Shares in The Fulham Shore (FUL), operator of the Franco Manca and Real Greek restaurant chains, jumped as much as 9% to 17.5p in early trading after the firm posted a highly encouraging first quarter trading update.
At present 70 of its 72 restaurants are open for al-fresco dining, delivery and collection services. Of these, only 55 restaurants have outside dining areas, yet sales in the week to Sunday - the first week that restrictions were lifted - were ahead of the same week in 2019.
‘These trading results were achieved without any inside seating and our colleagues in the restaurants deserve great credit as demand has far exceeded the number of seats available at peak times’, said executive chairman David Page.
ROLL-OUT STRATEGY
Encouraged by the resurgence in demand, the firm is pressing ahead with its search for new outlets and has inspected several sites across major cities in England and Scotland in the last fortnight.
It is also reviewing offers of top-quality potential sites ‘almost on a daily basis’, with many of the locations coming available already fitted out and being offered as a result of insolvencies.
Such sites have a lower opening cost compared with empty shell units, so the group’s capex per new site will be lower than normal, which in turn means its return on capital will be higher.
EXCITED ABOUT GROWTH
We flagged the growth potential for The Fulham Shore in our preview of the reopening of the hospitality sector last week and noted its lower cost of opening compared with prior years.
‘The Board believes that the next few months may be the most exciting in the group's short history, and looks forward to opening our restaurants fully once permitted and capitalising on the property opportunities that are being presented to us’, added Page.
