Tortilla has reported a 14% increase in revenue to £65.7m in the year to 31 December 2023.
The fast casual Mexican chain continued to build momentum from the previous year’s record, driven by new openings, the annualisation of the openings from 2022, and the full-year impact of the Chilango acquisition.
It saw like-for-like (lfl) revenue growth of 3.6%, equivalent to 4.9% when adjusted for the Q1 VAT benefit in 2022.
Adjusted EBITDA (pre-IFRS 16) saw a 16% increase year-on-year to £4.6m from £4m in 2022.
Loss before tax stood at £1.1m, widening slightly from £0.9m in 2022.
The group further reported a gross profit margin of 77%, an uplift from 76.4% in 2022, with the increase attributed to effective negotiations with its main food suppliers.
Continued profitable growth was driven by Tortilla’s multichannel business strategy and cost saving initiatives.
The chain added six company-operated and one franchise site, taking its total to 87 sites, in line with its aspiration at time of IPO.
It has accelerated growth via franchising by strengthening its partnerships with SSP Group and Compass Group, as well as Eathos in the Middle East, resulting in franchise sales up 26% for 2023.
Tortilla uses a multichannel marketing strategy to drive brand awareness and footfall through events and promotions, leading to a 116% uplift in active users of its loyalty scheme, with 400,000 customers at period end.
The group appointed a new director of food post period end to lead menu development and innovation, as part of an effort to maintain its market-leading position.
It has further strengthened its board and management team, with Andrew Brook appointed as technology director and Keith Down as senior independent non-executive director.
Former CEO Richard Morris stepped down in February this year; the new management team has been embedded with current CEO Andy Naylor and CFO Maria Denny.
The group plans to double down on franchising while continuing its own store rollout in grade A locations. It has at least five openings planned for 2024 with its partners as well as three company-operated sites.
Lfl sales for Q1 2024 remain in line with expectations, with the outlook expected to improve as consumer finances recover in H2 2024.
CEO Andy Naylor commented: “I am pleased to present my first set of results as Chief Executive Officer. Recent years have seen Tortilla expand strategically through a multi-channel approach, strengthening our operational model as a springboard for sustained, profitable growth. Throughout 2023, we dedicated ourselves to building resilience, especially enhancing profitability, as we recovered from macro events in 2022. Our efforts included streamlining costs, bolstering franchise partnerships, augmenting efficiency via technology investments, and enriching our team with fresh talent, all while continuing site deployments. These initiatives have solidified the foundation for our continued success.
“The appetite for Mexican cuisine is surging, and Tortilla, as the dominant market leader in the UK, has an unparalleled set of advantages to capitalise on this burgeoning opportunity across the UK and Europe. Today, I’m pleased to unveil our reinvigorated strategic vision: ‘Tortilla’s Vital Five.’ Building upon our proven track record, this strategy will create sustainable profitable growth in the years ahead, unlocking substantial value for our shareholders. Tortilla continues to have immense potential and I am excited to lead the business through the next chapter of the journey.”
