Casual dining group The Fulham Shore (FUL:AIM) pleased investors by raising its earnings guidance for the year just ended thanks to a strong pick-up in second half trading.
Despite rising costs and a lower level of government support, the firm is positive on the outlook for hospitality as customer numbers continue to grow and trading remains ‘robust’. Its shares gained 7.7% to 16.7p on the update.
BETTER THAN EXPECTED
The owner of the Franco Manca and Real Greek restaurant chains said both businesses delivered stronger than expected underlying trading in the second half of the year to 31 March 2022.
The removal of all Covid restrictions in February gave the hospitality sector a significant boost as shown already by results from several of Fulham Shore’s peers.
On top of its strong underlying performance the group grew its sales through the opening of 10 new restaurants in London, Cheltenham and Manchester which were ‘received very well by customers’.
Two franchised Franco Manca restaurants were also opened in Athens during the year as the firm cautiously rolls out its model overseas.
Sales for the year to March 2022 were approaching pre-Covid levels with the result that revenues and operating earnings will be ‘ahead of last year’s figures and comfortably ahead of market expectations’.
The firm says the current consensus is for revenues of £73.4 million and EBITDA (earnings before interest, tax, depreciation and amortisation) of £16.5 million.
SUNNY OUTLOOK
Fulham Shore says it is ‘confident of its exciting potential’ thanks to its brands’ strong value-for-money offerings and the clear growth opportunities it still sees in the UK dining-out market.
There are plans to open 18 new restaurants across both brands this year.
The company said it continues to find and secure ‘desirable sites at favourable rents, supported by high vacancy rates and lower rent levels than at the peak in 2019’.
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