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Mon 10th Jan 2022 - Tortilla FY like-for-like revenue up 23.8%
Tortilla FY like-for-like revenue up 23.8%: Tortilla, the UK’s largest fast-casual Mexican restaurant brand, has this morning reported a 23.8% increase in like-for-like revenue in the year to 2 January 2022, compared to the same period in 2019. Group revenue increased 79% to £48.1m (FY20: £26.8m; FY19: £35.4m). Excluding Q1, which was significantly impacted by lockdowns, the business said that like-for-like revenue increased by 30.3% versus FY19. Further growth was driven by the addition of seven UK company-operated restaurants and two UK franchise restaurants, taking Tortilla’s estate to 64 stores globally. The business said that its FY21 revenue and profits are materially ahead of its expectations following stronger trading in Q4, despite the emergence of the omicron variant. It said that strong cash generation resulted in net cash at the year end. During the period the company launched a partnership with Merlin Entertainments at Chessington World of Adventures, as well as opened two further sites in partnership with SSP Group at Gatwick Airport and Skelton Lakes motorway services. The company said: “Tortilla delivered excellent performance during the FY21 financial year, achieving a 79% increase in group revenue to £48.1m, and a 36% increase when compared with FY19 revenues. This was driven by growing customer demand across all the group’s channels of eat in, take away and delivery, and underpinned by both the increasingly relevant Tortilla brand and the continued roll-out of new sites in line with the group’s growth strategy. During the period, Tortilla opened new stores in Edinburgh, Exeter and Windsor, new delivery kitchens in Balham, Manchester and Brent Cross, and launched the first Tortilla site in partnership with Merlin Entertainments, taking the total company-run locations to 51. The group’s delivery channel went from strength to strength during the year, supported by an increase in the number of delivery kitchens to five. An important pillar of Tortilla’s multichannel model, delivery now comprises more than 30% of total group revenue. Trading continues to be very positive despite the emergence of the omicron variant of covid-19. The board remains confident that the group will perform in line with expectations for FY22, as the reduced financial assistance from the UK government will be offset by reduced trading restrictions.” The company said it also remains confident in its ability to make good progress against its store roll-out strategy to open 45 new sites in the next five years. Richard Morris, chief executive of Tortilla, said: “We are delighted to have maintained the very strong trading momentum, outlined at the time of our IPO, to achieve an excellent full year performance. This was supported by the growing appeal of our proposition and the continued expansion of the Tortilla brand. Once again, the adaptability of Tortilla’s offer supported us through the latter stages of the year to achieve a strong performance across both delivery and take away. In addition to delivering this very strong financial growth, we were pleased to achieve progress against a number of strategic objectives, including the launch and development of various partnerships, and growing our estate of delivery kitchens and traditional bricks and mortar locations, to meet the increasing customer preference for delivery of high-quality Californian-inspired Mexican cuisine.”

Next edition of definitive sector profitability guide shows damage done by pandemic: The next edition of the Propel’s Turnover & Profits Blue Book, which is updated monthly for Premium subscribers, shows the full damage done to the sector by the pandemic. It features 321 companies making a combined loss of £8.17bn compared to 186 companies in profit – making a combined £797m. Losses now outstrip profits in the sector ten times over. The next Blue Book will feature more than 500 companies when it is published on Friday 14 January at midday. The next edition shows the pandemic’s effect on the sector, with 321 companies making a combined loss of just over £8bn. Total turnover of the 500 biggest sector companies stands at £28.5bn. The Blue Book, which is produced in association with Mapal Group, provides a five-year overview of turnover and profit, ranking companies according to turnover, pre-tax profit and profit conversion. It also provides details of directors’ earnings and highest paid directors. Premium subscribers also receive two other databases – the New Openings Database, produced in association with StarStock, and the Multi-Site Operators Database, produced in association with Virgate, which are also updated each month. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email to sign up. Subscribers also receive access to Propel’s library of lockdown videos and Friday Wrap interviews and now also have access to a curated video library of the sector’s finest leaders and entrepreneurs, offering their insights on running outstanding businesses in the sector. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out, regular video content and regular exclusive columns from Propel group editor Mark Wingett.

