Tortilla wraps up better-than-expected year

Mexican restaurant group Tortilla said on Monday that full-year revenue and profits were "materially ahead" of its expectations following stronger trading in the fourth quarter, despite the emergence of the Omicron Covid variant.

In an update for the year to 2 January 2022, the company said group revenue rose 79% to £48.1m, with UK like-for-like revenue up 23.8% versus 2019 despite Covid lockdowns and restrictions. Excluding the first quarter, which was significantly impacted by lockdowns, LFL revenue was 30.3% higher versus FY19.

Tortilla, which floated on the AIM market last October, said growth was driven by the addition of seven UK company-operated restaurants and two UK franchise restaurants, which took its estate to 64 stores globally.

Chief executive Richard Morris 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."

Tortilla said current trading remains "very positive" despite the Omicron variant.

"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," it said.

At 1105 GMT, the shares were up 4% at 190.74p.

Russ Mould, investment director at AJ Bell, said: "Tortilla seems to be ticking all the right boxes in terms of its strategy. It is adding new sites run both by the company and by franchisees. A partnership deal with Merlin Entertainments should open doors to new opportunities in theme parks, and an existing agreement with SSP continues to flourish with the addition of more travel hub sites.

"Consumers are increasingly demanding decent quality food on the go, and some of the most successful operators are the ones offering fresh products rather than chucking something bland in the microwave. Tortilla is riding this trend and its focus is now on gaining scale across the UK."