Tortilla Mexican Grill plc (MEX.L) 2026-10-01 Earnings Call Transcript

Good afternoon, and welcome to the Tortilla Mexican Grill plc investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged, and they can be submitted at any time using the Q&A tab situated on the right-hand corner of your screen. Simply type in your questions and press send. Before we begin, I would like to submit the following poll. I would now like to hand you over to CFO, Richard Haley. Good afternoon.

Good afternoon, everyone, and thanks for joining us. I am Richard Haley. I am the Group CFO at Tortilla, and my colleague here is Brandon Stephens, the Founder and Group CEO of the business. We will be taking you through theH1 FY 2026 results. Also, the FY 2025 results as well, but focusing very much on this half and also touching on the quarter. Brandon is also going to update you on the strategy, and he will start with a lead-in to what we have been up to for the last eight months since he came back into the business as the Founder. Let us get stuck into it. This is us. Do you want to

Yeah.

Quick intro.

A quick introduction. My name is Brandon Stephens. I am the Founder of Tortilla. Started the business in 2007 in Islington, grew the business to 15 sites over seven years with five rounds of financing. Hired in a Managing Director, Richard Morris, who then successfully grew the business for the next decade or so, up to a sizable level. We IPO'd in 2021, acquired one of our competitors, Chilango, and then acquired Fresh Burritos in France. That brings us to our present day now.

Yeah. I am Richard, as I said, the Group CFO. My background is in a lot of other consumer businesses, retail, entertainment, and as well as hospitality. Let's get into what we have been up to the last eight months.

Yeah. For the last eight months, we have been very busy. We have put in place a number of changes that I am going to just rattle through right here. One is, and we will talk about this first and foremost, is addressing our challenges in France. We have put in place a robust set of processes, policies, personnel, and sorted out a number of the accounting issues that were reported in the media, and as part of our results. Part of that has been going through a fairly ruthless program of closing our underperforming stores in France, including the five that were unconverted, and restructuring the team there in order to reduce down the head office costs that we had there. We have also put in place a restructured Santander loan facility, which has been instrumental in seeing us through a few challenges at the beginning of the year. We have launched Deliveroo and you may have seen in our results that has been hugely successful with our multi-aggregator policy. Rolled out generative AI and agentic AI, and actually a number of different tech initiatives, including the Oracle EPOS program. Over the years, we have been with a particular EPOS platform that has not really provided the foundations for the type of technology stack that we want to have. That is now getting rolled out across the estate. A lot of the changes that we have made is around the head office, making sure that we have the right people in the right places. We have moved some folks into transformation roles. We have hired in certain gaps, and we are very pleased with the team moving forward. We have exited a number of underperforming U.K. stores, and we are going to have a slide that we can show you later around the progress, particularly with a cohort in 2022/2023 that we rolled out, which were underperforming and in secondary and tertiary locations. We have been renewing our franchise relationships with SSP and Compass and some outreach. We will talk about that. We have put in a lot of cultural foundations. One of the challenges we had with France was that it was treated as a separate entity without the oversight that we needed from the U.K. team. So we now have a One Tortilla approach with the French team reporting into the U.K. team, and that has been very fruitful. Importantly, we have put in place a multi-year value creation plan. We have a strategy moving forward for the next couple of years across all departments, and we will talk through a few of those. And of course, continue to do brand enhancements. We will show you a couple pictures of our sites in Leeds, which are what the basis of the French stores are as well.

