Good morning and welcome to the Tortilla Mexican Grill PLC Four-Year Results Investor Presentation. Throughout the recorded presentation, investors will be in listen-only mode. Questions are encouraged, and they can be submitted at any time via the Q&A tab situated in the right corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all the questions submitted today and will publish responses when it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to CEO Andy Naylor. Good morning to you, sir.
Good morning. Thank you for the introduction, and welcome everyone to our latest update with our 2024 Four-Year Presentation. We'll start with some intros. I'm Andy. I'm the CEO of Tortilla. Been with the business for about eight years now. I love the restaurant industry. I did not start life as a restaurant, so I was an accountant by background, but the food industry is what gets me excited now. I'm delighted to have Maria on board as well since the beginning of last year.
Welcome everyone. Yes, as Andy said, I'm Maria, the CFO since February last year when Andy stepped into the CEO role.
Right. We'll do a quick summary, and then we'll walk through a strategic review and an operational update. Then Maria will take us through some of the financials, and we'll leave plenty of time for some Q&A at the end as well. In terms of the key headlines, there are sort of six areas here we wanted to highlight. The first is that the U.K. business, well, first and foremost, there have been 12 months of significant progress across a number of the key pillars that we identified before. It's fair to say that we've had a busy 12 months transforming a lot of elements of the business, which has been fantastic. It's good to see some of the fruits of that labor coming through. The U.K. business, starting with that, started the, well, Q1 last year was quite tough for us.
A lot of the initiatives we implemented kicked in from sort of April onwards when I took over. Over the last 12 months, it has moved on significantly. If you look, compare Q4 of last year with Q1, our like-for-like sales growth was 8% improvement compared to the way that the CGA Peach Restaurant Benchmark moved. We are really delighted by that. We will talk a lot more about our like-for-likes and the progress we have made on that in the presentation. We commenced an exciting strategic rollout in Europe with our acquisition of business in France. We have 13 quality locations there and some franchisees. We will tell you a bit about that. We grew our franchise estate last year, mostly with SSP. We signed a new agreement with SSP to get us to 18 sites over five years.
Really excited to see all of those relationships going from strength to strength. Becoming quite a significant part of our business now. We've worked very hard on team and culture. We'd love to tell you a bit more about that in the presentation. You know, the key headline is we've got our staff turnover down by 35 percentage points, which is quite incredible, actually. You can see there's a little picture of the first, the inaugural Burrito Masters Rolling Competition that we did last year. We had a significant change in our recipes and our foods, our products over the period in terms of limited-time offers and creating some buzz around the brand. We'll tell you about that. Lastly, we did a lot on the tech kiosks loyalty. We've seen some good numbers with those.
We'll talk to you about that in a bit more detail too. Moving on, just as a reminder, when, in April last year, when I took over as CEO, we identified five strategic pillars that we wanted to really focus on as a business. One was to improve our U.K. profitability. The second one was investing in our brand, both brand and food, and to drive our top-line growth. We felt there was big potential there. We wanted to invest in our teams and our technology. We had a mission to double down on franchising. We also wanted to develop our brand internationally, in Europe. These are the things that we're gonna focus on in the coming slides. Starting with the U.K. profitability, we are really delighted with the progress on this.
I wanted to create a culture of obsession about volumes in the business, getting more people through the door, eating burritos and our, and tacos in case of beers. You can see the red line here is the Tortilla in-store, sorry, total like-for-like. The gray line is the industry like-for-like. You can see when we started the Vital Five strategy, we were at about -6%. It grew quickly during the period of all of the things that we've launched. You can see from September onwards, we've consistently outperformed the industry tracker during that time. Actually, that gap is just widening bar April, which Maria will talk to in a little bit more detail later because there's a nuance around pricing there. We are really, really pleased with this.
I think to have such a big gap against the restaurant tracker is a really good indicator that we're on the right journey here as a brand in the U.K. Links to profitability, we've got some historicals here in terms of our profitability percentages. We've moved it forward year- on- year from 2023 to 2024, which is great. Actually, as Maria will tell you a bit more about later on, a lot of these improvements in the top line and some of our cost savings, they only really impact the second half of the year. What we will find, you know, obviously is the year went on, it got better, as you saw from the last graph. A lot of these will come to a full year fruition in 2025, and we should see our profitability grow, grow healthily this year.
