Casual dining restaurant group Fulham shore, the firm behind the Franco Manca pizza brand and the Real Greek, has endured a tough time in London's suburbs despite growing revenue 41% in the first half of its financial year.
Expansion, with three new Real Greek restaurants, seven Franco Manca pizzerias in the UK (including in Bournemouth and Reading), and one Franco Manca franchise pizzeria in Salina, Italy, ensured that the company saw revenue of £27.5m for the six months to 24 September 2017, up from £19.5m in the same period the year before.
Profit for the period rose slightly to £600,000, up from £500,000 in the year before.
The company is gearing up to grow the Real Greek and has invested in the brand's central team ahead of a national expansion. Since 24 September, the company has opened one Real Greek restaurant in Bristol and two Franco Manca pizzerias, one in King's Cross in London, and one in Bristol, taking its total number of restaurants to 58 in the UK (made up of 16 Real Greek, 41 Franco Manca, and one Bukowski Grill).
In a statement, chairman David Page said: "As indicated in September 2017, the summer should have been one of the busiest periods of our financial year and the weak trading across the dining out market that we also experienced has impacted this year's overall performance.
"Some of our pre-2017 restaurants, particularly in the London suburbs, are still experiencing revenue below the equivalent period a year earlier with increased volatility and some expected cannibalisation from our new restaurants in nearby locations. However, revenue from these restaurants have seen slight improvements from the poor summer period of July to September.
"Although we believe our half-year figures to 24 September 2017 were satisfactory, our full-year headline EBITDA to 25 March 2018 will depend on how our suburban estate performs in the second half of the year and also on the timing and performance of new openings.
"The slowdown in the UK retail and restaurant sector has been noted by many commentators, and is, we believe, the result principally of rising inflation, poor consumer confidence and a weakening economy. These factors, together with a number of rising costs, means that our pre-2017 estate, while profitable, is contributing less, on an average site by site basis, than last year."
The firm said that some of its openings this year have been delayed by as much as six months as it sought out better deals with landlords. It added that it hoped its new restaurant would give an average return on capital at the higher end of what it has seen so far, which it aims to achieve through more rigorous site selection.
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