REG - Tortilla Mexcn.Grill - H1 2023 Trading Update

Tortilla Mexican GrillAnnouncement

17/07/2023 07:00

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RNS Number : 1457G  Tortilla Mexican Grill PLC  17 July 2023

 

 

 

 

 

 

17 July 2023

Tortilla Mexican Grill plc

("Tortilla" or the "Group")

 

H1 2023 Trading Update

 

Resilient trading supports FY 2023 expectations(1)

 

Tortilla Mexican Grill plc ("Tortilla"), the largest and most successful
fast-casual Mexican restaurant group in the UK, provides a Trading Update for
the half year ended 2 July 2023 ("H1 2023", the "Period").

 

Highlights

 

·    Group revenue increased by 22.0% to £32.7m (H1 2022: £26.9m),
illustrating growing demand for the Group's high-quality, value-for-money
customer proposition.

 

·    Continued industry outperformance with Group LFL revenue increasing
by 8.4% (adjusting for FY 2022 VAT benefit), ahead of the industry Peach
Coffer Tracker benchmark(2).

 

·    Franchise sites performed very well with record sales being achieved
in all SSP locations. Further franchise sites in the pipeline to expand on the
success.

 

·    Continued delivery against strategic expansion of the Group's estate
with new site openings during the Period in Derby and Greenwich alongside an
additional SSP franchise site at Manchester Piccadilly, all performing well
since opening. In total, there were 85 sites at end of the Period operating
under the Tortilla and Chilango brands (82 at end of FY22).

 

·    First Tortilla in Northern Ireland set to open this week in Belfast,
with another in Bracknell in coming weeks.

 

·    Net debt (pre-IFRS 16) of £1.6m as at 2 July 2023, in line with
expectations.

 

Outlook

 

The Group continues to deliver strong strategic progress and achieve good
levels of revenue growth. While the widely publicised economic pressures
impacting the sector remain, management has successfully implemented several
efficiency and cost-saving initiatives including utilities hedging that are
supporting Group profitability and these will continue in the second half. The
Board is also pleased to report some easing of cost inflation in relation to
certain key food ingredients.

 

In addition, the Group has delivered a number of new strategic initiatives to
continue to grow demand including driving evening trade through the new
'Tortilla Sunsets' menu and 'Happy Hour' offers.

 

The Board remains confident in the Group's ability to deliver FY 2023 results
in line with market expectations(1).

 

Richard Morris, CEO of Tortilla, commented:

 

"We are pleased to have delivered good revenue growth and further strategic
progress in the first half. Our strong LFL sales growth has been ahead of
industry comparatives reflecting the appeal of our high quality, healthy and
customisable great value propositions.

 

We continue to deliver on our disciplined but ambitious approach to new site
openings and strategic expansion, with all of our new openings performing well
and meeting our expectations. Our franchise sites also continue to perform
well with our SSP sites achieving record results and we remain hugely excited
by the significant franchise growth opportunities in the UK and overseas."

 

The Group intends to announce its Interim Results for the six months ended 2
July 2023 in mid-September 2023.

 

ENDS

 

(1) Company-compiled consensus: 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)

(2) Average of the 26-week period ended June 2023 reported by CGA Peach was
4.6% (restaurants-only) compared to 5.0% for Tortilla (both sets of numbers
reported without Q1 2022 VAT adjusted)

 

 

ENQUIRIES

 

 Tortilla Mexican Grill PLC                                 Via Hudson Sandler
 Emma Woods, Non-Executive Chair
 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

 

NOTES TO EDITORS

 

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. As at 1 January 2023, the Group had 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 arrived in London in 2003 to find a gap in the market 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 Tortilla and Chilango brands are synonymous with an energetic, vibrant
culture, and with providing a great value-for-money proposition. They embrace
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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