This morning’s Trading Update from Tortilla Mexican Grill (LON:MEX) for its first half period to 2nd July has reported a 22% advance to £32.7m revenues, while noting some easing of cost inflation in certain key food ingredients.
Specialising in the sale of freshly made Californian-inspired Mexican cuisine, Tortilla is the largest and most successful fast-casual Mexican restaurant group in the UK.
It has some 65 company-owned sites and 17 franchised operations across the UK, Ireland and the Middle East.
CEO Richard Morris stated that:
"We are pleased to have delivered good revenue growth and further strategic progress in the first half. Our strong LFL sales growth has been ahead of industry comparatives reflecting the appeal of our high quality, healthy and customisable great value propositions.
We continue to deliver on our disciplined but ambitious approach to new site openings and strategic expansion, with all of our new openings performing well and meeting our expectations. Our franchise sites also continue to perform well with our SSP sites achieving record results and we remain hugely excited by the significant franchise growth opportunities in the UK and overseas."
The group, with a mission of offering customers freshly prepared, customisable, and authentic Californian-inspired Mexican food, will announce its Interims in mid-September 2023.
Analyst Opinion – shares a Buy
Anna Barnfather at Liberum Capital rates the group’s shares as a Buy.
For the current year to end December she is estimating sales of £69.8m and pre-tax profits of £1.0m, generating 2.6p in earnings per share.
Her 2024 forecasts are for £85.2m sales, £2.4m profits and 3.8p of earnings.
She has a 170p a share Target Price.
Conclusion – showing price recovery
This £33m capitalised group’s shares, which were up to 145p at this time last year, are now 81.5p and showing some price recovery potential as its steady growth strategy shows performance.
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