Fulham Shore trading well as it rolls out supermarket pizzas

Restaurant chain operator Fulham Shore announced the strategic expansion of its Franco Manca pizza business into retail stores nationwide in a trading update on Tuesday.

The AIM-traded firm, which operates the Franco Manca and Real Greek brands, said it had launched its debut range of five “premium” Franco Manca ‘Chef's Selection’ cook-at-home pizzas.

It said the range was developed through a licensing partnership with Italian food business Rondanini, and was now available to purchase in more than 500 supermarkets across the UK from this week.

The group said it had the opportunity to expand into more stores, additional to the current 500, over the coming year, and to partner with further retailers from late 2023.

Fulham Shore said its expansion into retail operations would complement its portfolio of restaurants, drive brand awareness, and enable it to introduce the Franco Manca brand to consumers throughout the UK, especially where Franco Manca did not yet have a restaurant presence.

Since its last update on 31 August, the group said it had opened four Franco Manca pizzerias in Lincoln, Hove, Chichester and Cardiff, and two Real Greek restaurants in Gloucester Quays and Solihull.

It said the new locations had all been busy from the outset, with the openings taking the total number of restaurants operated by the group to 95.

The first Real Greek in Scotland, located in the new Edinburgh shopping scheme St James Quarter, was also being fitted out ready for a December opening.

Looking at its trading, Fulham Shore said that during the six months to the end of September, in spite of “challenging” political and macroeconomic circumstances as well as recent sporadic train and tube disruptions, it traded in line with management expectations.

The performance was driven by the popularity of both Franco Manca and the Real Greek's value-for-money propositions.

As a result, group revenues for the period grew around 35% when compared with the same pre-Covid period in 2019, and some 25% ahead when compared with the same period to September last year.

The firm’s net cash position before IFRS 16 lease liabilities as at 26 September was over £2.6m.

Fulham Shore said it had undrawn bank facilities of £16.9m, providing “substantial” financial headroom of more than £19.5m.

Looking ahead, the company said macroeconomic challenges including inflation, rising interest rates and political uncertainty were continuing to affect consumer confidence and, combined with input cost inflation, were presenting trading conditions that were more unstable and unpredictable than at any time in recent memory.

The rising costs and what, if any, relevant government support was leading to a lack of transparency for short-term trading.

As it previously stated, Fulham Shore said it was planning to open around 18 restaurants during the 12 months to 26 March next year.

The group said it would review its opening target for the 2024 financial year on an ongoing basis, based on the “ever-evolving” economic and political outlook, and would share subsequent updates as appropriate.

“After many months of careful development we are thrilled to launch our debut range of Franco Manca cook-at-home sourdough pizzas which are now available in over 500 supermarkets,” said executive chairman David Page.

“This is a very exciting new strategic development for Franco Manca and the Fulham Shore, which complements the appeal and success of our consistently busy and growing portfolio of restaurants, and we are looking forward to seeing it develop.”

Page said the company was “delighted” that, underpinned by the relevance of its Franco Manca and Real Greek brands and their value-for-money propositions, both its established and new restaurants performed well during the first half of its financial year.

“This has led the group to trade in line with management expectations and represents revenue growth of over 35% compared with the same period in 2019 and some 25% ahead when compared with the same period to September 2021.”

At 1049 GMT, shares in the Fulham Shore were up 2.28% at 10.1p.

Reporting by Josh White for Sharecast.com.