​Tortilla's Impact on Revenue Following Deliveroo Decision

Fast-casual Mexican restaurant group Tortilla has reported a decrease in revenue for the half-year ending 30 June 2024. The company's revenue has fallen by £1.2 million compared to last year's period, bringing the total to £31.5 million.

This revenue decline, a 5.9% drop, is attributed to Tortilla's recent decision to terminate its delivery partnership with Deliveroo. Instead, the chain has focused on Uber Eats and Just Eat for its delivery services. Despite the decrease in revenue, Tortilla has highlighted that this strategic move has improved profitability on delivery sales and has allowed the company to increase its emphasis on in-store revenue.

The company's adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) remained steady at £1.8 million, consistent with the first half of last year. However, Tortilla anticipates that the benefits of its strategic initiatives will take longer to materialise than initially expected. Coupled with a challenging trading environment, the company forecasts an adjusted EBITDA of £5 million for 2024.

Andy Naylor, Tortilla's Chief Executive, expressed optimism about the company's strategic direction. "We are now seeing the positive implementation of our strategy as we continue to strengthen Tortilla's offering and position the business to capitalise on the long-term significant opportunities in our market as the dominant European market leader in fast-casual Mexican cuisine," he stated.

Tortilla's expansion efforts are evident as the chain now boasts 81 UK sites, including a new outlet at Manchester Arndale Centre opened in May. The group has also completed six kiosk store conversions this year, following a conversion at London Wall in August last year. New franchise sites have been established in Leeds train station and Leicester.

In addition to expanding its physical presence, Tortilla has been enhancing its menu. Food improvements trialled in the second quarter have been implemented across stores, with early results indicating a positive reception. These efforts have been spearheaded by James Garland, who joined the company as the new Food Director in June.

June also marked Tortilla's entry into continental Europe with the acquisition of French rival Fresh Burritos. This acquisition added 13 company-owned leasehold sites in Paris and other major French cities to Tortilla's portfolio, along with the rights to the Fresh Burritos brand and its network of franchised locations.