Fulham Shore to target higher return on capital

Franco Manca and Real Greek operator Fulham Shore will start targeting a higher return on capital in the coming years.

Commenting on the group’s financial results for the six months ended 27 September, chairman David Page said: “The ongoing damage to the property and restaurant sectors will allow us to prospect for new sites at much reduced rents and lower capital costs per site. As such, over the next few years and once normal trading conditions return, we will target a higher return on capital than we have historically achieved.”

The group reported a 44.9% drop in revenue to £19.9m during the period as a result of national lockdown restrictions. It also reported headline earnings before interest, tax, depreciation and amortisation (EBITDA) of £3.7m, compared to £8.4m during the same period last year.

Fulham Shore raised £2.25m this year from an equity placing and subscription, and as of 17 December 2020, had net debt (excluding lease liabilities) of £3.7m with an undrawn debt facility of £11.5m out of total facilities of £25.75m.

Page added: “Following the period end, on 5 November 2020, most of our restaurants closed again to dine-in customers following the UK government's second national lockdown. These restaurants were then permitted to re-open on 2 December 2020 to dine-in customers, with certain restrictions.

"However, as at the date of this report and from 16 December 2020, the majority of our estate is once again closed to dine-in customers as London entered Tier 3 restrictions, while Surrey and Berkshire will enter Tier 3 restrictions from 19 December 2020. The situation is fluid and changes frequently and with little notice.

“Despite the near-term uncertainty, the board remains confident in the long-term strength of the group and believes it is well-positioned to both deliver strategic growth and capitalise on opportunities as a sense of normality resumes.”