Tortilla flags £2.5m accounting irregularity in French business
The brand is also restructuring its business in France.
Tortilla Mexican Grill plc has identified items of operating expenditure in its French business of up to £2.5m, which had been recognised on the group's balance sheet during FY2025 and potentially FY2024, but which were not expensed through the profit and loss account in the relevant periods.
Read the full release here:
Tortilla Mexican Grill plc, the largest fast-casual Mexican restaurant business in the UK and Europe, today provides an update on its results for the 52 weeks ended 28 December 2025 ("FY25") and on current trading.
FY25 and FY24 accounting adjustments
Following review by the new Board and management team of the Group's year-end financial position as part of the 2025 audit process, items of operating expenditure in the French business of up to £2.5m have been identified which had been recognised on the Group's balance sheet during FY2025 (and potentially FY2024), but which were not expensed through the profit and loss account in the relevant period(s). The Company's review is ongoing and will be completed as part of the audit of the FY2025 accounts.
As a result, Group FY25 Adjusted EBITDA (pre-IFRS 16) is now expected to be up to £2.5m lower than indicated in the trading update of 28 January 2026, with a corresponding adjustment to the FY2025 closing balance sheet. Accordingly, the Board now expects Group FY25 Adjusted EBITDA (pre-IFRS 16) to be around £1.5m. Guidance on FY2025 Adjusted EBITDA for the UK business remains unchanged at around £6.5m.
The adjustment relates to the classification of certain operating costs and has no impact on the Group's FY2025 cash flow or its reported adjusted net debt position at the period end, which was £10.7m as previously reported. Whilst this adjustment now leads to potential retrospective covenant breaches, the Company is in discussion with its lender about appropriate waivers should that be the case. The Company has received increased facility headroom from its lender. As at 26 April 2026, net debt was £11.4m.
The Company's auditors are continuing their work on the FY2025 audit and the final figures remain subject to completion of that process. The Board, supported by the new finance leadership team under CFO Richard Haley and a strengthened finance team, is putting in place appropriate additional financial controls and review procedures in France. The Board will provide a further update with the Group's audited results, together with an update on the outlook for FY2026, which the Board expects to publish in June 2026.
France: significant operational restructuring underway
Separately, and prior to the identification of the accounting matter described above, the new Board and management team had already initiated a structural reset of the French business to address its losses and accelerate the path to profitability. Actions taken in recent weeks include:
• Head office cost reduction. The majority of a planned reduction in French head office personnel costs by approximately 50% has been implemented, with the remaining changes underway. Once concluded, the total reduction will materially lower the fixed overhead of the French operation, with ownership of several functions being transferred to the UK head office.
• Estate rationalisation. A programme is underway to exit a number of underperforming Fresh Burritos stores in the French estate, focusing capital and management attention on the strongest locations, all of which have been converted to the Tortilla brand.
• Driving further growth in converted stores. Stores already converted to Tortilla continue to perform strongly with like-for-like sales of +16.6% in the 20 weeks ended 17 May 2026.
Together, these initiatives, together with the Group's fully operational Central Production Kitchen in Lille, are expected to transform the economic profile of the French business and provide a credible operational platform for the next phase of the Group's European expansion strategy.
UK: strong current trading
Trading in the UK has been strong since the start of FY2026. UK like-for-like sales are running at +12.0% in the 20 weeks ended 17 May 2026, ahead of the +7.8% achieved in Q4 FY2025 and materially ahead of the wider sector CGA tracker benchmark. Performance has been driven by a balanced combination of:
• In-store sales growth of +7.5%, reflecting continued improvements in food, brand, kiosk rollout and guest experience; and
• Delivery sales growth of +25.0%, supported by the Group's multi-aggregator platform strategy, including the return to Deliveroo across 60 UK equity restaurants and continued strong performance through Uber Eats and Just Eat.
The strength of UK trading underpins the Board's confidence in the Group's underlying performance and in the trajectory of the business under the new leadership team.
Commentary
"The UK business has traded exceptionally well thus far in 2026, with like-for-like sales running ahead of both the wider sector and our own strong comparatives. LTM system sales are expected to reach £100m this month. In France, the operational reset we have put in place is on track, with sales at the stores converted to Tortilla trading strongly, and a leaner head office and rationalised estate setting us up for the next phase of European franchise expansion." Brandon Stephens, Founder & Group CEO.
