Tortilla reports record revenue driven by new site openings, current trading remains strong with ‘healthy pipleline’ of openings for later in 2023: Tortilla, the UK’s largest fast-casual Mexican restaurant brand, has reported record revenue for the year ending 1 January 2023, driven by new site openings and up 16% on pre-pandemic levels. Revenue for the period increased by 20.0% to a new record of £57.7m (FY21: £48.1m), with like-for-like revenue up 16.4% versus 2019. Adjusted Ebitda (pre-IFRS 16) was £4.0m (FY21: £8.7m), with 2021 having, notably, included £3.9m of VAT benefit. Gross profit margin was 76.4% (FY21: 79.6%) and net debt was £0.6m (FY21: net cash of £6.7m). The year saw a record 18 sites (net) added to the group’s portfolio, increasing the total number of sites to 82 at the period end. Of these, ten group-operated sites were added in the UK, as it took advantage of “favourable property rental market”. Five franchise sites also opened in universities through new partnership with Compass Group, and a further airport site opened at Bristol through a franchise partnership with SSP Group. The acquisition of Chilango in May 2022 also strengthened the group’s market position in London, with five of eight new sites converted to Tortilla branding and three remaining sites refurbished post-acquisition. A relaunched Tortilla Club grew the loyalty programme by circa 40% to more than 280,000 members, while the group expanded successful partnerships with Deliveroo, Uber Eats and Just Eat alongside striking new partnerships with Growth Kitchen and Karma Kitchen. Current trading is also in line with expectations, with like-for-like sales growth for the eight weeks to 26 February 2023 up 4% versus FY22 (up 11% when adjusted for VAT). The group said action taken by management across the supply chain to manage costs and aid profitability, including a utility bills hedge from April to September 2023, has provided certainty for the majority of the current financial year, while food cost inflation rates have “largely plateaued”. New sites opened in the first quarter of, in Derby and Greenwich (London), have seen “encouraging early trading”, with a healthy pipeline of further openings planned for later in the year, including in Milton Keynes, Belfast and Bracknell. It is also exploring several new franchise sites for 2023, including through the expansion of existing partnership with Compass Group, and further planned openings at rail stations with SSP Group. Technology investments to enhance customer service and reporting efficiencies, and to better support the group’s growth strategy and customer loyalty, are also planned. Tortilla chief executive Richard Morris said: “We have a proven, great value, and highly popular customer proposition and these strengths continued to underpin our good levels of like-for-like growth and further strategic expansion during 2022. More and more consumers are seeking out high-quality, healthy, customisable food at great value, and both of our brands – Tortilla and Chilango – sit at the heart of these exciting consumer trends. The strong performances of our restaurants up and down the country as well as the success of new openings in the likes of Lincoln, Coventry, Canterbury, and Leicester once again demonstrate the very broad appeal of our proposition and the demographic diversity in which we operate and succeed. As well as our continued expansion across the UK, we further strengthened our market position in London through our strategic acquisition of eight Chilango restaurants in the first half of the year. We successfully converted five of these to the Tortilla brand and have refurbished the three remaining Chilango sites. All these sites are benefiting from increased footfall in London. The beginning of 2023 has started well with like-for-like sales up 4% in the eight weeks to 26 February. We know that restaurants that offer great, consistent food at competitive price points will always be the winners in our sector, and we are confident that we sit very comfortably in this space. We remain highly motivated and excited about Tortilla’s continued growth potential in the UK as well as our opportunities to build on our proven franchise operations to expand overseas.”
Tortilla features in the Propel Turnover & Profits Blue Book. Its turnover of £57.7m is the 112th highest in the database. The Blue Book ranks companies by turnover, profit and profit conversion, listing directors’ earnings for the past five years. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email jo.charity@propelinfo.com to upgrade your subscription.
Four days to go before release of updated Premium Database of Multi-Site Companies, 22 businesses being added: A total of 22 new multi-site companies, operating 92 sites, have been added to the next edition of the Propel Premium Database of Multi-Site Companies, which will be released on Friday (31 March), at midday.
The updated Propel Multi-Site Database, which is produced in association with Virgate, includes regional restaurant operators, growing bakery brands, and expanding hotel operators. Premium subscribers will also receive a 2,000-word report on the new additions to the database. The comprehensive database is updated monthly and provides company names, the people in charge, how many sites each firm operates, its trading name and its registered name at Companies House if different. The database now features 2,811 companies. Premium subscribers will also receive the next edition of the
New Openings Database on Thursday, 6 April, at midday. It focuses on newly announced openings and upcoming launches in the sector and is updated every month. The next edition also includes a 6,000-word report on the new additions to the database. Premium subscribers also receive access to three other databases: the
Propel Turnover & Profits Blue Book; the
UK Food and Beverage Franchisor Database; and the
Who’s Who of UK Food and Beverage. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email
jo.charity@propelinfo.com to upgrade your subscription. Premium subscribers are also to be given exclusive access to the recording and slides to Propel Multi-Club Conferences. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before; regular video content and regular exclusive columns from Propel group editor Mark Wingett.