Great. Let's get stuck into the financials. From a group point of view, let me take you through these. Our last 12 months of system sales, that is total sales across our entire equity stores and our franchise stores, hit GBP 100 million. That is a milestone for us, quite a significant number. Our overall revenues for the group were up 6%-38.5%, including group LFLs at 13.3%. But I will break this down by territory because I think it really is a story of two different countries of France and the U.K. And then further over to the right, I am really pleased that our last 12 months of average unit volumes, that is basically the average sales for a store, hit over GBP 1 million. That is just a progression of our system-wide sales across the various years and where this year and where we are actually at GBP 103 million, so it continues to grow. This is not a one-off blip. But let's get stuck into the U.K. numbers. Here, U.K. makes up over 90% of the group's revenue, actually, first of all. In H1, we hit 13.9% LFLs, and I will take you through the split of that between in-store and delivery shortly. Our total revenue was up to GBP 35.4 million, a 7% increase over last year. That is despite five stores, some being shut last year and two underperforming stores that we closed this year. So a smaller number of stores, but still, we grew the absolute value of sales. Our gross margin in the U.S. is 75.5%, so it is still strong. It has dipped slightly from last year, mainly some headwinds on our food input prices. That has knocked about 0.7% margin off, and then just the way that we treat discounts now is slightly different, goes into gross margin, whereas previously it was in reported administrative expenses. Again, that is about another 0.7 on the margin. Restaurant EBITDAs remained broadly flat despite some pretty tough headwinds on labor costs that I will touch on a bit later, as well as some incremental costs on delivery, which actually we are addressing and have got some levers to reduce now. And over on the far right-hand, U.K. continues to be profitable. On the right-hand side, we have got adjusted EBITDA that is up from GBP 2.4 million -GBP 2.6 million, and average unit volumes of over GBP 1 million per site. It is a pretty strong set of robust set of H1 numbers there. Just moving on to what that looks like then in terms of our like-for-likes. It is always great to have a graph that goes from bottom left to top right. This is us against the CGA, so the restaurant industry as a whole, and this is how, the red line, we have performed. Driven by a couple of things really. One is moving to multi-aggregator. I will split out delivery and in-store on the next slide and touch on that. But the really great news is we have continued that growth through the H1 and through the Q3, which we have just finished to date, and significantly outperforming the market. On delivery versus in-store then. The red line is our in-store. It looks relatively flat, but actually we are growing at 10% in-store, which is very healthy indeed. The teal line is our deliveries and that is, since going multi-aggregator, so we basically brought Deliveroo on board. We were already with Just Eat and Uber. That has opened up a whole new cohort of customers, which we did not really have access to on delivery before. There is not a lot of sales cannibalization from customers who are on Uber or Just Eat and Deliveroo. That uptick from February has just meant that we have been able to get more burritos out to more people on the delivery platform. And actually we think that is a pretty good way of marketing our brand and has helped to drive the in-store footfall where people have tried our burritos at home, they love them, and then next time they are walking past one of our sites, they might pop in rather than going somewhere else.So actually, we see delivery, the continued strength and growth of delivery as being a real help for our in-store sales. Our restaurant EBITDA margin generally has improved over the years from FY 2023, 2024 through to 2025 and into 2026. It has flattened off a bit. I think everyone is feeling the effect of those above inflation labor costs. But we do have a number of margin enhancing initiatives in place, and we will talk a bit later about our ambition to grow our margin from where we are at the moment to hit a 20% EBITDA margin for our restaurants.

In France, which is the real topic for the day, we have addressed the accounting issues. Richard has taken a forensic approach to making sure that we have the right people in place, that we have harmonized our platforms across the U.K. and France, that we have the right systems to make sure that we have reviews taking place in the U.K., and the challenges that we had with the reporting previously have been dealt with. FY 2025 is in the past, and we are moving forward. Importantly, as I mentioned before, we have rationalized the estate there. We have eight stores that remain, seven of which are converted into Tortillas. One we are taking a view on, but we hope to keep. But the LTM losses for those stores is reduced by GBP 1.1. The LTM losses for those stores that have closed saves us GBP 1.1 million in losses. We've also restructured the head office, so we've reduced down the cost of the head office by GBP 0.4 million on an annualized basis, and we have the right team moving forward. Importantly, with the team reporting into the U.K., and proper oversight. Systems alignment, we've put in place a program called One Tortilla, which means that we have a similar POS system or identical POS system, same Sage platform and other technology initiatives that we have, all the data from France coming into the U.K. data warehouse so that we're able to provide support over here on reporting and things like that. We're aligning those systems so that we have efficiencies and proper management. Delivery has been a huge success over there. Great uplift in the U.K., but over in France, we've had an 88% increase in like for likes with a real focus on this. As Richard mentioned, that gets burritos into the hands of people that don't necessarily know the brand, and then when they walk past, hopefully they'll come in. One of the challenges we had when we launched France was we took a U.K. approach to our marketing. So we were using assets and communications that assumed that the customer understood what a burrito was, what tacos are, what carnitas and some of our toppings are. We've now gone back to 1.0, which is teaching them about what the product is, what the sourcing is, how to eat it, and so forth. One of the things we're most proud of is the food over there. There is no question that we have a great product. In fact, the quality of the ingredients between the meats and things like cheese are actually really high quality in France. Whenever we go over there, we actually think that we've got the best food in the estate in France. Importantly, we've hired in an individual in an operations director role who is French, but comes from the U.K., with extensive experience at Pret A Manger, and he is leading the charge over there. His big focus is around labor costs and customer service. We are now moving forward with a huge reset and the entire head office team or exec team are heading over to France in the coming weeks to do a reset with that team, and kind of relaunch the business, if you will.

