Tortilla Mexican Grill admits multi-million accounting blunder
Shares in Tortilla Mexican Grill tumbled in early trade on Tuesday after the firm admitted to a multi-million pound accounting blunder.
The AIM-listed business said it identified £2.5m of spending in its French arm which was “not expensed through the profit and loss account,” meaning it previously overstated its profits for 2025 and in doing so, breached its debt agreements with lenders.
Tortilla said it was “in discussions” with lenders over agreeing a waiver in the event that debt terms were broken.
Shares in the hospitality firm tumbled as much as 12 per cent to 64p in the opening minutes of trade in London. The stock remains up by 25 per cent since the start of the year.
Tortilla said a review by auditors was “continuing,” adding it “is putting in place appropriate additional financial controls and review procedures in France.”
The company said it was shuttering a number of venues across France as part of a “structural reset” to cut costs.
Tortilla posted a pre-tax loss of £2.3m in the first six months of last year.
Analysts at Panmure Liberum changed their ‘buy’ recommendation to ‘under review’ as a result of the accounting troubles, while Cavendish downgraded its recommendation from ‘buy’ to ‘hold’.
“The reduction in our recommendation to Hold from Buy reflects both the share price performance and the bad news,” Cavendish said.
“Investors perhaps waiting for a bargain need to be cognisant of the risk of further bad news on the accounting front.”