Franco Manca expansion slices owner’s profits in half
Franco Manca owner Fulham Shore today revealed that profits halved in the six months ending in September despite higher revenue as it continues to expand.
The restaurant chain owner saw profit before tax sliced in half from £1.5m last year to just £743,000 in its latest half-year as it poured money into opening six new Franco Manca pizzerias and one new outlet of The Real Greek.
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The dent to earnings came despite a 9.3 per cent year-on-year jump in revenue to £36m.
It plans to open between eight and 10 new restaurants in the next financial year.
The company paid out £1.3m in interest on bank loans and overdrafts for the period. But it said its debt pile “remained at a manageable level as planned” of £8.8m, down slightly from 2018’s £8.9m.
Fulham Shore counted £1.7m in cash on hand at the end of September and said “a modest dividend will be considered by the board” come the end of its financial year, though investors will not see an interim payout.
Fulham Shore chair David Page said: “The performance was driven by seven successful new restaurant openings as well as increased customer numbers in our restaurants.”
Franco Manca serves sourdough pizza and has spread from rapidly from a stall in Brixton village to over 51 restaurants across the country.
The chain has proved more resilient to difficult high street trading that has claimed Jamie Oliver’s Italian restaurants and knocked Pizza Express to its knees.
The UK’s top 100 restaurants lost £93m in total over the last year compared with a profit of £37m a year earlier, research by UHY Hacker Young shows.
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Fulham Shore said: “Current trading remains satisfactory but the sector’s outlook is not helped by poor consumer confidence.”
Its share price fell 1.3 per cent to 11.1p after the update.
Main image credit: Franco Manca/Fulham Shore