In its annual results for the 52 weeks ended 1 January 2023, the fast-casual Mexican restaurant group saw revenue increase by 20.0% to £57.7m, up from £48.1m the previous year.
Like-for-like revenue was also up 16.4% against 2019 levels.
Describing 2022 as a year of 'significant growth and further strategic progress', Tortilla added a 'record' 18 net sites to its portfolio, split between group-operated sites and those run under franchise.
It also acquired rival burrito brand Chilango in May 2022, with five of the chain's eight sites converted to Tortilla restaurants and the other three refurbished under the Chilango banner.
By the end of the year, the Tortilla group operated an estate of 82 sites in total.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the year was £4m, down from £8.7m in 2021 that was attributed to £3.9m of VAT benefit the prior year.
Gross profit margin was 76.4%, compared to 79.6% in 2021. Net debt was £0.6m, compared to net cash of £6.7m in 2021.
“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,” says Richard Morris, chief executive officer of Tortilla.
“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.”
Going into 2023, trading has remained ‘in line with expectations’, according to the group, with like-for-like sales growth up 4% against 2022 for the eight weeks to 26 February 2023 and up 11% when adjusted for VAT.
Already this year Tortilla has opened new sites in Derby and London’s Greenwich that have seen ‘encouraging early trading’, with a pipeline of further openings planned in places such as Milton Keynes, Belfast, and Bracknell.
The group reports that it is ahead of schedule to open 45 new sites in five years.
It is also exploring new franchise sites to enhance ‘the diversity of locations’, including expanding its Compass Group partnership and further planned openings at rail stations with SSP group.
Amid rising cost pressures, Tortilla has taken action across its supply chain to manage costs and aid profitability, including hedging its utilities between April and September 2023. It reports that food cost inflation rates have now largely plateaued.
It has invested in technology to enhance customer service and reporting efficiencies to support its growth strategy and customer loyalty.
“The beginning of 2023 has started well with like-for-like sales up 4% in the 8 weeks to 26 February,” adds Morris.
“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.”
Alongside its results, Tortilla further announced that senior independent director Laurence Keen will not seek re-election at the company’s AGM in May 2023, having taken a role at Hollywood Bowl Group. Non-exec Francesca Tirtiello will take over as chair of audit.
“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,” says Emma Woods, chair of Tortilla
“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.”
