Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.
6 September 2017
The Fulham Shore plc
("Fulham Shore", the "Company" or "Group")
AGM Statement and Trading Update
At today's Annual General Meeting, David Page, Chairman of the Company, will make the following statement:
In the 2018 financial year to date, Fulham Shore 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 our core brands.
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. A further update will be announced in due course.
Despite hitting our Group targets for the first quarter of this financial year, during the holiday season in July and August the Group has seen a slowdown in trade, primarily from our restaurants in London suburbs. We believe this is a sector-wide trading pattern and not unique to our brands.
In addition to this slowdown in revenue growth, as previously indicated, the Group 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.
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.
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.
The Fulham Shore plc
Telephone: 020 7796 4133
Allenby Capital Limited
Nick Naylor / Jeremy Porter / James Reeve
Tel: 020 3328 5656
Hudson Sandler - Financial PR
Alex Brennan / Lucy Wollam
Telephone: 020 7796 4133
Notes for editors
Information on The Fulham Shore plc
Fulham Shore was incorporated in March 2012. The Directors believed that there were attractive investment opportunities within the restaurant sector in the UK and that, given their collective experience in the restaurant sector, they could take advantage of the opportunities which existed.
The ordinary shares of the Company were admitted to trading on AIM in October 2014 in order to capitalise on such opportunities and to give the company employees, customers and public the ability to share in the enterprise.
Today, Fulham Shore owns and operates "The Real Greek" (www.therealgreek.com) and "Franco Manca" (www.francomanca.co.uk) restaurants, as well as operating a Bukowski Grill restaurant in Soho.
The Real Greek
Since its foundation in London in 1999, The Real Greek group has grown steadily, now offering modern Greek cuisine in 15 restaurants across London and Southern England.
The company is an ambassador of Greek food and Greek hospitality in the UK. The Real Greek food centres on the delicious, healthy diet of the Eastern Mediterranean, staying true to the Greek ethos of food, family and friends. Dishes are created using premium ingredients sourced from Greece and Cyprus whenever possible, and developed by Tonia Buxton, the face of Greek food in the UK.
The Real Greek's menu and atmosphere retain the spirit of eating in Greece, encouraging diners to take their time eating amongst friends and family, be it a relaxed dinner, family get-together, or a fully catered party.
Franco Manca opened its first restaurant in 2008 and now has 40 restaurants, primarily in London, but with recent openings in Southampton, Bournemouth and Reading. Other locations outside London are in the opening pipeline for the next 12 months.
Franco Manca's pizza is made from slow-rising sourdough and is baked in an oven that produces heat of about 500°c (930°F). The slow levitation and blast cooking process lock in the flour's natural aroma and moisture, giving a soft and easily digestible crust. Where possible, locally sourced and organic ingredients are used. Pizza prices start from £4.95.
Winner of the CGA Peach Hero and Icon Awards Best Concept award 2016
"If you only eat one pizza this year, make sure it's at Franco Manca" - Tatler (2011)
"Franco Manca is quite possibly the best pizza restaurant to ever exist in London." - Metro (2016)