Let me take you through the financials then for France. These are really healthy H1 numbers. They're actually already out surpassed by what we've delivered in Q3, but for H1, we did 18.2% like for like overall versus last year. Our revenues actually fell slightly because of the stores that we've closed, but you can see the strength in the like for like numbers. Our gross margin in France, we've really got on top of that. A couple of things in there is that we've got better control over our supply chain there, and sourcing, and also we've adjusted some of the prices to help get that margin. 65.5% at the half on average, but actually by the time we hit June and into Q3, we've hit 70% gross margin for our stores there. Yes, the restaurant EBITDA margin is still negative. There is a lag in there because most of the loss-making stores that we have shut were shut either at the end of the half or into quarter three. We definitely expect that to pop above a positive in the not too distant future. Similarly, adjusted EBITDA, there is a lag there from some of the issues that we have had in the past and the losses, but, as Brandon said, shutting those stores is going to save GBP 1.1 million annualized, and the head office costs will be a further GBP 0.5 million. Our LTM on average unit volumes in France is just over GBP 0.5 Million. Again, that is probably quite out of date where we are for Q3, but we definitely see the potential in France of getting that close to where we operate in the U.K.

Important to mention that we have two stores in France that are now in profitable territory. The adjusted EBITDA that you see there has been halved moving forward for H2, and the EUR 543K for LTM annual AUV includes five stores that we have closed, which were the lowest performing stores. We are feeling very good about the future of the existing estate.

This is just then comparing the U.K. like for likes on a rolling eight-week basis to smooth out some peaks and troughs, with France. You can see the red line is the U.K. This is the sort of uptick from delivery. In France, this has been a much more sustained growth of when we started to take the action about growing sales, managing our marketing much more effectively, and also some switching on of delivery to get burritos into people's hands. The really good news is the growth that we have seen in the first half has continued through into quarter three and where we are to date. France, yeah, 24.4% like for like overall in Q3. That has outperformed the U.K., and the U.K. is doing really, really well as you know.

If you think through the P&L, we have really got momentum on our sales, and that should continue. We have a number of levers and initiatives that we are putting in place. We have sorted out our gross margin, which is now above 70%, and we are now working through the cost lines to make sure that we have our unit economic model in a good shape because ultimately we are in the business of creating a model that works for franchisees for the rolling out of Tortilla across Europe.

Part of our business obviously is franchising, so our franchise sales overall are about GBP 27 million per annum. About GBP 16 million of that comes from the U.K. alone. We also have 12 in the U.K., we've got 10 sites with SSP, four with Compass, and then the Middle East, Eathos is our franchise partner where we've got a dozen sites over there. They've clearly suffered a bit with the war in the Middle East, so this growth that we've seen over the years has dipped slightly in 2026 but is starting to tick up again. We've had the benefit of six new sites opening in 2025, so we get the full year impact of that coming through in 2026. We're just about to launch one more site with Compass on Addenbrooke's Hospital in Cambridge. It looks fantastic. It goes live I think next week. We're really excited about that launch.

We have some additional prospects that we will talk through in just a bit.

Onto free cash flow then. Although our free cash flow has improved by GBP 1.6 million, half one last year compared to H1 this year, as a result of that trading recovering, we've also made some targeted investment in growth. In the U.K., for example, we opened up two new stores. One is Leeds, which has got our new Tortilla 2.0 branding, and then a smaller, more compact unit in Wembley Boxpark. We're in Boxpark Croydon already, so we already know what a smaller format site looks like. We recognize our balance sheet is constrained by cash, so our total net debt was GBP 12.4 million at half against a total facility of GBP 14.4 million. As we have taken radical action in France to reset the business, the costs or the cash costs of that will start to come down, including exceptional items. Adjusted EBITDA will start to go up. The U.K. adjusted EBITDA continues to be strong, so we do see the business's ability to create positive free cash flows as coming much more quickly in the future.

With a huge focus on deleveraging over the coming months and year.

