TIDMMEX
RNS Number : 7076S
Tortilla Mexican Grill PLC
18 July 2022
18(th) July 2022
Tortilla Mexican Grill PLC
("Tortilla" or the "Group")
H1 2022 Trading Update
Further strong sales growth and continued strategic progress
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 3 July 2022 ("H1
2022", the "Period").
Highlights
-- Group revenue increased 60% when compared to the same period in 2019.
-- LFL revenue(1) increased 19% which is materially ahead of the
industry Peach Coffer Tracker benchmark reported at 5.6%(2) .
-- Strategic acquisition of Chilango for GBP2.75m, strengthening
the Group's position as the UK's leading fast-casual Mexican chain
and accelerating its expansion across the UK.
-- Continued roll-out with six new sites opened during the
Period, taking the total number of Group sites including the eight
acquired Chilango sites to 84 (H1 2021: 58).
-- Net cash of GBP3.1m as at 3 July 2022, enabling the Group to
effectively fund future expansion.
Tortilla achieved further strong top-line growth during the
first half of the FY22 financial year, delivering a 60% increase in
Group revenue to GBP26.9m (an increase of 55% excluding the impact
of the Chilango acquisition). This performance was underpinned by
growing customer demand for Tortilla's healthy and value-for-money
food as well as the Group's roll-out of new sites.
The Group completed the strategic acquisition of Chilango on 23
May 2022 for a total consideration of GBP2.75m, adding eight sites
to the Group's estate plus one delivery kitchen. The integration is
progressing well, and the acquisition strengthens the Group's
position as the UK's leading fast-casual Mexican chain and
accelerates its expansion across the UK to further capitalise on
growing consumer demand for healthy, convenient and customisable
cuisine.
During the Period the Group opened a further six sites: Bath,
Cheshire Oaks, Bournemouth, Portsmouth, Birmingham New Street, and
a delivery kitchen in Maida Vale. SSP Group also opened a Tortilla
site in Bristol Airport and the Group commenced a franchise
partnership with Compass Group with four sites trading.
All new sites are performing well and in line with expectations
since opening. These openings bring the total number of Tortilla
sites to 84 (H1 2021: 58 sites), with 41% of company-run sites
located outside of the M25. The Group remains on track to deliver
against the target outlined at the time of its IPO to open 45 new
sites over the coming years, with the eight sites acquired through
the acquisition of Chilango supplementary to this.
The Group's net cash position as at 3 July 2022 was GBP3.1m,
providing sufficient liquidity to effectively fund its future
expansion plans.
Outlook
As has been widely documented, the Period saw challenging
operating conditions across the restaurant sector, notably
significant levels of cost inflation, which became more pronounced
towards the end of the Period and these macro-economic headwinds
are expected to persist over the coming months. As ever, the
Group's full year profit performance will be weighted towards the
second half of the financial year.
As well as maintaining tight cost control, the Group has already
taken proactive and decisive steps to help mitigate against these
external pressures. This includes updating pricing, driving
operational efficiencies, and adopting a multi-platform delivery
proposition by partnering with Uber Eats and Just Eat, as well as
Deliveroo, to access more customers choosing to stay at home.
Notwithstanding the macro-economic backdrop, the Board remains
highly confident that Tortilla is well positioned in the
competitive landscape, underpinned by its reputation for great
value, strong delivery proposition, and successful roll-out
strategy.
Richard Morris, CEO of Tortilla, commented :
"We are pleased to report further strong growth and strategic
progress during the first half supported by our strong reputation
for great value and our growing UK presence. During the period we
sold more than 3.2m burritos and completed the exciting acquisition
of Chilango to bolster our leadership position in the UK's
fast-casual Mexican market. Chilango hold leases in several strong
London locations and provide a high-quality supplementary food
offer".
"We have continued to outperform the sector according to
relevant industry benchmarks and remain confident in the Group's
long-term growth prospects. Our site-roll out continues as planned
in line with the target set out at IPO, with further opportunities
supported by the favourable rental environment."
"Whilst the macroeconomic environment remains challenging, we
are working hard to mitigate cost pressures as much as we can and
are mindful of the impact on the consumer of the cost-of-living
crisis. However, we remain very confident that supported by our
strong reputation for outstanding value, excellent delivery
proposition, and growing UK presence we are well positioned for
long term growth."
The Group intends to announce its Interim Results for the six
months ended 3 July 2022 in mid-September 2022.
ENDS
(1) LFL revenue calculated on Group sales excluding Chilango
(acquired on 23(rd) May 2022)
(2) Average of available data points for Jan 22 - May 22,
restaurant sales.
ENQUIRIES
Tortilla Mexican Grill PLC Via Hudson Sandler
Richard Morris, CEO
Andy Naylor, CFO
Liberum Capital Limited (Nominated Adviser, Tel: 020 3100 2222
Sole Broker)
Andrew Godber
Edward Thomas
Nikhil Varghese
Hudson Sandler (Public Relations) Tel: 020 7796 4133
Alex Brennan tortilla@hudsonsandler.com
Lucy Wollam
Charlotte Cobb
For further information , visit tortillagroup.co.uk
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 had 84 sites
worldwide as of 3 July 2022, comprising 68 sites in the UK operated
by the Group, four sites franchised to SSP Group in the UK, four
sites franchised to Compass Group UK & Ireland and eight
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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END
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