In terms of the things that have driven our profitability, the main fact is that we have obviously transformed the top line through that sales growth. As everyone knows in the restaurant industry, that top line sort of sales growth flows through very quickly down to the bottom line. That was the main mission really of ours. Also, we've looked, given that the general climate within the restaurant industry is profitability is decreasing because of all the labor inflation and other types of inflation. We also put in various self-help measures like automation. We are now doing more automation of our cooking processes at the Central Kitchen, which actually also we've coincided that with improving the quality of what we do as well, which I'll come onto in a minute. It's also saved us manual labor hours.
We've got better buying power than we've ever got before because we're growing, particularly as well with our franchise partnerships growing and that supply chain coming through our business. Energy saving initiatives. We've got the solar panels in at our Central Kitchen, which is fantastic, particularly with the weather we've had over the last couple of months. The AI smart sockets in the store as well have been saving us energy too. Finally, the hedging strategy we've been utilizing to buy ahead and lock in our purchasing and protect ourselves from volatility. Yeah, good progress on U.K. profitability. Moving on to the second pillar, the investment in the brand to drive growth. This slide covers really the food side of that, which has probably been the most substantial element that we've done on brand.
Starting with capability, we brought in a new Food Director in June last year, a guy called James who's had a fantastic impact on the business. We've upskilled his team as well with a new Executive Chef and some wider changes within the team. We've got a really strong team driving the food now. We've invested in new servery equipment as well as part of that. Skipping onto the all-day quesadilla, one of the things that we really wanted to do, we felt our quesadilla was one of our best products, but before we only served it after 2:00 P.M. because it was too slow to serve at lunch and would slow the line down. With putting in some new equipment in the stores, we can cook these very quickly now and with a much better quality to them as well.
We launched the Ditch the Sandwich campaign with a lower price point, GBP 6.95, get a quesadilla. The improvement in the sales mix of that has doubled. It's been a really popular product. You might have a concern that that's diluting our ATV, but it isn't because what we're doing with that is we're really promoting it as a meal deal. Actually, people are adding on drinks and chips as a result of the lower price point to still protect our ATV. It's a fantastic volume driver for us. We've overhauled our food offer. I mean, we have reviewed forensically every single container of food on our line, and we've made improvements to it, whether it's the recipe, the way that we cook it, or actually even the produce that we're purchasing to put into it. We've changed a lot of stuff.
Those that eat our food regularly are always telling me that they've seen a big change. You know, I think it says a lot if the founder says it's the best that our food has ever been, which I think we're all feeling within the organization. We're in a really strong position from a product's point of view. Given the competitive landscape in the U.K., having the top product at the best price you can afford to do it is absolutely vital to driving the top line. We invested in our Central Kitchen as well, as I mentioned earlier, with various bits of equipment to not just improve the speed at which we can produce things, but also the quality to enhance that as well. That's been critical to underpinning the changes.
We've also started on our journey of launching limited-time offers, which have been fantastic for the brand. It's a bit of a mixture for us of working with big brands like Beyond Meat, you know, global brands, to also working with more artists and producers. We've done various collaborations, for example, with Tubby Tom's, Pork Belly, which was in this year, really great product. You know, partnering with people who've got quite big Instagram followers and just whipping up a bit of food news and excitement in the brand, not only for the customers, but also for our employees. You know, you can see the energy it creates and the excitement, and people are upset when they see some of them come off the menu. That's the whole idea clearly behind creating a buzz around your brand and being able to rotate things like that.
Moving then on to brand, we have pulled the brand lever a bit, but if I'm honest, this is a lever there's a lot more to pull on. I'm delighted that we recruited a new Marketing Director at the beginning of the year who joined us in January. We've got some really exciting bold plans coming on this run. Starting the first mission that we've been working on over the last 12 months, there was evolving our brand. Our brand, that is 20 years old. I think when we were looking at the Fresh Burritos sites and how we convert them to Tortilla, it was a moment of realization for us that there was an opportunity to make our own brand bolder, fresher, and also having a more youthful energy around it and a more simple design structure.
