Tortilla Mexican Grill PLC (AIM:MEX) told investors it expects FY25 adjusted EBITDA to be up to £2.5 million lower than previously indicated, after identifying accounting issues in its French business, though the burrito chain also pointed to stronger current trading in both the UK and converted French stores.
The restaurant chain said it now expects adjusted EBITDA, pre-IFRS 16, of around £1.5 million for the year to 28 December 2025.
Tortilla detailed that items of French operating expenditure had been recognised on the balance sheet during FY25, and potentially FY24, but had not been expensed through the profit and loss account in the relevant periods.
The adjustment does not affect FY25 cash flow or the previously reported adjusted net debt figure of £10.7 million, though the company said it could lead to retrospective covenant breaches.
It is now discussing possible waivers with its lender and said it has received increased facility headroom. Net debt was £11.4 million as of 26 April 2026.
UK adjusted EBITDA guidance remains unchanged at around £6.5 million. The company said trading had improved since the start of FY26, with UK like-for-like sales up 12.0% in the 20 weeks to 17 May 2026, helped by 7.5% in-store sales growth and a 25.0% rise in delivery sales.
In France, like-for-like sales at seven converted Tortilla stores rose 16.6% over the same period, while the group is cutting French head office personnel costs by about 50% and exiting underperforming Fresh Burritos sites.