Tortilla Mexican Grill warns on FY earnings amid continued losses in France

(Sharecast News) - Restaurant group Tortilla Mexican Grill warned on Tuesday that full-year adjusted underlying earnings would come in around 10% below previous expectations amid continued losses in its French operations, where extended planning processes have delayed site conversions and weighed on near-term profitability.

While Tortilla's UK business delivered record first-half results, including a 33% year-on-year increase in adjusted EBITDA to �2.4m, this was offset by a �1.2m loss in France as the group invested in brand rollout and infrastructure.

Group revenue rose 14% to �36.0m in the 26 weeks ended 29 June, driven by 5.0% like-for-like growth in the UK and contributions from its Fresh Burritos acquisition in France. However, adjusted EBITDA fell to �1.2m from �1.8m a year earlier, and the group posted a pre-tax loss of �2.3m, widening from �200,000 in H124.

Tortilla also said UK trading remained strong, with Q3 like-for-like sales up 7.0%, and reiterated confidence in the long-term potential of its European expansion strategy.

Net debt increased to �9.8m, up from �3.3m, though Tortilla said its refinancing deal with Santander had boosted available facilities to �12.5m.

Tortilla also announced on Tuesday that it had tapped Richard Haley to take over as chief financial officer, with effect from 6 October. Haley has held senior finance leadership positions at Trainline, Nightcap, Halma, William Hill, Future, and Tesco.

As of 0835 BST, Tortilla shares had sunk 12.5% to 35p.

Reporting by Iain Gilbert at Sharecast.com