Fulham Shore bucks the trend as profits rise; considers further expansion
Franco Manca and The Real Greek owner Fulham Shore posted a jump in interim pre-tax profit on Wednesday and said it is considering extending its opening programme beyond the current financial year.
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In the six months to 23 September, pre-tax profit rose 35% to £1.5m on revenue of £33m, up 20% from the same period a year ago. Meanwhile, headline earnings before interest, tax, depreciation and amortisation were up 1.4% to £4.6m and net debt fell to £8.9m from £12m at the last year-end.
The performance was driven by further restaurant openings during the period and increased customer numbers at the company's existing sites.
During the half, Fulham Shore opened two Franco Manco pizzerias, one in Bath and the other in Cambridge, both of which have been busy since opening. Since the period end, it has also opened a Franco Manco near Aldwych in London.
The group said its 58 strong restaurant estate performed well, driven by new menu initiatives, including vegan and gluten-free options, investment in digital channels and its policy to keep menu prices at "everyday value-for-money" levels.
Chairman David Page said: "During the current financial year to date we have seen sales and profit growth, improved operating cash flow, and reduced debt exposure for the group. These factors, together with our successful new opening so far this year, have led us to consider increasing our opening programme beyond the current financial year.
"The board remains confident that The Fulham Shore, underpinned by its unique brands and clear growth strategy, remains well positioned for continued growth and a great future."
The group said it plans to open more restaurants in the year ending March 2020 than the current year. It has exchanged contracts for a new Franco Manca in Edinburgh to open in FY2020 and has a number of other locations in advanced legal negotiations with landlords.
The company said that while the turmoil in UK retail and restaurant sectors has continued throughout this year, it believes that restaurant operations which offer value for money and food quality and provenance will continue to prosper.
"We will respond to Brexit in March 2019 as it occurs, when we understand how it will be implemented and the effect it may have on the UK's mood and prospects. However, we are progressing with contingency plans to prepare for all types of exits," it said.
At 1000 GMT, the shares were up 16.5% to 10.95p.
Paul Hickman, analyst at Edison Investment Research, said: "To have achieved this result in the current climate is noteworthy and highlights the traction that a low-price, high value market offer commands."