Fulham Shore, the company behind the Franco Manca pizza chain, has announced a substantial pre-tax loss of £14.2 million for the year ending March 2025. This figure represents a near threefold increase from the £5 million loss reported in the preceding year, according to recent Companies House filings. The significant downturn follows a period of extensive restructuring within the restaurant group, including a swathe of closures and the divestment of its Real Greek chain.
Despite a reported 72 per cent increase in revenue to £1.7 million, the group's financial performance was severely impacted by considerable exceptional costs. These included an £11 million write-down attributed by auditors to “adverse trading performance,” alongside £442,000 in restructuring expenses. These exceptional items collectively weighed heavily on the company's turnover, contributing to the widened losses.
The financial challenges coincide with a period of significant operational change for Fulham Shore. In April, the company undertook a drastic restructuring of Franco Manca, resulting in the closure of 16 locations, notably its original site in Brixton Market, and the redundancy of 225 employees. Concurrently, The Real Greek chain was placed into administration, with 19 of its 28 outlets subsequently acquired by Karali Group, owners of Cote Brasserie.
Former Fulham Shore chief executive, Marcel Khan, who resigned at the end of May, previously attributed the hospitality sector's difficulties to what he described as “disproportionately high” taxes. This sentiment is echoed by current chief executive Colin Berry, who stated that the results, preceding the restructuring, “highlight the challenges facing the sector.” He added that the industry faces an operating environment with “elevated cost of inflation and VAT that is significantly higher than our international peers.”
To support its turnaround efforts for the remaining Franco Manca restaurants, Fulham Shore has secured additional financing. This includes a £21 million loan from its owners, Japanese restaurant group Toridoll, and a £12 million credit facility from HSBC. The company asserts that these strategic moves and sell-offs are intended to place Franco Manca on the “strongest possible footing to realise its long-term potential.”
The plight of Fulham Shore mirrors a broader trend within the UK hospitality sector, where numerous businesses have been compelled to scale back operations. Industry leaders, including celebrity chef Tom Kerridge and major players like Greene King and Hilton hotels, have launched a campaign advocating for a reduction in VAT on pubs, bars, and restaurants from 20 per cent to 10 per cent, arguing it is crucial for preventing further business failures. Some have also endorsed political figures pledging to address business rates and VAT for the sector.