Tortilla Mexican Grill warns on FY earnings

Restaurant group Tortilla Mexican Grill warned that its full-year performance would be "slightly behind" previous expectations as a result of "subdued consumer confidence".

UK like-for-like growth was slightly higher at 3.7%, driven by new store openings around the country, while full-year revenues were 13.8% stronger at £65.7m.

However, Tortilla said the ongoing cost-of-living crisis had hurt the eating-out market during the year and currently anticipates adjusted underlying earnings to be in the vicinity of £4.5m–£4.6m, down from previous expectations of £5.0m.

Tortilla said its London sites, shopping centres, and travel locations continued to perform "particularly well", while its high street locations were impacted by "lower footfall over the past few months". Sales in smaller tertiary cities and towns were also lower.

Chief executive Richard Morris said: "As a management team we are taking proactive actions to adapt to the changing market environment. We know that in buoyant eating out markets where the Tortilla brand is well known, we outperform. We have a strong portfolio of new sites in high-quality locations as well as additional franchise growth opportunities.

"In addition, we intend to increase marketing investment to improve broader consumer awareness of our brand and fresh, value for money proposition whilst also taking action to optimise the profitability and long-term potential of our delivery channel."

As of 0900 GMT, Tortilla shares had slumped 9.09% to 50.0p.

Reporting by Iain Gilbert at Sharecast.com