Nightcap reports 46.5% increase in H1 net sales; 25 sites in legal negotiations or under offer: Bar operator Nightcap has reported a 46.2% increase in net sales for the 26 weeks to 26 December 2021, and said it currently had 25 sites in legal negotiations or under offer across several of its brands. It said that its unaudited group net sales were £15.5m for H1 FY2022, resulting in a 46.2% net sales increase on the same period in 2019 and a 22.4% like-for-like increase compared to the same period in 2019. Excluding the Plan B period, group net sales increased by 52.7% and 28.3% on a like-for-like basis for the 24 weeks ended 12 December 2021. Nightcap said it continued its strong growth during the second quarter of its 2022 financial year, seeing three successful new site openings for The Cocktail Club during November 2021 in Bristol, Reading and Mansion House in London. Adventure Bar Group entered into a new lease for a site in Cardiff on 23 December 2021. Although more than 7,500 bookings for the Christmas period across the group were initially cancelled following Plan B, the business said it is pleased that over 70% of these bookings were rescheduled to take place between January and March 2022. Unaudited group net sales were £7.9m for Q2 FY2022, resulting in a 32.1% net sales increase and a 12.9% like-for-like increase compared to the same period in 2019. The company announced that Adventure Bar Group has entered into a lease for a new Tonight Josephine site in St Mary Street, central Cardiff. The site covers an area of approximately 6,000 sq ft with a 3:00 am license Monday to Sunday. The site is expected to open in March 2022 and will have an unrestricted capacity of 294. Nightcap said it currently has a further 25 sites in legal negotiations or under offer across several of its brands. The group expects for several new site leases to be entered into before the end of March 2022. It said that its balance sheet is solid with unaudited cash at bank of approximately £9.4m at 26 December 2021. Sarah Willingham, chief executive of Nightcap, said: “As we approach our first anniversary since our IPO, I could not be prouder of the entire team across our three operating businesses. To achieve 46.2% growth in net sales and 22.4% on a like for like basis represents a monumental effort under any circumstances, not least during a time when new covid-19 guidelines negatively affected the important Christmas trading period. With the first new Adventure Bar Group site lease signed and a further 25 sites under offer or in legal negotiations across the group, we are well positioned for significant expansion as we enter 2022 with sufficient cash reserves of approximately £9.4m for the group’s operations and to execute our growth strategy.”

NTIA calls for government to consider reducing covid isolation period: Nightclub bosses have called on the government to consider reducing the covid isolation period or implement a “test & release” for the night-time economy. The Night Time Industries Association (NTIA) said the moves would help stem the challenges for the workforce and businesses in a fight for survival through early 2022. The call comes following the statement from the secretary of state for education Nadhim Zahawi suggesting that cutting self-isolation to five days would be helpful but would be in the hands of the experts and is under review. Michael Kill, chief executive of the NTIA, said: “Since Freedom Day we have been plagued with staff and supply chain shortages, further exacerbated by the implementation of new rules due to the omicron variant, which has since compromised our trading levels, service, and generated a level of anxiety within the workforce and in some cases compromised public safety. We are asking the government to consider the pressures on the workforce, not only as employers, but as employees trying to survive. Particularly the impact on well-being, and the potential job losses if this sector collapses, as one of the biggest employers of 18 to 30 year olds within the UK. Our current isolation policy, although reduced to seven days, is still resulting in considerable losses in staff numbers to illness and isolation, this in turn is placing pressure on the supply chain, and workforce resulting in limitations in trading capacity. At a time when many within the industry are struggling to survive, given the limited support available. The culmination of lost trade, workforce and supply chain isolation challenges, continual uncertainty, without consideration for people’s livelihoods and proportionate support. We are already seeing an unprecedented level of the workforce and businesses struggling to survive. May I remind the government that jobs will be lost, if businesses do not survive.”