I'm going to skip through the 2025 financials pretty quickly, just flash them up on there. These are really the full year items. We didn't do a full year presentation because of delay to the financial reporting, but these are very much sort of old numbers now. They're just there really in the pack for people to take away. I'm not proposing to go through them in detail. Instead, I want to move on to some of the exciting stuff Brandon's going to talk us through.

One of the important things with the reset that we're doing with Tortilla is putting in place a value creation plan that's multi-year, multi-department. That starts with a new board, which includes Duncan Garrood, one of the few people in the country who have a combination of franchise experience, PLC experience, CEO experience at this stage of business life cycle and chair experience. Marta, a good friend who joins us from Gail's, where she was managing director and then COO. Gregor Grant, who was the CFO at Loungers, a publicly traded firm. We've introduced ourselves, but we've also added Mac Plumpton as U.K. Chief Executive Officer. Mac joins us from Leon, where he was managing director. Importantly, Edson Diaz-Fuentes. Edson was the innovation chef at Wahaca and then owns his own Mexican restaurant chain. He is a Mexican native, and he is bringing the flavor profiles and the authenticity to the food that we are doing, which we believe at the moment is the best we have ever had and will continue to get better. This shows our ambitions, the next 2 slides. We are currently trading or expecting to trade at GBP 1.15 million AUV per annum for 2026. Our ambition is to get to GBP 1.5 million. We have a whole bunch of levers at our disposal to do that. We will talk about those in the valuation plan. A big focus is obviously around the product, not just the quality of it, which is going to improve, we will talk a little bit about that, but actually the breadth of the offering. We see some huge opportunities in day parts and use cases. Importantly, we also want to develop our margin. You will have seen the 16.4% EBITDA margin, that is across the estate. For our mature stores, we are at about 17.5%, and we have a number of levers that are at our disposal. One is obviously around gross margin and further improvements with that, and that will come with scale, especially with an increased franchise base, but also around delivery ops metrics. The more that you improve your ops metrics, the lower the commission rate that you get. Also with things like refunds, we think there is huge ability to improve upon that. If you go down the P&L labor scheduling, one of the reasons that we want to put in place a new POS system was so that we could layer on some of the tech stack that allows us to do more creative things. In this case, the ability to use AI to correctly schedule your labor and optimize is there for us to take. Repairs and maintenance, something that we have not invested well in in the past. We have not looked after our estate as much as we should. We have not been doing the renovations and the refreshes, and so it is a bit of a dated estate. We want to do more preventative maintenance, which would bring down our R&M. Between all these, we believe that 20% EBITDA margin is in our grasp. We think it is really important because ultimately we are creating a product for franchisees, and they want to see those kind of levels in order to be profitable on their terms. In terms of the top 10 key objectives, I will rattle through these and then we will pick up a couple of these as we move forward with the slides. They are focused on product first and foremost. We have a great product now. There has been a lot of investment in that over the next couple of years, but there is further improvements to be done to reach parity with best in class globally, and that is our ambition. We want to build more emotional connectivity with our consumers. That is going to be on social media and other channels. Importantly, and I come from a tech background in Silicon Valley, we are very focused on our tech stack. A lot of people are saying they are embracing AI, we are really putting that at the heart of the technology stack and layering on additional platforms. Franchise is the growth for the future. We have a number of different relationships that we're building right now. We are resetting our relationships with SSP and Compass Group in order to make them even more successful, and we'll talk about that in a little bit as well. The brand conversions in France are effectively done. We have seven converted. We have 1 remaining. We've shut down five. France is, aside from the one site, converted over to the Tortilla brand. Importantly, and probably the most important thing, aside from the building this ability of the business, is creating a franchisable model for Western Europe, because our clear ambitions are to roll this business out across Europe, and be, dare I say, the Chipotle of Europe. We have addressed the short tail of underperforming U.K. sites. We'll talk a little bit about that. We're very keen to modernize the estate. You'll see some pictures of the new Tortilla Leeds. Of course, we're discussing now the three-year value creation plan, and all the initiatives we're putting in place. Importantly, I think we have to maybe speak to the elephant in the room, which is that we've missed all of the profit targets that we've set since we IPO'd. We need to be much more realistic about those targets. They need to be achievable, and the board is all very focused on ensuring that that happens moving forward. I'll skip through a couple of these slides at pace, but this one is an important one. We see a huge opportunity to increase AOV through enhanced desserts, better drinks. We also see the ability to drive trade in the evenings through larger portion platters that can be shared by multiple people. Also, the desserts and the drinks, and other initiatives. We also think that there's some improvement that we can do in breakfast, probably secondary to the desserts, but driving evening trade is a big one. We're also just going to be improving the product itself. There's a whole bunch of initiatives which we may or may not be able to talk about, or our food director might get grumpy with us, but we will be improving our wraps, we'll be improving our salsas, and those are all works that are underway with some equipment that we're putting in across the estate. Also in the channels, corporate offering is a huge opportunity for us. We get orders for burritos, and we have to make 300 burritos that by the time they get to the offices, they're cold. Packaging them up in a way that people can make self-created tacos and things like that are heated up on-site is going to be a huge opportunity. Then stuff specifically for delivery. So family offerings, kids offerings, which would bring up AOV, and bringing up AOV actually has an additional improvement in reducing down the commissions that we pay to the delivery aggregators. On the tech side, as I mentioned, we have green-lit Oracle. We have rolled that out across some of our estate, and we're continuing to do that. That sets the foundation for being able to add to our tech stack. We will be introducing cameras in order to monitor our footfall and be better about our labor scheduling. Also around missing orders and items that might be missing from our delivery. There's a three-year plan for all of this that's being put in place. We've already done a huge amount of agentic AI, where we're tracking prices of our competitors, putting in place competitive dashboards and things like that. We're looking forward to rolling that out, and we have a very busy tech director that is working on that now. Franchise is our big focus on expansion. We will continue to take some equity on stores, but we see a huge opportunity to leverage what is a central production kitchen that's serving food throughout the U.K., an existing franchise base with SSP and Compass that Richard was mentioning before. We've got a robust platform, and we now have three interested potential franchisees that we're talking to about specific regions in the U.K. In Europe, we are starting to have some early conversations with folks, but really you need the unit economic model to be in good shape. But again, our belief is that whenever we look around Europe and we see fast casual Mexican executed well, it works. The ability to use our central production kitchen in Lier, which is 14,000 sq ft, 2.5x the size of the one that we have in Tottenham Hale, to service the Netherlands, France, Western Germany is enormous, and we're very excited to exploit that opportunity. That is the big long-term goal there.

