Tortilla H1 revenues dip following change to delivery strategy
During the period, Tortilla performed well across UK franchise stores, which drove sales growth of more than 10%
Tortilla has revealed that revenues for the first-half period to 30 June fell from £32.7m to £31.5m, as overall like-for-like revenues fell 5.5% due to a planned decision in the first quarter to condense to a dual delivery partnership – ending its ties with Deliveroo.
This move culminated in an “expected” delivery revenue decline of 10.3% like-for-like, albeit with improved delivery profitability of £0.5m in the first half.
Meanwhile, the group’s adjusted EBITDA of £1.8m is in line with the year before, despite the revenue drop. Tortilla has also reduced its loss before tax to £0.2m from £0.6m in H1 FY23.
In addition, the burrito chain’s adjusted net debt of £3.3m at the end of H1 was in line with expectations, and at that point, £2.8m of the group’s existing debt facilities was undrawn.
During the period, Tortilla performed well across UK franchise stores, which drove sales growth of more than 10% with two further openings during the period including Leeds Train Station with SSP Group and Leicester with Compass.
As a result, Tortilla expects its franchise partners to open at least three more stores in H2, making it on track to achieve the expected five for the full year.
Tortilla has also announced a five-year extension to its development agreement with SSP, which will see it more than double its estate with the franchise partner.
Andy Naylor, CEO of Tortilla, said: “We are very proud of the positive momentum we have driven throughout the business over the last six months. The UK business had lost momentum at the start of the year, and we had to make some big decisions to overhaul the trend.
“We have driven the UK business forward by revitalising our food offering and investing in people, brand awareness and technology. It is encouraging to see the benefits of these investments, with our in-store like-for-like sales steadily improving.”
He added: “As we approach Q4 we continue to see positive signs of the hard work conducted by the team in the first half of the year, with current trading in line with management expectations. The board remains confident and excited about Tortilla’s long-term and sizable growth opportunities both in the UK and internationally.”
