Tortilla has shifted its focus towards expanding in continental Europe following its departure from the Deliveroo platform, despite a drop in revenue. This strategic move aims to improve profitability and concentrate on in-store sales. The company remains optimistic about its growth opportunities both in the UK and abroad.
Strategic Shift from Deliveroo
Tortilla, a well-known restaurant chain, has reported a decline in revenue following its decision to withdraw from the Deliveroo platform. The company experienced a 10.3% fall in like-for-like deliveries for the 26 weeks ending 30 June. Tortilla’s primary focus has shifted towards expanding in continental Europe, which they believe will yield long-term benefits.
The strategic decision to part ways with Deliveroo was aimed at improving profit conversion and increasing focus on in-store revenue. This move resulted in a £0.5 million improvement in delivery profitability for the first half of the year. However, revenue for the first half dropped by £1.2 million compared to the previous year, going from £32.7 million to £31.5 million.
Financial Performance
Despite the drop in revenue, Tortilla’s adjusted earnings before interest, tax, depreciation, and amortisation remained steady at £1.8 million. This stability indicates that the company’s core financial health was not significantly affected by the reduction in revenue.
Tortilla is confident that their strategic initiatives will pay off in the long run, particularly through focusing on in-store sales and new market expansions.
Expansion in Continental Europe
Tortilla is now concentrating its efforts on expanding within continental Europe. The company acquired Fresh Burritos, securing 13 company-owned leasehold locations in French cities and the franchise rights to the Fresh Burritos brand. This acquisition is expected to act as a springboard for franchise growth across Europe.
Tortilla’s Chief Executive Officer, Andy Naylor, expressed pride in the company’s progress. He highlighted the positive momentum driven throughout the business over the past six months. The acquisition of Fresh Burritos is expected to provide significant opportunities for expansion and growth in new markets.
The decision to acquire Fresh Burritos aligns with Tortilla’s broader goal of establishing a stronger presence in international markets. This move is seen as a critical step in creating a robust franchise network across Europe.
Revitalising the UK Market
The UK market, which lost momentum at the start of the year, has been a focal point for Tortilla’s revitalisation efforts. The company has invested in improving its food offerings, enhancing brand awareness, and upgrading technology.
Tortilla’s in-store like-for-like sales showed signs of improvement, progressing from a decline of 6% in March to a growth of 4% by September. These improvements underscore the effectiveness of their strategic investments in the UK market. The Board remains optimistic about the substantial growth opportunities ahead.
Leadership Reshuffle
Tortilla has seen recent changes in its leadership team. CEO Richard Morris was succeeded by Andy Naylor. Additionally, Maria Denny joined the board in the first quarter, bringing new perspectives to the company’s strategic direction.
These leadership changes are expected to drive new initiatives and contribute to the company’s growth aspirations both in the UK and internationally.
Future Outlook
The Board of Tortilla remains confident and excited about the company’s long-term growth prospects. They are looking forward to capitalising on opportunities both in the domestic market and abroad.
Tortilla is committed to continuing its efforts to drive growth through strategic investments in new markets and innovations in its product offerings.
The outlook for Tortilla appears positive, with the company’s focus on expansion and revitalisation efforts expected to yield significant benefits in the coming years. Their strategic initiatives are aimed at achieving sustainable growth and enhancing overall profitability.
In summary, Tortilla’s exit from Deliveroo marks a significant shift in its business strategy, focusing on long-term growth in Europe. While this decision has led to a short-term decline in revenue, the company’s investments in new markets and revitalisation efforts in the UK are beginning to show positive results. Tortilla’s leadership remains confident in their ability to drive sustainable growth in the coming years.
