- Instagram/Franco Manca
LONDON – Shares in the company that owns sourdough pizza chain Franco Manca and The Real Greek restaurants crashed over 20% on Wednesday after the business issued a profit warning.
Fulham Shore told investors to expect full-year earnings below market expectations but “significantly higher” than last year’s numbers. The company blamed “a slowdown in trade, primarily from our restaurants in London suburbs.”
The company added: “We believe this is a sector-wide trading pattern and not unique to our brands.”
Chairman David Page also warned of “uncertain market conditions” ahead in his AGM statement.
Fulham Shore’s share price crashed over 20% at the open. Here’s how it looks after an hour of trade in London:
Consumer spending has been under pressure in Britain this year as the fall in the value of the pound following last year’s Brexit vote has begun to push up inflation. Retails and the leisure sector are feeling the squeeze, with consumers cutting back on non-essential spending as prices rise.
Page warned in July that the collapse in the pound was already pushing up raw material prices in the restaurant sector, as well as making it harder to recruit staff as EU nationals spurn Britain. He said on Wednesday that Franco Manca and The Real Greek will not raise their prices despite the cost pressure.
However, Page said the company is reviewing plans to open more sites, saying: “Given an increased availability of sites for sale due to the well-publicised pressures on other restaurant operators, we have decided to review our opening pipeline and to seek to improve terms with landlords of new sites we had already identified.”
Fulham Shore also announced plans to sell its third restaurant brand, Bukowski’s Grill, “in order to simplify operations and focus on the Group’s core brands.”