I'll take this one. Yeah, back in 2022, 2023, we, as part of a rapid rollout program, we opened up 15 sites. They were mostly in tertiary or secondary towns and launched at a time when our food, let's be honest, wasn't the greatest and perhaps the marketing around it was not that good. They have continually underperformed the rest of the estate. The gray line is these stores. The red ones are the rest of the estate. What's happened over time, actually, is that those two lines have converged or are converging. The underperforming sites, we've managed to exit two of them earlier this year. That was Gunwharf in Portsmouth and Canterbury was the other one. But the initiatives that we've put in place to focus on these underperforming stores and the growth of delivery has helped lift them up from loss-making sites, which they were two, three, a couple of years back, to actually mostly all profitable. 11 of those 13 that remain are now profitable, with just two that aren't, one of which there's a break in the lease at the end of this year, so we can exit that. But now they're tracking at above AUV of GBP 18,000 a week. They are now profitable. It's been a real testament to the food and the effort that's put in to turn those stores around and bring them closer to the rest of the estate.

When we launched these stores, I would say that our food was at a bit of a low. Nothing has changed in those stores operationally that much, certainly not with ambiance. They look the same as when we launched them. It was the first time that we saw sales decrease once we launched them. Usually, we see a maturity curve and a growth that happens because people are being educated about the product and the brand. This is the first time that happened. The real driver here was the product quality, and obviously, that has worked really well for us. We are delighted that the long tail has gone to an incredibly short tail, and we have largely knocked this one on the head. Here is the brand refresh. We have a video that we will, at some point, probably put on social media just showing all the different things that we are doing with a highlight around Leeds. This is our Leeds site. You will see the new branding up top right of the signage, along with a great treatment of the kiosk. We have a second assembly line here. We have video screens. We have got a fourth video screen, which we are going to be rolling out across the estate. It looks great. It is very effective. We have dedicated customer journeys for digital and in-person ordering. This is going to be the way forward and something that we are very keen to roll out across the estate in due course, as capital allows. In summary, it has been a challenging couple of years, but we have got the product in good place. We are shoring up the challenges of France. We are the largest Mexican chain in Europe, and there is still huge, huge white space across Europe that we can expand into. I have come back in. We brought in a great team, a great board. We have got Richard co-piloting, and we are excited to how that is all going to move forward. We have got a great capital light growth model. For franchisees, they love the idea that they have food that comes in that is absolutely beyond tasty, that they can regenerate and serve to their customers without a huge amount of hassle, and without a huge amount of cooking, which actually brings down their CapEx and improves the returns. So a robust franchise model that allows us to roll out not just in the U.K. but across Europe. We have got financial momentum. The like for likes are great. We are exceeding the CGA tracker. We are looking to really focus on the conversion to the bottom line with this new reality of a higher sales level. I think importantly, we are putting in place a clear strategic plan. There was not really a direct plan for all the different initiatives we would be doing across the different departments. We now have that in place. The team has bought into it. We have 250 initiatives that we are going to be rolling out over the next couple of years, and just strong momentum at the moment. We are delighted with how everything is going.

