The Fulham Shore dishes up sales surge as menu proves a hit
The Franco Manca pizza company owner reported pre-tax profits of £1.4m for the year to March 31 against losses of £100,000 the previous year.
Strong demand for food launches including a new vegan menu has helped the owner of the Franco Manca pizza company notch up a return to profit after a 17% sales surge.
The Fulham Shore, which also owns the The Real Greek restaurants, reported pre-tax profits of £1.4 million for the year to March 31 compared with losses of £100,000 the previous year.
Shares raced 7% higher as it said revenues jumped to £64 million, from £54.7 million the previous year, while headline underlying earnings lifted to £7.8 million from £7.4 million.
The group – led by former Pizza Express boss David Page – had raised earnings forecasts earlier this year and revealed that it was ramping up its restaurant opening programme after higher numbers of customers flocked to its sites.
We will continue to open new restaurants in carefully chosen locations, conscious of the property pitfalls that others have fallen into David Page, The Fulham Shore
The Fulham Shore said new innovations such as its seasonal No 7 pizza in Franco Manca and the vegan menu in The Real Greek had proved a hit with customers.
The group now plans to open between eight and 10 outlets over the year to March 2020, having previously slowed down expansion plans.
It comes as many restaurant rivals are retrenching after years of over-expansion coupled with increasingly cautious consumer spending, with the likes of Jamie’s Italian collapsing under the strain.
But chairman Mr Page said: “We are pleased to report the demand for both of our businesses continues to grow.
“We will continue to open new restaurants in carefully chosen locations, conscious of the property pitfalls that others have fallen into.”
The group also said the new year had started well for its two brands, with three new Franco Manca sites opened since the end of March, taking its total to 47, and a 16-strong chain of The Real Greek sites.
It wants to have more than 68 restaurants in total by the end of next March.
In a dose of cheer for investors, the group is also considering paying out a shareholder dividend for the new financial year.
The firm has successfully overcome challenges at its London sites, where new openings were cannibalising business at the expense of nearby locations.
The problems had forced the business to warn on profits in September 2017 and March last year, as well as slow down its expansion plans.
But the company said the sales hit from new openings has now reduced, with increasing customer numbers at both existing and new restaurants – but encouragingly, growth was largely seen at existing sites.
Mr Page said the group hoped to avoid the fate of many rivals buy focusing on compact sites that are not in prime high street locations.
He said successful players in the difficult market are “likely to be operating from a well-chosen modern estate, avoiding the demise of the old prime high street and instead favouring restored markets, destination locations and unpretentious interiors”.
“As long as successful restaurant operators keep their menu pricing right and their financial structure stable, they will continue to succeed where some larger operators have failed,” he added.