So there's a consistent identity now as well. We've implemented across our digital and physical touch points. We've been working hard on our social presence as well. We've seen some really good growth on our channels over the last six months. We've been driving awareness. There's a lot more to do on this, but we have done quite a few big activities. We did the National Burrito Day. As you can see from a screenshot there, we've got our app, our loyalty app, so number two behind ChatGPT for a day, which is fantastic. We required people to sign up to our loyalty scheme in order to redeem their free burrito. 18,000 given away. We signed up 62,000 new loyalty members. That gives us obviously a lot of audience to kind of contact and bring back into our stores now.
We did a quesadilla stunt in December last year, which was good fun. Ditch the sandwich, ditch the boring sandwich, and replace it with a nice quesadilla. As I said, we've been doing a lot of culture-driven collaborations as well. Some brands listed on this slide that, yeah, it's been great to partner with and have some fun with. That was it on the brand side of things. As I say, there's a lot more to come on that front this year. Onto team, I'm a big believer that although we are a restaurant and a food business, we're also a people business. We've been working really hard to develop Tortilla as an employer of choice and become a sort of place that people talk about as being a place that's really good to work.
I mean, the most impressive statistic on that front so far I mentioned on the main side is we had a 35% improvement in our team turnover, which is absolutely fantastic. That's versus 2023. We've been really working hard on this. We now meet with our store managers face-to-face quarterly. We launched what we call the Habanero Highway, which is an L&D framework. I was actually at some graduate presentations from the leadership course that we did yesterday. Various people that have been in the business a long time have remarked they feel it's the best thing that we've ever done as a company, which is high praise indeed. I think it really goes to show what kind of an impact you can have on your people when you start building this culture. We did our first Burrito Masters, which I mentioned earlier.
Celebrating the challenge of rolling a burrito, who's the best at it. Now we're an international business. We can get the best from the Middle East, the best from France, the best from the U.K., the best from our franchisees, and have a lot of fun with it and celebrate the success of that. Yeah, there's been a big improvement in our operational statistics as well. You know, hats off to the team. They've worked really hard on our inaccurate order rate, the mystery diners, and our Google rating. We've seen some really strong results operationally as well. It goes to show that that buy-in is building within the organization. There's still a lot more to do on that front. There's another 12 months, at least, of big transformation, but we're gonna get there and we're gonna keep growing it.
On the tech, oh, this is another slide here on team. There are some statistics here around feedback from our guests. The scores are pretty good, but they could be better. I am going to be working with our Chief Operating Officer to see what we can do to drive these things forward. I think particularly in this space of value for money and portioning, making sure that the portioning is consistent. We want people to walk away with a consistently sized product. We have just got a lot of ideas about how we can move forward on that. We want to make sure people are satisfied with their visit. We know from our loyalty that they are. It is just about driving that further now. We have implemented some more systems to track this stuff going forward as well.
If we move on to technology, other than food, this is probably the other lever that we have pulled most heavily last year to drive that sales growth. We have got a fantastic new loyalty app, which we launched in late summer last year. A lot more functional than what we were using before. We call it the Burrito Society. It says 196,000 users. We are over 200,000 now, which is fantastic. We have seen a huge improvement in our average weekly sales on that application. What we are really seeing with Tortilla is a very sticky, loyal customer. You know, with our type of food offer and the variety you can get from it, you will get people coming multiple times a week. The scheme is very generous.
We wanted to not fall down the trap that many restaurant businesses have done and discount, but instead provide value to our customers through rewarding loyalty. You get a sixth burrito after you've bought five. You get the sixth one free. It's pretty generous. I think we're really seeing sort of visitation frequency go up heavily because of that. We've also rolled out self-ordering kiosks across a range of stores. We've seen some really strong results from that. It enhances the customer experience in a lot of locations where people feel that the journey that we have at the moment is perhaps a little bit intimidating. It's not for everyone though. We've been working hard on how do we put them in without it feeling like QSR.