That is great, guys. If I may just jump back in there and thank you very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions using the Q&A tab situated in the top right corner of your screen. While the company take a few moments to review those questions submitted today, I would like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via your invest dashboard. Brandon, Richard, if I may now hand back to you to take us through the Q&A session. Kindly ask you to read out the questions where appropriate to do so, and I will pick up from you both at the end. Thank you.

I will take the first one, which is about France. Could you please speak more about the group's progress in France and what the group is learning about the French market from its operations over there. I think the biggest learning is when I started Tortilla in 2007, Mexican food was not very well regarded. If you remember back to the days of Chiquito and places like that, it was kind of a bit of sloppy food and a real focus on tequila. That is where the market is in France as well. Going back to the education and just kind of starting afresh and building back up and building that product knowledge and awareness and brand awareness has been the real challenge. But we are on top of it now and using the right playbook. I think also there is obviously rigidity in the labor market as I think everybody kind of knows about, and so getting our costs under control while educating the market is really the challenge. But the ability to expand across France is unquestionable. There is a competitor over there called Nacho's, who was actually founded by a former Tortilla employee. He has grown to 30 sites. We think we have an advantage over them on product and brand, and we will continue to expand in France, though probably with more of a franchise type approach.

Great. I will take the next question. So it is how do you determine whether to invest further in underperforming stores versus close it, and what return thresholds are you applying. So actually, when I joined a year ago, you saw that graph, we had quite a list of sites that we thought we might close and thinking actually, we need to exit those, and we did a couple of those. Gunwharf and Canterbury. But actually the shift with delivery growing and with in-store growing has meant a number of those sites we talked about before have actually turned into positive territory. So actually, there is a balance to be had to say, do I get more value from those underperforming sites, making them profitable versus investing more in the profitable sites. If we look at something like Leeds, so that is a brand new store. Our CapEx on that was just under half a million. We look typically for a return on capital employed of about 35% on new sites. Leeds is performing exceptionally well. It is at that early point of its maturity curve. I would say at the moment, we take a balanced approach between turning around those underperforming stores, and delivery has certainly helped sweat the assets a bit harder actually, versus investing in new stores. I guess our new, as Brandon alluded to, our model really is looking more at a sort of franchising rollout rather than a significant amount of cash going into equity stores.

Given the success of the franchise model. Do you mind if we just scroll back a bit? How should we think about the impact of the shift towards delivery on margins given the higher aggregator commissions? That is something that we have been debating on the board for as long as I can remember. I think the way to think about it is we have probably seen about a 1% impact on margin from the increased commission levels by going multi-aggregator as opposed to exclusivity. At the same time, we have seen a 50% increase in our sales on delivery, which makes up just over a third of sales. So it is a pretty easy trade-off when it comes to actual EBITDA. The sales increase way outweighs the increased costs on margin. Also we are passing along a lot of that increased cost to the consumer who is willing to pay a little bit more, actually quite a bit more on delivery versus in store. So it was a bit of an easy decision and I think one of the challenges that we had in the past, because we were multi-aggregator and then went off of Deliveroo, is that we saw a lessening of awareness in store. Our in store softened when we moved away from multi-aggregator and actually going back onto multi-aggregator has increased our in store. So not only does it not cannibalize, it is actually beneficial. So for all these reasons, we think that the multi-aggregator approach is the right one.

