Fulham Shore is scaling back its expansion plans after issuing its second profit warning in six months.
In a recent trading statement, the casual dining group which operates the Franco Manca and Real Greek brands said it expects to report an increase in turnover and headline earnings before interest, tax, depreciation and amortisation (EBITDA) for the financial year ending 25 March 2018.
However, it warned headline EBITDA will be “below market expectations” due to slower trade and higher operating costs in its suburban London restaurants. It warned in December 2017 in its half-year results that full-year headline EBITDA would depend on how its suburban estate performs in the second half of the year and on the timing and performance of new openings.
The group’s recent statement said: “We are operating in an uncertain economic outlook for both the UK and the restaurant sector in particular. As a consequence, we will bring forward our plans only to fund new restaurant openings from our internally generated free cash flow by reducing the number of new restaurant openings for the coming year. We will also choose those locations that we believe will give us above average returns and sensible property deals.”
Fulham Shore’s end of financial year results will be announced in mid-July.
It has opened 13 restaurants in the year to 25 March 2018, taking its number of restaurants to 41 Franco Mancas in the UK, one Franco Manca franchised in Italy and 16 Real Greek restaurants. The company is also building a new Franco Manca in Bath and has exchanged contracts on a site for later in the year in South St Andrew Street in Edinburgh.
Meanwhile, The Times is reporting that the Azzurri Group, owner of the Zizzi and Ask Italian brands, is the subject of potential bid interest. Although owner Bridgepoint has not put the group up for sale, it is believed to be open to offers that might provide a good return.
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