Fulham Shore's Chairman, David Page has given at trading update on the restaurant chain at the AGM.
In the 2018 financial year to date, Page confirmed that the firm has opened seven Franco Manca pizzeria in the UK, one Franco Manca franchise in Italy and three The Real Greek restaurants.
This takes Fulham Shore's restaurant portfolio to 56 sites, comprising 15 The Real Greek, 40 Franco Manca and one Bukowski Grill. Many of the group's new restaurants are located outside London, in line with our strategy of extending the reach of the core brands.
Page stated, 'We are currently building two more Franco Manca pizzeria, in London and in Bristol, which are due to open later this autumn. The group continues to anticipate opening 15 new restaurants in the current financial year, in line with expectations (10 have been opened so far, the latest two being Franca Manca Oxford and The Real Greek Dulwich Village).
'However, given an increased availability of sites for sale due to the well-publicised pressures on other restaurant operators, we have decided to review our opening pipeline and to seek to improve terms with landlords of new sites we had already identified. This may delay some of our openings to later in this financial year.'
In March 2017, the company announced that it was reviewing the progress of its third business, a single franchise of the Bukowski Grill. In order to simplify operations and focus on the group's core brands, Fulham Shore has taken the decision to sell its Bukowski franchise and site in D'Arblay Street, Soho.
Despite hitting its targets for the first quarter of this financial year, during the holiday season in July and August the firm has seen a slowdown in trade, primarily from our restaurants in London suburbs. Page believes this is a sector-wide trading pattern and not unique to these brands.
In addition to this slowdown in revenue growth, as previously indicated, Fulham Shore is experiencing a higher fixed cost element to support its increased level of operations, especially in The Real Greek.
As a result of these two factors, the Board expects that, while Headline EBITDA (as defined in the company's accounts) for FY18 will be significantly higher than that achieved in FY17, it is likely to be less than current market expectations
Page continued, 'The Board is confident that the Group's Franco Manca and The Real Greek brands offer customers delicious, well-priced dining options in congenial surroundings. The Board believes that these strengths will see Fulham Shore through the current uncertain market conditions.
'We believe that both of our key brands have significant further growth potential and we continue to anticipate opening 15 new restaurants in the current financial year.'
Page concluded, 'Whilst the casual dining sector continues to face a number of cost pressures, the group does not intend to raise menu prices in the short term as we believe this is one of the fundamental reasons for the success of both The Real Greek and Franco Manca.
'In addition, the group will continue to pay at least the national living wage to all its employees, including those under the age of 25, and we will look for more ways to retain and incentivise our talented and committed team.'