK, 5 sites
franchised to Compass Group UK & Ireland and 8 franchised sites in the
Middle East.

The Group was founded in 2007 by Brandon Stephens, originally from California
who, upon his arrival in London in 2003, found it difficult to satisfy his
desire for quality burritos and tacos. As a result, Brandon established
Tortilla with a mission of offering customers freshly prepared, customisable,
and authentic Californian-inspired Mexican food.

The brand is synonymous with an energetic, vibrant culture, and with providing
a great value-for-money proposition. It embraces fast-growing sector trends
(including eating out, healthy eating, provenance, ethnic cuisine, delivery)
across a variety of locations, through a differentiated product offering which
is popular with a broad customer base, and a clearly defined multi-channel
marketing strategy. It benefits from flexible site locations and formats, and
a scalable central infrastructure.

 

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