Franco Manca owner sees revenues jump as restrictions ease

Franco Manca and Real Greek owner Fulham Shore posted a jump in revenues on Friday after it reopened its doors to indoor diners as Covid restrictions were eased.

In the week starting 17 May, revenues were at around 103% of the levels seen in the same week in 2019. On a like-for-like basis, they were at 92%.

"This recent sales performance is very encouraging despite the restaurants having restricted capacity due to social distancing," the company said.

The restaurant chain owner also said that Franco Manca's loyalty scheme user numbers have doubled since the beginning of the first lockdown in March 2020, to more than 220,000 today.

"As a result of this trading performance, the group continues to plan the opening pipeline for the next three years. Our property team is travelling around the UK looking for new properties and we have a number of sites that are currently in legal negotiations," it said.

The company said 71 out of its 73 restaurants are now open across the UK for dining indoors. It plans to reopen its remaining two restaurants in Covent Garden at the beginning of June.

Russ Mould, investment director at AJ Bell, said: "The best test for the company is whether this latest strong demand can be sustained. Anecdotally, some barbers and hairdressers have said their shops were initially busy when restrictions were lifted in April, but then they suffered a lull for two or three weeks until people’s hair grew a bit and customers came back for another trim.

"While it’s fair to say that it only takes a day for people to feel hungry again, there could be a similar cycle for restaurants where diners wait a few weeks or even a month before frequenting their favourite establishments again.

"Fulham Shore could be at an advantage, however. Quite a big chunk of its restaurant estate has outside tables and the immediate weather forecast is for a few weeks of sun, meaning people could be out and about, ready to dine al-fresco style at places such as The Real Greek.

"The company is pressing ahead with expansion plans, implying that it is confident about trading for the rest of 2021 and beyond. There are some good deals to be struck with landlords eager to fill empty premises, meaning Fulham Shore could soon reap the rewards of investing at a time when there is still some uncertainty.

"The casual dining industry has also seen a reduction in overall capacity, meaning the supply/demand balance is looking more favourable for companies still operating. Many brands have disappeared in recent years, meaning those still standing could emerge even stronger in the medium term."