REG - Tortilla Mexcn.Grill - Trading update

Tortilla Mexican GrillAnnouncement

10/12/2024 07:00

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RNS Number : 4094P  Tortilla Mexican Grill PLC  10 December 2024

 

 

10 December 2024

Tortilla Mexican Grill plc

("Tortilla", the "Group" or the "Company")

Trading update

 

Tortilla Mexican Grill PLC, the largest and most successful fast-casual
Mexican restaurant group in the UK and Europe, provides a Trading Update for
the financial year ending 29 December 2024 to date ("FY24" or the "Period").

 

Highlights 1 

 

UK

 

 ·       The revenue for the UK business 2  is forecast to exceed previous guidance
         with a range of £64.0-£64.3m now expected.  This follows the continuation
         of the strong sales recovery for the UK business which has further accelerated
         following the successful execution of the "Vital 5" strategic plan at the
         beginning of April 2024.
 ·       The UK LFL in-store sales 3  performance continues the strong recovery, from a
         decline of (4.2%) in Q1 and (2.7%) in Q2 to a position of growth in Q3 of
         +0.6% followed by a strong Q4 of at least +4%.
 ·       Encouragingly for Tortilla, the CGA Coffer benchmark in those same periods got
         progressively worse - from +2.2% in Q1 to +0.6% for Q3.

 

FRANCE

 

 ·       The management team for France is now fully recruited and the central kitchen
         in Lille is almost fully built and will be operational from January 2025.
 ·       We have chosen to delay the conversion to rebrand the restaurants whilst we
         have been working through a brand and interior design refresh initiative,
         which will aid not only France but also ultimately the UK.  Whilst the
         phasing of the delivery of our French strategy will impact our French
         profitability in 2025, with a new much improved brand proposition we feel more
         confident of achieving our longer-term goals in this market.

 

GROUP

 

 ·       Group FY24 trading is in line with management expectations.
 ·       Adjusted net debt 4  at FY24 period end is expected to be £7.3m.

 

 

CEO statement

 

We are delighted to report that we have gained further momentum in the UK,
with a strong Q4 sales performance.  We have had an incredibly busy eight
months, working on numerous initiatives which form part of our Vital 5
strategy: we have overhauled our food offer, recruited a new Food Director,
successfully landed our first limited time offers in many years, purchased new
equipment enabling us to sell better quesadillas all day, launched a new
loyalty system, implemented self-ordering kiosks across 11 additional
restaurants and transformed the internal culture to focus on career
development. We will also further expand our partnership with SSP with
openings of Tortilla units in both Stansted airport and Liverpool Street train
station in the coming weeks.

 

We completed the acquisition of our largest European competitor, Fresh
Burritos, in July 2024.  Since acquisition, we have successfully built the
central team to run this business and have nearly completed our building works
in our central kitchen in Lille to get this facility operational from January
2025.  Our decision to revise the timing of the store rebranding, whilst
causing a short-term profit impact in FY 25, is, we believe, the right
long-time decision to ensure the success of the acquisition. We have
confidence in the long-term project underway in France, which should also
provide a base for further expansion in Europe in due course.

 

We are pleased with our achievements this year and I want to thank all the
team for all their hard work, enthusiasm and drive which has helped us deliver
some significant goals.  I look forward to working with the team to deliver
further positive achievements in FY25, building on our Vital 5 strategy
initiatives.

 

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.

 

ENQUIRIES

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

 Andy Naylor, CEO
 Maria Denny, CFO

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

 Houston (Public Relations)                                Tel: 0204 529 0549 Tortilla@houston.co.uk (mailto:Tortilla@houston.co.uk)
 Kate Hoare

 Kelsey Traynor

 Ben Robinson

About Tortilla Mexican Grill plc

Founded in 2007 by a San Francisco duo, Tortilla is the Europe's largest
fast-casual Mexican restaurant brand. With 79 UK locations (of which 11 are
franchise stores), 29 in France (of which 16 are franchise stores) and 9
franchise stores in the Middle East, Tortilla serves 7 million+ meals
annually, offering authentic California-style burritos, tacos and salads.

Through the acquisition of Chilango in the UK in 2022 and Fresh Burritos in
France in 2024, as well as franchise partnerships with SSP Group plc, Compass
UK & Ireland and Eathos, the brand continues to expand globally.

Tortilla breaks the mold of typical takeaways, combining quick service with
quality ingredients to serve affordable, made-to-order meals in under 90
seconds, in cosy environments fitting for lunch or dinner and a beer with
friends. The menu is fully customisable - there are thousands of flavour
combinations to try - with produce that's fresh, never frozen, 70% plant-based
and vegan-friendly, higher welfare meats and free from artificial flavours or
preservatives.

Emphasising sustainability, Tortilla only uses recycled and recyclable
packaging, 100% renewable electricity and sends zero waste to landfill.

Headquartered in London, Tortilla employs over 1,300 people.

More details at tortillagroup.co.uk

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 1  All figures are subject to FY24 audit

 2  UK business includes the revenue from the Group's Middle East franchising
arrangement, as well as the Group's UK revenue (as reporting previously)

 3  Defined as the percentage change in like-for-like sales compared to FY23

 4  defined as net debt / cash excluding lease liabilities arising from
application of IFRS 16.

 

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