Tortilla Mexican Grill PLC, a fast-casual Mexican restaurant business, on Monday said a challenging summer and ongoing macroeconomic headwinds were to blame for a poor interim profit performance.

In the first half ended July 3, Tortilla reported pretax profit of £300,000, down 88% from £2.6 million a year prior.

Tortilla shares plummeted 28% to 104.20 pence in London on Monday morning.

This was despite higher revenue, which was up 30% to £26.9 million from £20.8 million.

Tortilla said it lost £250,000 of sales over the summer period due to a combination of train strikes, the heatwave, and pent-up consumer demand for overseas holidays.

It added that inflationary cost pressures remain challenging. Protein costs, which account for nearly a third of Tortilla’s expenses on products sold, are expected to rise by 40%. This is expected to drive down gross profit margin by about £1.8 million.

However, Tortilla remained optimistic about the possibility of strategic expansion across the UK.

It argued that its acquisition of Mexican food chain Chilango for £2.8 million would strengthen its property pipeline for the 2023 financial year.

Sales in central London were trading at 98% of their pre-Covid levels, which the chain said was a positive sign for the Chilango takeover.

Chief Executive Officer Richard Morris said that while times were tough, he was ‘confident in our ability to successfully navigate our way through these industry-wide challenges whilst continuing to deliver against our ambitious growth strategy.’

Tortilla did not declare an interim dividend.

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