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Tortilla’s revenue hit by rising protein costs and customers eating in-store rather than ordering online

Tortilla’s profits plummeted 93% due to rising protein costs and customers opting for in-store dining over more expensive delivery.

  • The fast-food chain’s shares fell a third to 97.4 pence on Monday
  • Removed Covid restrictions and added sites increased sales by 30%
  • Tortilla warned that protein costs will jump about 40% this year.

Tortilla Mexican Grill admits that rising protein costs caused by Russia’s full-blown invasion of Ukraine are hurting its bottom line.

The fast-food chain reported a nearly 93% drop in profit from £2.29 million a year earlier to just £156,500 in the 26 weeks to early July, but trading remained relatively strong. .

Revenue increased 30% to £26.9m thanks to the lack of Covid-related restrictions on non-essential outlets, the addition of new sites and strong underlying sales growth.

Earnings: Tortilla Mexican Grill’s profits have fallen by around 93% from £2.29m a year earlier to just £156,500 in the 26 weeks to early July, it was revealed.

However, the London-based company said its gross profit margin had fallen, mainly due to a temporary discount in VAT rates on supplies to hospitality facilities ending in March.

Also, the share of store orders is growing, which is about 20-35% lower than delivery to customers, and the cost of protein has skyrocketed due to the war in Ukraine.

Tortilla warned that the cost of protein, which accounts for about a third of all expenses, will surge by about 40% this year, adding £500,000 to utility bills.

It said steps were being taken to minimize cost increases, but the group expects inflationary pressures to have a £1.8m impact on gross profit for the full year, with no price hikes or significant We are wary of introducing discounts.

The company’s CEO, Richard Morris, said:

The company said its difficulties were exacerbated by a “more difficult than expected” trading environment over the summer.

Following this announcement, Share of Tortilla Mexican Grill It fell a third to 97.4 pence on Monday, representing a 46% drop from its listing 12 months ago.

A portion of the proceeds from the food distributor’s initial public offering was used to expand its store footprint, expanding from 62 locations in September 2021 to 84 locations in the UK, Republic of Ireland and the Middle East .

Many of the new stores belonged to former rival Chilango, which was acquired by the business in May for £2.75m, while others are franchises run by catering giant Compass Group and Upper Crust owner SSP Group. is.

Tortilla said it plans to open 12 to 15 more venues from next year to capitalize on a ‘depressing’ commercial property sector and strong performances outside of London.

However, the AIM-listed company also noted that it has had impressive deals in the capital, with sales in “Zone 1” destinations slightly below pre-pandemic levels.

Richard Morris added:

“Our strong top-line growth significantly outperformed the overall market, reflecting Tortilla’s growing reputation for high value, high quality food.”


https://www.dailymail.co.uk/money/markets/article-11274149/Tortillas-earnings-hit-rising-protein-costs-customers-dining-store-ordering-online.html?ns_mchannel=rss&ns_campaign=1490&ito=1490 Tortilla’s revenue hit by rising protein costs and customers eating in-store rather than ordering online

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