We have been evolving as we go around where we position them in the store so they are not in your face as soon as you walk through the front door. We learned as we went on that. By learning as we went, we went quick and we got lots of these in. We have seen some really strong payback and results from them so far. Not just in Average Transaction Value, which is the commonly reported upside that people talk about, but also volume, which goes to show that people enjoy the experience in some of these locations and it is driving footfall. The robotics partnership we have announced, fantastic business, Kaikaku. I believe that our proposition is inherently suited to further automation opportunities.
There's less precision needed in producing our food on the servery compared to burgers, sushi, and other foods requiring more finesse in the preparation. Our food is fun. I think we can automate further. I think we can redeploy people from manual roles within the stores to exciting front-of-house roles, providing much more than a functional guest experience than we're able to do at the moment. Really enhancing that kind of customer journey, explaining the menu. I'd really love for us to become a much more heavy front-of-house focused organization. BI and data warehouse, probably a bit less exciting, but exciting to data nerds like us because ultimately it means you can make decisions more quickly and you can make a commercial impact more rapidly by being able to make quick decisions off of data. That's been a big behind-the-scenes project of ours as well.
Then we talked about doubling down on our franchise and we definitely have. We have delivered on this pillar. Just as a reminder for those that are new to the business, we've got a great operating model for franchising. I mean, it is a very strong model, simple kitchen format. We provide a lot of the harder to produce recipes and food from our Central Kitchen, meaning the onsite preparation is very simple for our franchisees. Great for the franchisee, great for us because it means that we can protect the consistency of our offer much better than some of our competitors are able to do, which is great. In terms of protecting your brand, it means that our franchisees can build sites without extraction, and they can take smaller units as well.
As you can see from the graph in the bottom left corner, our franchising sales across the U.K. and the Middle East are over GBP 16 million now. You can see how that evolved over the last five years. It's quite incredible. It goes to show with the commitment that SSP have made to the business and the sites we're opening elsewhere, there's excitement about our brand on that front. SSP have opened a range of stores recently, as a few of them listed here. I mean, Stansted Airport recently in December last year, fantastic site. This year with SSP, we opened Victoria, as listed on the slide, but also Liverpool Street Station. We're across most of the major train stations in London now. Fantastic from a brand perspective. We also opened a couple of sites in the Middle East so far this year.
We'll be opening another site in the summer in Abu Dhabi. Fantastic region. That business is incredibly well run by the franchisee we've got there. You can see 24% like-for-like sales growth. I'd love that number as well. Our sales growth is strong, but hats off to those guys. They're absolutely killing it over there and doing a great job. Compass as well. They're strong. We're in the higher education spaces and we're looking at other sectors as well with them, looking to expand that relationship. Lastly, I guess with the European growth, we'll come on to that. We've got a range of franchisees now in France. We've got some stepping stones to build on the franchising in Europe now as well.
Yeah, developing the brand internationally, we obviously made some progress on this by buying our largest European competitor last year in the summer. We bought 13 owned stores and 14 franchise sites. Fantastic locations. This was a property play for us. Let's have no doubts. This is not a brand that we were looking to retain in our own corporate stores. We want to turn them to Tortilla. We've got our food in the restaurants at the moment. We've got our central kitchen built in Lille, and the Central Kitchen is enormous. It's three times the size of our U.K. facility. Our U.K. facility is supplying around 100 sites. As you can imagine, there's huge rollout potential now that we've got as a springboard in Lille, and it's important that we're able to provide food to the franchisees for the reasons I talked about previously.
We've got a great team in place led by a French MD called Gill. He's got great experience from KFC. Yeah, we're on the journey to getting the stores converted. We'll be converting the first sites in the summer. We're all hugely excited about that. We'll be working hard on that for the rest of the year. Really exciting. It gives us a solid platform for our European growth, which is going to be largely a franchising experience for us, as we talked about previously. Great progress on this pillar. There's a quick reconciliation here of our number of sites. You can see that we're up to 120 internationally by the end of May of this year.
Diverse portfolio, as we talked about previously, you can see a biograph at the bottom with the different types of sites that we've got. Yeah, great to see us expanding across both franchising, but also through the acquisition we did last year and, you know, that property play that we commenced on that front as well. Lastly, before I hand over to Maria, I just wanted to give you a quick view of our rebrand. As I mentioned on another side, when we were looking to convert the Fresh Burritos stores to Tortilla, we wanted that conversion to really feel like, wow, noticeably different to existing design. It made us go through a journey of looking at our own design in the U.K. and seeing if there was an opportunity to modernize it, create a more contemporary design.
