Tortilla UK posts record H1 profits amid European expansion

Tortilla has reported record profitability in its UK operations for the 26-week period to 29 June, which has helped offset early-stage investment losses in France as the company continues its European expansion. 

The fast-casual Mexican restaurant group revealed that its adjusted EBITDA in the UK rose 33% to £2.4m, which was attributed to higher gross margins, tighter cost control and sustained consumer demand. 

Group revenue for the half-year increased 14% to £36m while group adjusted EBITDA reached £1.2m, reflecting the impact of losses in France linked to its Fresh Burritos conversion programme.

The board said it expects the current financial year to be the most profitable in the UK in the company’s history, despite the pressures facing the broader casual dining market.

International growth advanced through the rebranding of acquired Fresh Burritos outlets in France. Four sites are already trading under the Tortilla name, with two more set to open by early October. A central production kitchen in Lille has been established to support future growth across France and neighbouring markets, led by French managing director Gilles Boehringer, formerly of KFC France.

In the UK, like-for-like sales rose 5% in the first half, which has outperformed the sector benchmark that showed revenue declines. According to Tortilla, its growth has continued into the third quarter so far, with sales up 7% to date. 

Andy Naylor, chief executive of Tortilla, said: “FY25 is forecast to be our most profitable year ever which is an achievement the team should be proud of considering the wider challenges reported by the sector. In France, despite the short-term challenge with the timing of store conversions, we remain confident of the longer-term prospects for our brand in this market following our strategic acquisition last year.”

The company continued investing in digital ordering, rolling out 25 more self-service kiosks, bringing the total to 34 sites. These locations are performing ahead of the estate average, according to the group.

Franchise growth also added further outlets in the UK, Middle East and France. New travel hub restaurants were opened by partner SSP, while Compass Group maintained its university campus sites. The global franchise estate now totals 37 restaurants.