Franco Manca and The Real Greek owner Fulham Shore says London restaurants are still under the weather

 
Alys Key
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Franco Manca's owner has increased the number of restaurants in London despite underperformance (Source: Franco Manca)

Restaurants in London suburbs are still a concern for Franco Manca and The Real Greek owner Fulham Shore.

Earlier this year the restaurant group's shares dropped 22 per cent after a gloomy trading update, which warned that restaurants in the London suburbs were performing badly and had not received an expected summer uplift.

Today the company said this was still the case, and that its newer openings in nearby areas could even "cannibalise" some branches.

But for the six months ending 24 September, the group posted a £27.5m increase in revenue, mostly due to new openings. Earnings before interest, taxation, depreciation and amortisation rose to £4.5m, while profit was almost flat at £600,000.

Net cash flow declined to £800,000, and net debt tripled to £9.7m.

Meanwhile the group suffered a £300,000 impairment after discontinuing operations at D'Arblay Street in Soho while it seeks a buyer.

Despite the challenging background in the restaurant industry, Franco Manca has made another investment in upcoming pizza brand Made of Dough, a hipster joint currently operating in Peckham and Brixton.

Fulham Shore is not the only restaurant company struggling to cope with inflationary cost pressure, dwindling consumer confidence and increased labour costs.

Family-oriented eatery Giraffe has only just narrowed its losses after coming under new ownership. Others including Comptoir Libanais, Wildwood owner Tasty and The Restaurant Group have all flagged declines this year.

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