Sunak backs call for covid isolation to be cut to five days: The chancellor is among cabinet ministers backing calls to cut the covid isolation period to five days amid growing pressure for the UK to shift to living with the virus. Rishi Sunak and ministers from the main economic ministries believe cutting isolation from seven days could help reduce staffing shortages caused by the omicron variant, the Telegraph reports. One government source suggested 60% of the cabinet were in favour of the move, although they stressed that such a move would have to be sanctioned as safe by scientists. It comes as covid cases fell for the fifth day in a row, to 141,472, with data also showing that cases have started to fall in some areas outside London, suggesting omicron may be reaching its peak across the country.

Labour – Scrap business rates due to energy costs: Labour has called for business rates to be scrapped to help firms struggling to cope with rising energy prices. The party also urged the government to introduce a windfall tax on North Sea gas and oil producers to create a £600m fund to support companies. Businesses, like many households, have seen their energy bills rise in recent months along with wholesale gas prices. The government said it would listen to people and businesses on how to manage the costs of energy. Wholesale gas prices have surged in recent months, with increased demand for energy in Asia and a summer with little wind all contributing to the cost on households and businesses. The Office for National Statistics said 12% of businesses said either production or suppliers or both had been affected by increases in wholesale gas prices. The Times reports that Labour said its own analysis suggested nearly one in four UK businesses had been affected by higher gas prices. Jonathan Reynolds, Labour’s shadow business secretary, said “viable firms” were at risk of “going to the wall because of government failures over the last decade”. “The government has been asleep at the wheel, with British firms, especially those energy-intensive businesses, paying the price,” he added. Labour said the £600m “contingency fund” to support struggling firms, including energy intensive industries, such as manufacturing companies, would be financed by the one-off windfall tax on record North Sea Oil and Gas profits. The party said it will force a vote in parliament on Tuesday, which will call for the government to scrap business rates and create its suggested £600m contingency fund.

Bullish finance directors are ready to spend again: The economy will receive a much-needed boost from business investment this year with a record proportion of finance directors ready to prioritise funds for expansion, a survey says. The Times reports that 37% of chief financial officers surveyed by Deloitte said that increasing capital expenditure, the money used to buy fixed assets such as land, machinery or buildings, was a priority for 2022. It is the highest figure recorded by the accounting firm in its quarterly survey since it first asked the question in 2009. The appetite for growth is almost double the level recorded at the beginning of the pandemic recovery in March last year. The survey, which was conducted between 1 December and 14 December last year, when the omicron variant had emerged and Plan B restrictions were announced, included 85 finance chiefs, including 21 at FTSE 100 companies. Expanding into new markets and introducing new products and services were also at a record high, with half of respondents saying that they were a priority for this year, up from 37% last March. More than half of the respondents, 54%, said that their plans to invest in the next year had been influenced by an expected rise in demand in the UK. About 48% said that long-term growth in demand for their company’s products and services was one of the factors influencing their plans to invest; 43% cited expectations that demand would grow across developed economies and the UK’s transition to a low-carbon economy. Almost half the finance chiefs had experienced significant recruitment difficulties in the past three months but the situation is expected to improve and only 24% expected recruitment issues to persist until the end of the year.

Virgin Active floored by pandemic: Virgin Active slumped to a loss of almost £600 million in 2020 and conceded that it would take time to rebuild a membership base decimated by the pandemic. The Times reports that the leisure club operator, which underwent a painful restructuring last year, suffered a fall in its total memberships around the world from 1.16 million to 931,000 during 2020. Its 40 clubs in the UK were closed for five months, sending revenues tumbling 59% year-on-year and memberships declining by 31%. The group as a whole, which has 238 clubs across Europe, Asia and South Africa, filed accounts showing revenues down 51% to £295.9m, with pre-tax losses ballooning from £27.4m to £583.7m. There was an impairment charge for the year of £402.5m. Jo Hartley, chief financial officer, said: “The rebuild of the membership base will take time and accordingly short to medium-term financial performance projections have declined compared to the expectations before the pandemic.” Virgin Active confirmed that Hartley and Matthew Bucknall, chief executive, would both be leaving. It said that Bucknall, who co-founded the business 25 years ago, was retiring but remaining a non-executive director and Hartley would be joining Halfords. Replacements are being sought.

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