I will take the next one. How constrained are you by your debt facility? I said earlier that our net debt at the 0.5 Year was GBP 12.4 million against a total facility of GBP 14.4, U.K. and in France as well. We would always love a lot more cash to accelerate our value creation plan a bit faster. Santander have been extremely supportive. We do have some headroom on our debt facility, and our forecasts show that we stay within that facility and that everything is good on a look forward covenant basis. We are well aware that the last couple of years we have consumed a great deal of cash in the business. I think the fast actions that we've taken, particularly in France, will stem those cash losses very quickly and what we're seeing on the top line growth and the plans we are for delivering greater margin at a restaurant level will see us actually create a bit more breathing space, let's say, on that debt facility.

How many new opportunities are there still in the U.K.? That's a great question. One of the things that we initiated in about March was a white space report on the U.K. through a company called Hospitality Data Insights. I'm not trying to be evasive on it. They have come back with an initial report and are doing some fine tuning on that, and we will report on that opportunity in subsequent presentations. What I would say is that there's a slight challenge in that there's certain stores that there's a stratification here. If there's a store doing GBP 25,000 a week, we will probably end up doing 35% return on capital. But at GBP 20,000 a week, we're still doing 25% return on capital, and that return on capital is sufficient for franchisees to be interested. What we may be showing is kind of like a tier one versus a tier two. What I would say is I think there are a couple hundred Tortillas that could be possible in the U.K., depending on your return on capital profile or threshold. What are the key learnings so far from the implementation of the new value creation plan? I'll take a step back on that. One of the challenges over the last couple of years is when you're missing your profit targets, one of the things that obviously happens is you need to trim costs. You trim personnel, you trim OpEx, you trim CapEx in order to hit the numbers and hit your net targets and things like that. That's been a real challenge. We really needed to have bitten the bullet and just said, "We're going to reset. We can't be beholden to profit targets, and we need to think about the long-term viability of the business and building sustainable growth." Sustainable growth is almost a cliché, but we have played out that that is really necessary. You can build 100 sites, but you got to shore up the foundations. As we're putting in place the value creation plan and being unrelenting about it and making sure that we have initiatives across all the different departments, what we've seen is success. The limited time offers that we've put in place, the food improvements that we've put in place are all bearing fruit. I hope everybody will go and try some of the latest products we have. We just did a ghost chili chicken. We previously had a Hibiscus Lemonade, which became the third most popular drink on the menu after Coke and water. We've done the Cali Caesar Wrap, which was a huge success during the summer, especially in the hot weather. So it's working. A lot of the stuff, though, that we're doing now is very foundational, putting in place the benchmarks. I mentioned the Hospitality Data Insights report. We didn't have a white space report on opportunities. So getting all that stuff in place, getting the Oracle project in place will allow us to really see the fruition in the future as we layer on stuff that actually has an impact on sales and margin.

That's great. Well, look, guys, that's all the questions we have for today. So thank you, Brandon and Richard, for addressing them on the call. But Brandon, before I redirect investors to provide you with their feedback, which I know is particularly important to yourself and the company, could I please just ask you for a few closing comments?

Yes, thank you very much. I think the key thing that we'd like everybody to come away with is there have been some challenges in the past, and we are running to those fires, addressing them, tackling them head-on, and resolving them. There are loose ends out there that need to be addressed, and we're tidying all that stuff up. We have taken decisive action on France and actually decisive action on the U.K. as well. So there's a lot of shoring up that's taking place for stuff that's kind of been building up over the years. At the same time, we're looking at the current and the present, and we're making sure that we're continuing to reap the rewards of this move to multi-aggregator, and the product improvements and everything like that, so keeping things moving along while at the same time putting in place a robust plan for the future that is modelable and that we can present to everybody. We haven't gone into a lot of the stuff around where we think this can get to over time with our and kind of the bridge chart that actually shows how we're going to get to 20% and how we're going to get to 1.5 million. We have that in our own mind, and as we see that start to materialize, we will start to share that along with the opportunity for white space in the U.K. and the white space opportunity in Europe, which we are also putting together. So we are working on the past, working on the present, working on the future. We have been very busy. We are delighted with the trajectory now.

Fantastic. Thank you guys once again for updating investors today. Could I please ask investors now to close this session, as you will now be automatically redirected to provide your feedback, which will help the company better understand your views and expectations. On behalf of the management team, we would like to thank you for attending today's presentation and good afternoon to you all.