Fulham Shore’s outlook remains optimistic with financial headroom for further expansion.
“Our restaurants are still busy with customers seeking a great experience and value for money in the current inflationary climate,” managing director Nabil Mankarious said in the group’s financial results for the year ending 26 March 2023.
The Franco Manca and The Real Greek operator looks forward to growth under Toridoll Holdings, after it was acquired in July 2023.
Despite navigating a challenging economic environment and periodic disruptions to public transport, revenue saw a significant increase, rising 21% to £99.9 million from £82.7 million in the previous year.
However, Headline EBITDA declined by 7% to £18.8 million from £20.3 million.
During the year, Fulham Shore recognised impairment charges of £4.7 million over property, plant, and equipment for six restaurants that have not recovered at the same rate as others in the Group. This compares to £0.6 million for one restaurant in the previous year.
The Group’s net debt, excluding lease liabilities under IFRS 16, was £0.4 million as of 26 March 2023, down from a net cash position of £4.3 million in 2022.
Fulham Shore successfully funded 18 new restaurant openings, underscoring its commitment to expansion.
“Franco Manca traded encouragingly throughout the year,” said Mankarious, with more than 405,000 customers registered on its loyalty app by year-end. The group’s strategic expansion included 13 new Franco Manca pizzerias, with notable openings in Cardiff, Windsor, and three locations in Manchester.
The Real Greek also saw growth, notably expanding into Scotland with two new locations. The Real Greek added five new restaurants, including prime spots in Edinburgh’s St James Quarter and Glasgow’s Silverburn shopping centre.
Mankarious highlighted, “The new locations have all been well received, with Cardiff and Edinburgh being especially busy since opening.”
Overall, Fulham Shore now operates 96 company-owned restaurants across the UK. The return of overseas tourists has benefited its West End locations, although suburban and regional town sites continue to face challenges due to the prevailing three or four-day office working week, it said.
Looking at market trends, the casual dining sector in the UK is contracting, driven by rising costs and economic underperformance post-Brexit, said Mankarious.
“The UK has fallen, post-Brexit, from near the top to the very bottom of the G7 league performance table,” he added.
This environment has led to continued CVAs and closures, putting downward pressure on rents, though some sites remain uneconomic until rents fall further.
Fulham Shore is capitalising on the availability of former failed restaurant and retail locations. For example, the new The Real Greek in Braintree was previously a clothing store.
The Group’s focus remains on maintaining competitive prices to offer a viable alternative to eating at home, despite the tight labour market and economic pressures.
On the franchising front, Franco Manca entered into a franchise agreement for expansion into Spain, with the first franchised restaurant opening in Malaga shortly after the year-end. “The franchisee has plans for a minimum of 12 restaurants to be opened over the next three years,” Mankarious said. It is also exploring further international territories, including Europe, the Middle East, and Africa.
In retail, the launch of Franco Manca’s Cook at Home pizzas in the UK’s largest supermarket chain in November 2022 has been well received. Additionally, The Real Greek introduced its first retail product, a herb and spice mix, in UK supermarkets during the summer of 2023.
