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It has been an unprecedented 15 months for Fulham Shore (FUL:AIM). The challenges have been varied and significant following the onset of the coronavirus pandemic, including changing regulations, the opening and closing of restaurants, restrictions on international travel and the associated elimination of tourism, and a dearth of office workers.
After many, many other false dawns, Fulham Shore has emerged as a strong survivor - a successful, cash generative, and growing restaurant business.
Fulham Shore owns and operates 55 Franco Manca and 19 The Real Greek restaurants, all of which offer dine in, delivery to home and take out services. The business will open its milestone 75th store at the end of August, when the 20th Real Greek restaurant opens in Norwich.
In line with the group’s growth strategies and following successful recent openings, both brands have restarted an accelerated expansion programme. This roll out takes advantage of the availability of well-located premises at much improved rents, often with beneficial lease incentives. Within these favourable terms, each site costs on average £700k to buy and fit out and has a target three-year payback.
The group plans to open five more new Franco Manca and three The Real Greek restaurants in well-located sites throughout FY22, taking Fulham Shore’s total estate to 82. The Group’s long-term ambition is to operate over 180 Franco Manca sites (from 55 currently) and 50 The Real Greek sites (currently 19).
THE PROPOSITION
The Fulham Shore’s 74 UK restaurants serve delicious, affordably priced food in enjoyable buzzy surroundings.
Franco Manca was founded in 2008 and acquired by Fulham Shore in April 2015 - the business specialises in Neapolitan pizza made from slow-rising sourdough. The focus is on value for money, fresh ingredients and ‘keeping it simple’, an approach which ensures the menu is maintained at a low spend her head. Fulham Shore has grown the business from 11 to 55 sites in six years, serving over 100,000 pizzas to happy customers each week. Seven new restaurants were opened during FY20, and whilst this expansion programme was slowed to two new pizzeria in FY21 due to Covid-19, it has now restarted at pace.
Franco Manca has the ability to trade from a variety of property sizes and is building a strong UK-wide pipeline for FY2021/2022. Successful openings in Edinburgh, Glasgow and Manchester are testament to the business’s expansion strategy.
Within the UK, the business also enjoys engagement with 250,000 customers through its loyalty app, which launched in late 2019.
Fulham Shore also plans to replicate its UK success internationally by franchising Franco Manca pizzeria all around the Mediterranean following a successful two-year experiment on the island of Salina in Italy which opened in 2018.
The Real Greek was acquired by Fulham Shore in October 2014 and prior to the acquisition had been trading successfully in London for 15 years. Fulham Shore has grown the business from six to 19 restaurants in seven years.
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. Ingredients and products are sourced mainly from Greece and Cyprus with cold and hot mezes being a main feature on the menu.
A vegan menu was launched in Spring 2018 to great acclaim.
The expansion of The Real Greek continues outside its base of London and the Home Counties with a pipeline of new sites both within and outside the M25.
COMPANY HISTORY
The Fulham Shore was incorporated in 2012 and admitted to ISDX Growth Market in February 2013. In October 2014 the company was admitted to AIM and acquired Kefi Ltd, the owner of The Real Greek. In April 2015 Fulham Shore acquired Franco Manca, which at that time comprised 11 pizza restaurants.
The business’s growth strategy focuses on driving profits through expanding both brands, throughout the UK, whilst both businesses maintain their value for money menu propositions. Franco Manca is £10 a head and The Real Greek is £16 a head.
Revenue, headline EBITDA (earnings before interest, tax, depreciation and amortisation) and operating cash flow have all increased, year on year save for FY21 due to the impact of Covid-19.
Today, Fulham Shore is well funded with a net cash position and has significant headroom in its banking facilities to support its expansion plans alongside internally generated cash flow. As of August 2021, the company is capitalised at around £100 million.
Looking ahead, the business’s focus on consistency, value for money, food quality and provenance, combined with its well-invested estate and strong pipeline of new locations, stands it in strong stead for resumed rapid growth and an exciting future.
DISCLAIMER: This article was written by Fulham Shore and published by Shares under a commercial agreement. It is not a recommendation to buy or sell the shares. The article originally appeared in Shares’ Spotlight report on 26 August 2021.
