Fulham Shore, the David Page-led, listed vehicle, has said that its acquisition of Franco Manca represents a major step forward in the implementation of its strategy to assemble a group of distinct growth restaurant businesses operating in the UK.
The company said that the c£27.5m acquisition of Franco Manca will represent a “successful, cash generative platform” on which to support its further development and that it was still intent on operating up to three distinct restaurant businesses.
Fulham Shore already owns and operates a Franco Manca restaurant on Tottenham Court Road, London, through a franchise agreement, which has traded successfully since its opening in December 2013. The company said that its performance had encouraged it to pursue the acquisition of the 10-strong chain
Franco Manca has opened restaurants steadily since the launch of its first sites in Brixton in 2008 and profits have increased over the last three years as more restaurants have been opened and the existing restaurants have gained more customers.
Fulham Shore believes that Franco Manca’s current estate of 10 restaurants provides a firm base on which to expand, initially in London and then, in time, elsewhere in the UK. It believes it has the potential to grow to at least 40 restaurants in the UK over the next five years.
Franco Manca is currently lining up an opening in Earl’s Court and is close to securing its first regional site in Bath. It is currently on site at units in British Land’s redevelopment of Broadgate Circus and the former Chimichanga site in Belsize Park. It has also lined up openings in Covent Garden, Ealing Broadway, Soho and Southwark for this year.
Fulham Shore said that trading in the period since the company’s interim results for the half year to 28 September 2014 has met Directors’ expectations, with The Real Greek restaurants, which were acquired on 20 October 2014, performing well.
The Real Greek saw a seasonal increase in turnover in the weeks running up to Christmas and the company said that trading has remained steady and in line with seasonal expectations since.
The eighth The Real Greek restaurant on Berwick Street, Soho, London, opened on 5 March 2015 and a further restaurant is due to open in central London later this year.
At 27 March 2015, Fulham Shore had net funds of circa £3m.
Franco Manca’s profits have grown in the three years ended 27 April 2014 and reached an adjusted profit before tax of 600k (unaudited) for the financial year ended 27 April 2014 on adjusted turnover of £5.75m (unaudited).
It said that trading since then has been ahead of the previous year, partly as a result of new restaurant openings. Three restaurants have been opened since 27 April 2014 and two more are currently being fitted out. At 27 March 2015, Franco Manca had net debt of £1.3m.
Fulham Shore said it would continue to evaluate opportunities for acquisitions of either individual restaurants, or multiple restaurants under the same name, focusing on the value for money and casual dining sector.