Oakman Group appoints new CFO: The Oakman Group has appointed Tarquin Williams as its new chief financial officer (CFO). The former CFO of The City Pub Group managed CPG’s listing on the AIM market through an IPO and helped guide the PLC through the pandemic, reducing cash burn, strengthening the company’s balance sheet, and securing its refinancing options. Before that, he was a Fullers Inns retail board member, managing financial oversight of the entire retail operation. More recently, he has been acting as interim CFO for Cirrus Inns, to oversee its merger with The Liberation Group, creating an estate of 79 managed pubs. Oakman chief execurtive, Peter Borg-Neal, said: “I am very pleased to announce that Tarquin has joined us as CFO today. He inherits a post which is responsible for a turnover of approximately £72m from an operational estate of 40 pubs with a great reputation on so many fronts. Tarquin has an excellent track record in our sector, having cut his teeth with Fullers before leading the successful City Pub Group IPO. His appointment reflects our bold business ambition and I look forward to working with Tarquin in the coming years.” Williams added: “I am delighted to be joining Peter, Dermot and the team at the Oakman Group and look forward to continuing their great work in building a first-class estate of inns and restaurants across England. The group is well positioned to navigate the current challenges facing the hospitality industry and to take advantage of opportunities as the trading environment continues to improve.”
Laurence Keen steps down as Tortilla NED: Laurence Keen has stepped down as non-executive director at Tortilla, the UK’s largest fast-casual Mexican restaurant brand. Keen, the brand’s senior independent director, will not seek re-election at the company’s annual general meeting in May 2023, having taken on the role of leading the expansion of Hollywood Bowl Group in Canada. Francesca Tirtiello, who joined the board as a non-executive director in September 2022, will take over as chair of audit. Emma Woods, chair of Tortilla, said: “The board is very grateful to Laurence for his expertise and support since the group’s IPO in 2021, and we wish him all the best for the future. We have begun recruitment for a new non-executive director who will chair the remuneration committee and look forward to updating shareholders when an appointment has been made.” Keen told Propel earlier this month that Hollywood Bowl was aiming to grow its Canadian estate more than four-fold after securing its tenth site in the country.
NTIA welcomes new laughing gas laws: The Night Time Industries Association has welcomed new laws making the possession of laughing gas a criminal offence for the first time. The government has announced that there will also be tighter controls on retailers to prevent the supply of nitrous oxide for misuse. Nitrous oxide, sold in metal canisters, is one of the most-used drugs by UK 16 to 24-year-olds. It is already illegal to produce or supply the gas for its psychoactive effects under the Psychoactive Substances Act 2016, but not possession of it. The change is part of a prime minister Rishi Sunak’s crackdown on anti-social, set to be announced today (Monday, 27 March). “We welcome the announcement by the government that nitrous oxide is set to be banned under new government plans to clamp down on anti-social behaviour,” said NTIA chief executive Michael Kill. “The industry has faced a long-standing battle with the sale and use of this drug, with the current legislation leaving licensees and authorities powerless to tackle the problem. Businesses have been put under immense pressure by Police, local authorities and residents as a result of streets being littered with silver canisters, exposing staff and customers to petty crime, anti-social behaviour and organized crime gangs. The intervention by the government has come at a critical time, as businesses in major cities across the UK have seen the challenges around nitrous oxide escalate dramatically in the last six-12 months.”
Five years for families’ spending power to recover to pre-pandemic levels: Families will have to wait five years for their spending power to recover to pre-pandemic levels, the head of the Treasury watchdog has warned. Richard Hughes, chairman of the Office for Budget Responsibility, told the BBC that incomes would start to recover in the next three to four years. But he added that it would take longer to bounce back to levels seen before the onset of covid-19. “It’s still the case that people’s real spending power doesn’t get back to the level it was before the pandemic even after five years, even by the time we get to the late 2020s,” he said. Hughes claimed that Brexit had contributed to the UK’s struggles, saying it had caused economic damage on the same magnitude as the pandemic and the recent surge in energy prices. He estimated Britain’s overall output has reduced by “around 4% compared to had we remained in the EU”. Hughes added: “We’ve lost around 500,000 people from the labour force, we’ve seen stagnant investment since 2016 and also our productivity has slowed dramatically since the financial crisis and not really recovered.”
Sacha Lord calls for Ofgem chief to resign if ‘over-inflated’ energy contracts are not torn up: Sacha Lord has called for Ofgem chief Jonathan Brearley to resign if “over-inflated” energy contracts are not torn up. From the end of this week, the government’s support with energy bills for businesses will be drastically reduced after no extension to the relief was announced in the spring Budget. Although no sector business will remain unscathed, those set to be worst hit will be those “pressured into signing over-inflated contracts” and subsequently “paying well over the odds”. Lord, the night time advisor for Greater Manchester, tweeted: “This week, energy support ends for hospitality. Most operators were scared and pressured into signing over-inflated contracts and are now paying well over the odds. The energy cos are now reporting record high profits. @ofgem needs to insist these contracts are now torn up. If they don’t they will be responsible for many closures and job losses. If they don’t, the CEO of @ofgem Jonathan Brearley should resign from his £300,000 a year job.”
Derbyshire chip shop to close after 63 years due to cost-of-living crisis: A Derbyshire chip shop has announced it will close for good after 63 years due to the cost-of-living crisis. Dennis Jackson said he will hang up his apron for the last time on 8 April at Jackos, which first appeared in Market Street in Ilkeston in 1961 before moving to its current location, further down the same road, in 1982. Jackson, 84, told the BBC his decision to close was mainly financial, as well as partly age-related. “Fish and chips should be the cheapest meal out, but it’s a struggle for a lot of people,” he said. “My fish costs went up double in 2022. I’ve been quoted for my gas, and it’s quadrupled. It’s another £300 to find. Anybody can stand here and give the stuff away, but you still need to make a bit of profit at the end of the day. What I’d like to say to the town is thanks for having me – my customers are the best in the world.”
