Tortilla Mexican Grill
plc
H1 2024 Trading
Update
Strategic momentum builds as
Vital 5 pillars drive initial progress
24 July 2024
Tortilla Mexican Grill PLC, the
largest and most successful fast-casual Mexican restaurant group in
Europe, provides a Trading Update for the half year ended 30 June
2024 ("H1 2024", or "the Period")
Highlights
|
·
|
Revenue for H1 2024 £31.5m (down
£1.2m on last year), with like-for-like revenue down 5.9% due to
the strategic decision in Q1 to condense to a dual delivery
platform to improve profit conversion and increase focus on in
store revenue.
|
|
·
|
Adjusted EBITDA (pre-IFRS)[1]
£1.8m[2], in line with H1 last year
despite revenue drop.
|
|
·
|
Early signs of progress against the
Group's newly outlined strategic vision - the Vital 5 - set out in
April 2024:
|
|
|
·
|
Improve UK profitability
|
|
|
|
o
|
New, company-owned site in
Manchester's Arndale centre opened in May 2024; UK portfolio now at
81 sites including franchise sites.
|
|
|
|
o
|
Improved profitability on delivery
sales following switch to dual platform.
|
|
|
|
o
|
Stronger year-on-year profit
conversion underpinned by last year's supplier contract
negotiations.
|
|
|
·
|
Invest in brand to drive
growth
|
|
|
|
o
|
Successfully trialled food
improvements in Q2, now rolled out in stores and showing early
encouraging results.
|
|
|
|
o
|
Tortilla brand awareness has
increased to 23% Q1 2024 [3] up from 19% at Q1 last year following
strong focus on targeted marketing initiatives.
|
|
|
·
|
Invest in team and tech
|
|
|
|
o
|
New Food Director James Garland
joined in June 2024.
|
|
|
|
o
|
Six kiosk store conversions
completed so far this year following the success of the
London Wall conversion in August last year.
|
|
|
·
|
Double down on franchise
|
|
|
|
o
|
UK franchise stores continue to
excel with multiple sales records achieved this year across the
Group's partnerships.
|
|
|
|
o
|
Momentum of SSP and Compass
partnership roll-out continued with a new SSP site opened in Leeds
Train Station and a new Compass site opened in
Leicester.
|
|
|
·
|
Develop brand
internationally
|
|
|
|
o
|
Successful entry into Continental
Europe through strategic acquisition of Fresh Burritos announced on
25 June 2024 and completed on 1 July 2024.
|
|
|
|
o
|
Acquisition includes 13
company-owned leasehold sites in high quality locations in Paris
and other major French cities, and the rights to the Fresh Burritos
brand and a network of franchised locations.
|
|
|
|
o
|
The acquisition provides a
springboard for franchise growth across Europe.
|
|
·
|
Group net debt (pre-IFRS 16) of
£3.3m at Period end, in line with expectations following
approximately £0.9m of costs and partial consideration paid for the
Fresh Burritos business.
|
|
|
|
Outlook
Through our new strategy, the
Group is in the process of executing several exciting key
strategic initiatives to drive sales growth and profitability,
building on previously implemented profit drivers such as the dual
delivery strategy. The early results are encouraging,
however, the benefits of these initiatives will be slower than
originally anticipated, and this combined with an ongoing
challenging trading environment, means the Board now expects
Adjusted EBITDA (excluding the recent Fresh Burritos acquisition)
to be £5.0m for 2024. A revised combined outlook, including
Fresh Burritos, will now be Adjusted EBITDA of £4.5m and the
year-end net debt position is expected to correspondingly increase
to c.£7.5m.
Andy Naylor, CEO at Tortilla commented:
"We are now seeing the positive implementation of
our strategy across all five pillars as we continue to strengthen
Tortilla's offering and position the business to capitalise on the
long-term significant opportunities in our market as the dominant
European market leader in fast-casual Mexican cuisine.
In the first half of 2024, we have
significantly improved the quality of our food and are driving
exciting innovation with our new Food Director, James Garland now
onboard. We have accelerated the deployment of kiosk-ordering
technology and will be launching our new loyalty platform at the
beginning of August. Whilst the timing of these initiatives
has been slower than planned, the early signs are positive, and we
look forward to updating shareholders on progress in
September."
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 Houston
|
|
Andy Naylor, Chief
Executive Officer
|
|
|
Maria Denny, Chief Financial
Officer
|
|
|
|
|
|
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
|
|
|
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 80+ UK locations, 30+ in France and 8 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