Mexican restaurant chain Tortilla to float on AIM

Mexican restaurant chain Tortilla said on Friday that it’s planning to list on the London Stock Market and open up 45 new sites over the next five years.

The company, which has 62 sites worldwide - 50 in the UK - is planning to list on London’s junior AIM market.

The group said the economic challenges facing the hospitality sector have resulted in a dramatically increased number of vacant units on the market with rent levels rebalancing to more sustainable levels, "providing Tortilla with an unprecedented opportunity to accelerate its UK rollout strategy".

Chief executive Richard Morris said: "Since its launch in 2007, Tortilla has established a long-term track record of strong financial performance driven by considered expansion of the property portfolio and like-for-like growth.

"The business has shown itself to be extraordinarily well positioned throughout the pandemic, as the Tortilla product proposition is well-suited to the growing delivery market and we have proved the brand's flexibility to operate across a range of locations and formats, including smaller sites and cloud kitchens.

"We believe that this IPO unlocks our ability to consolidate on this momentum and enables us capitalise on significant long-term growth opportunities in the post-Covid-19 pandemic landscape."

Emma Woods has joined the board of directors as non-executive chairwoman and Laurence Keen as a non-executive director. Woods has extensive experience at board level in multi-site leisure businesses and is currently a non-executive director for The Gym Group. She was also CEO of Wagamama from December 2018 to June 2021.

Russ Mould, investment director at AJ Bell, said that given the background of a mounting cost of living crisis and staffing shortages it might not seem like the most opportune time to list a restaurant chain.

"So, it is a show of confidence from Mexican fast food concept Tortilla to press ahead with its IPO plans regardless," he said.

"It has heavyweight backing in former Wagamama CEO Emma Woods who has joined as chair. Emulating what Wagamama has achieved in Asian dining with its Tex-Mex offering would be a laudable ambition for Tortilla.

"As a relatively new brand, the company was agile enough to respond to the challenges posed by Covid-19. Shifting its focus to delivery and operating across smaller sites and using so-called cloud kitchens which only produce food to send to people’s homes.

"The good news for Tortilla is that thanks to the pandemic there are plenty of vacant units around with affordable rents which it can use to expand.

"However, selling burritos and fajitas is hardly a ground-breaking concept and there are plenty of lookalikes in the UK. Tortilla will have to work hard to win that wrap battle."