Tortilla Mexican Grill PLC (AIM:MEX), the fast-food company, remained buoyant on Tuesday after it said it expects full-year profits to be in line with expectations, with a series of new initiatives being launched to help improve trading in the next financial year.
New schemes such as the management initiative, which is aimed at improving the energy and productivity of employees, are expected to help increase adjusted EBITDA margins by 1.3 percentage points, while menu developments, targeted events and cost savings are allowing for resilient trading.
New openings, like sites in Belfast and Bracknell, have been performing positively over the summer, with the Northern Irish chain’s sales doubling what had previously been expected.
Going forward, Tortilla is considering opening three more sites in the second half of the financial year, bringing the overall additions in 2023 to eight.
Richard Morris, CEO of Tortilla, said in the company’s interims: “With our outstanding food offer, excellent value for money and great service, alongside our adaptable and resilient business model, we remain well placed to continue expanding our UK network whilst taking the brand into new markets, particularly in Europe."
Franchising in the UK and abroad has been one area of success for the group, which claims trading in these sites has normalised post-Covid and is now providing record profits.
Revenues in the first half jumped 22% to £32.7 million, with like-for-like sales rising at a faster rate than CGA’s industry benchmark.
However, underlying earnings did slip back from £2.5 million to £1.8 million, leading to a pre-tax loss of £0.6 million, albeit backed up by a strong balance sheet with net debt of £1.6 million and £7 million in existing finance facilities.
Shares in Tortilla are around 0.5% down, having opened at around 65p.