Franco Manca operator Fulham Shore will increase its openings programme this financial year after achieving EBITDA of £7.1m – up from £5.5m in 2018.
Following a conservative year when the group opened four new restaurants up to March 2019, Fulhum Shore plans to open between eight and 10 new sites up to March 2020.
The group achieved revenue growth of 17% to £64.0m (2018: £54.7m), which it said was driven primarily by good trading in its existing restaurant estate.
Operating profit was £1.8m - up from £0.1m in 2018 - during the period,
Since the year end three further Franco Mancas have opened in Greenwich, Birmingham and Exeter, with two further pizzerias being built in Leeds and Edinburgh.
Chairman David Page said: “Whilst the four new pizzeria we opened during the year contributed to our reported revenue increase, the group’s growth was primarily driven by improved trading and increased customer numbers within our existing restaurant estate.
“With this sound platform of continued sales growth and increasing customer numbers, the board has taken the decision to increase the group’s restaurant opening programme with a target of between eight and ten new restaurants in the financial year to March 2020. Each of these new sites will be as compact as possible, with appropriate rent levels for its location.”
A further Franco Manca has been committed to in Manchester, with final stages of negotiation on two new The Real Greek sites.
With the target of eight to ten new restaurants by the end of the financial year, it would result in a group total of more than 68 restaurants by March 2020.
The opening of Greenwich Franco Manca in April 2019 was described as one of the company’s “busiest yet”, while Franco Manca took £1m net revenue in a week for the first time in early July 2019.
During the period a seasonal pizza number 7 was introduced in Franco Manca and a vegan menu in The Real Greek.
In a critique of the casual dining industry, Page said much of the capital invested in the sector over the past five years has “not been spent wisely”.
The veteran restructurer said there was a “way to go” on property prices levelling out, with better value achieved through patience.
“Holding out for lower rents feeds through to continued low prices on our menus, which is excellent for our customers,” he wrote. “We have sometimes seen as much as a 30% fall in rent where an existing tenant ceases trading and the landlord re-lets the property. We believe this decline will continue. This has happened only once before in my 46 years of restaurant and property experience - during the 1989-93 UK recession.”
Page said commercial agents needed to realign their interests away from institutional landlords towards successful tenants – “where the power and their interest now lies”.