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Equity Bottom-Up

Tortilla Mexican Grill PLC / Equity Bottom-Up

<p>Notwithstanding its sector ‘sweet spot’ (a healthy, customisable product at a competitive price), Tortilla Mexican Grill (Tortilla) has taken the opportunity of a change in management to refine its strategy to address challenges since its successful IPO in 2021 as well as expedite growth. Significant benefit is expected from a new delivery structure to mitigate commission charges in an important part of the business (c 30% of sales), from enhanced marketing to tackle surprisingly low brand awareness and from an initial director of food to bolster menu development. With a new FY24 target of self-funded roll-out (down from 12 to eight), franchising will drive expansion as capital light and has been so successful to date. A near-doubling in H223 pre-IFRS 16 adjusted EBITDA, if from a low base, is testament to Tortilla’s recovering financials and initiatives already in place.</p>

Notwithstanding its sector ‘sweet spot’ (a healthy, customisable product at a competitive price), Tortilla Mexican Grill (Tortilla) has taken the opportunity of a change in management to refine its strategy to address challenges since its successful IPO in 2021 as well as expedite growth. Significant benefit is expected from a new delivery structure to mitigate commission charges in an important part of the business (c 30% of sales), from enhanced marketing to tackle surprisingly low brand awareness and from an initial director of food to bolster menu development. With a new FY24 target of self-funded roll-out (down from 12 to eight), franchising will drive expansion as capital light and has been so successful to date. A near-doubling in H223 pre-IFRS 16 adjusted EBITDA, if from a low base, is testament to Tortilla’s recovering financials and initiatives already in place.

<p>Tortilla Mexican Grill’s (Tortilla’s) continued ‘massive’ outperformance of the UK restaurant market despite, and because of, COVID-19 is further endorsement of the company’s difference to most UK hospitality businesses. Tortilla’s ‘transformational’ 2021 saw 24% like-for-like sales growth versus 2019 (adj. pre-IFRS 16 EBITDA more than trebled) followed by similar momentum in Q122 and heightened optimism about growth opportunities accelerated by the pandemic, which echoes that of big brother Chipotle (NYSE: CMG) in the US. With its popular value offering in tune with the times and scalability shown by burgeoning partnerships with SSP Group, Compass Group and Merlin, Tortilla is on track for 45+ company-run openings by end 2026 (c nine this year) backed by a cash-generative model, low site capex and c £14m liquidity at December 2021.</p>

Tortilla Mexican Grill’s (Tortilla’s) continued ‘massive’ outperformance of the UK restaurant market despite, and because of, COVID-19 is further endorsement of the company’s difference to most UK hospitality businesses. Tortilla’s ‘transformational’ 2021 saw 24% like-for-like sales growth versus 2019 (adj. pre-IFRS 16 EBITDA more than trebled) followed by similar momentum in Q122 and heightened optimism about growth opportunities accelerated by the pandemic, which echoes that of big brother Chipotle (NYSE: CMG) in the US. With its popular value offering in tune with the times and scalability shown by burgeoning partnerships with SSP Group, Compass Group and Merlin, Tortilla is on track for 45+ company-run openings by end 2026 (c nine this year) backed by a cash-generative model, low site capex and c £14m liquidity at December 2021.

Tortilla Mexican Grill - That’s a wrap!

United Kingdom

Tortilla Mexican Grill PLC owns and operates a chain of fast-casual Mexican restaurants. The Company offers fresh and customizable products range of burritos, tacos, quesadillas, and salads. Tortilla Mexican Grill serves customers in the United Kingdom and Middle East.

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Tortilla Mexican Grill PLC (MEX LN)

Tortilla Mexican Grill - Cracking on

Notwithstanding its sector ‘sweet spot’ (a healthy, customisable product at a competitive price), Tortilla Mexican Grill (Tortilla) has taken the...

Edison Investment Research

Tortilla Mexican Grill - That’s a wrap!

Tortilla Mexican Grill’s (Tortilla’s) continued ‘massive’ outperformance of the UK restaurant market despite, and because of, COVID-19 is further...

Edison Investment Research

Price Gauge

52-week Range

Market Cap (USDm)

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