Franco Manca owner sees 'promising future' in less competitive field

Franco Manca and Real Greek owner Fulham Shore has said that "the future looks promising" for its business.

In a trading update published this morning, chairman David Page wrote: "We believe that the restaurant market in the UK was heading for a correction well before the coronavirus outbreak.

"There were too many restaurant businesses with owners and managers convinced they could swim like Mark Spitz, but which were actually being kept afloat by some badly made rubber rings and various leaky flotation devices. They were driven to expand by historically cheap debt, supposed high exit multiples on sale of the businesses and run by management teams who had never experienced either a downturn in the UK economy or an oversupply in the restaurant sector.

"Successful restaurant businesses will continue to be those offering reasonably priced food, made with quality ingredients, served by motivated teams. At Fulham Shore we offer all these things. In addition, we operate from a well-positioned, carefully chosen, fairly rented estate."

He added: "This is the future high – quality ingredients combined with low prices, delivering high turnover per site. With rents likely to be falling for the next few years and more sites becoming available, the future looks promising for Fulham Shore. A post-coronavirus era will, I believe, see less competition. We will go prospecting in areas of the country where we can open more of our restaurants, in towns and cities such as Newcastle, Canterbury, Cardiff and Glasgow."

Page said the business has emerged from the summer lockdown in "robust shape" having launched delivery and click and collect services from selected restaurants, which broke trading records despite the lack of dine-in custom. Fulham Shore also completed an equity fundraise raising £2.25m.

Since reopening custom has pivoted to the business' suburban sites, meaning these are much busier than those in the West End and other metropolitan areas, something it believes "will remain the case for the foreseeable future".

The business feels this will particularly benefit its Franco Manca brand: "We have always felt that a Franco Manca pizzeria thrives better in a local neighbourhood where it can build a loyal local following rather than rely on passing trade."

The trading update reports that the year ended 29 March 2020 had seen revenue grow by 7% reaching £68.6m, while headline earnings before interest, taxes, depreciation and amortisation reached £15.2m. The company record a loss before tax of £800,000.