Franco Manca owner to open more restaurants as sales rise

Franco Manca owner The Fulham Shore has pledged to open more sites as it reported higher sales and reduced debt, despite challenging conditions in the casual dining market.

The company, which also owns The Real Greek, reported revenues of £33 million for the six months to September 23, up from £27.5 million this time last year.

Underlying earnings grew 24% to £4.1 million, while net debt was reduced from £12 million at the end of the 2017 financial year to £8.9 million.

The company will now increase its restaurant opening programme, having slowed the process earlier this year after it issued a profit warning in March.

One underperforming site in Brighton was closed during the period, while two new pizzerias opened in Bath and Cambridge.

Chairman David Page said the company is now in a good position to expand given its improved performance and the reduction of debt.

“These factors, together with our successful new opening so far this year, have led us to consider increasing our opening programme beyond the current financial year, subject to how political events in the UK develop,” he said.

One new site is lined up to open in Edinburgh during 2020, and negotiations are ongoing with landlords on a number of other locations.

The move contrasts with several restaurant chains – including fellow Italian brands Prezzo and Jamie’s Italian – which have closed sites this year amid rising costs.

Mr Page added: “Whilst the turmoil in UK retail and restaurant sectors has continued throughout 2018, we believe that restaurant operations which offer value for money and, above all, food quality and provenance, will continue to prosper.

“We will respond to Brexit in March 2019 as it occurs, when we understand how it will be implemented and the effect it may have on the UK’s mood and prospects. However, we are progressing with contingency plans to prepare for all types of exits.”

Industry analyst Mark Brumby of Langton Capital said The Fulham Shore is a “winner” in the troubled casual dining space.

“The Fulham Shore has ended this half year with more restaurants, higher sales and profits and less debt,” he said.

“If this can be maintained (we believe that it can and the company’s own comments are positive), then shareholders will have reason to celebrate over the medium and longer term.”

Shares in the company were 16.5% higher in morning trading on Wednesday.