I think that's what we've delivered here. These are some renders from some sites that we're gonna be reopening. This is a site in Leeds that we'll be opening next year. Looks fantastic. Bright signage on the outside. Looks fantastic with the kiosks well positioned, you know, and the interior nice and clean looking. I think it's a much more contemporary design than our current look. This is something that we're really excited to be deploying in the U.K. where we can and also rolling out our sites in France. We've simplified the main logo from Tortilla, Real California and Burritos and Tacos, just Burritos and Tacos. Simplify it. We want to start, this feels like a global brand to us now, not just a U.K. brand. I think having an iconic logo is a key part of that.
Thank you. Thank you, Andy.
I'm gonna talk you through some of the financials now, starting with the highlights of next year, from last year. I think the key thing of this is they really prove what Andy's been talking about, the significant progress we have made in the U.K., as well as obviously the investments we're doing to grow in Europe. First of all, we saw the slide earlier on with our improvement in our like-for-like sales in the U.K. compared with the market. Just to highlight again, compared where we were in, in quarter one last year, when we were about sort of minus 5 percentage points, decline, and then finishing quarter four last year in about, in over 4% increase means we moved 9 percentage points between where we started to where we ended the year, which is quite a significant move.
On our top line turnover, we have grown to GBP 68 million, up GBP 3.5 million year- on- year. I'll talk to you a bit more in the detail of the breakdown of that, but the majority of that's coming from the acquisition of our Fresh Burritos. On an adjusted group EBITDA line, we were GBP 4.5 million, which is slightly less than last year at GBP 4.6 million, so down 2 percentage points. What's important there is really to look at the split between the U.K. and France. If you look at the U.K. operations, we were up from GBP 4.6 million to GBP 5.2 million, so 13 percentage points growth. As Andy hinted on earlier, majority of that was driven through the second part of the year. Hence why we will see full year impact of that really coming through in 2025.
As expected, when we bought a sort of distressed business, which was more of a property player, as Andy said, we expected early day losses, and that's what we're seeing in the minus 0.7 EBITDA contribution from France. On a cash perspective, we generated GBP 4.2 million of cash from operations, up 10% year- on- year. That has been really reinvested within the business, which I will talk to you a bit more about later on. We've already gone through the sites, but just to highlight that again, at the end of the year, we had 117 stores, up 28 year- on- year, and we're now at 120 as we stand today.
Our net leverage ratio for last year was 1.3, up from 0.7 the previous year, which is really driven by that we increased our debt as, to be able to grow and expand into Europe. If we then go a bit more into the detail, starting off with the income statement, you can see that the revenue growth being GBP 2.3 million, up 3.5%. I said the majority of that comes from the acquisition of Fresh Burritos, but we also opened one new site in Arndale, Manchester in the U.K. in the year, and we have the full year impact of 2023 openings and also seen strong, as Andy said, franchise growth in the U.K. and the Middle East.
This is then offset by our delivery sales year- on- year, because back in February, for those of you listening before might have heard this, that we changed our delivery strategy to go on dual platforms rather than trading on three platforms. That meant a drop in sales of 10.5% like-for-like, but that has increased our profitability, which you will see on a later slide. From a gross profit margin, we, I, we are temporarily down 70 basis points. I say temporarily for the reason that this is really driven by the fact that we took over the French business. They had a frozen supply chain and did not purchase very well from the suppliers. We had a short-term sort of impact on our gross margin dip since we implemented the new central kitchen in Lille in France in Q1 this year.
We have now seen margins going up again, and we're currently trading around 78.5%. The adjusted EBITDA I've already mentioned to you that we were slightly down as a total, but a strong progression on the U.K. side whilst we, France was down, driven by, the early sort of losses that we expected there. Looking at the bottom line, the loss before tax, it looks quite alarming, maybe at going up three times to GBP 3.3 million, but it's really driven by two items. The first one is an impairment of GBP 1.4 million in a small number of stores in the U.K. Yes, as a reminder, that has no cash impact at all. It's a sort of an accountancy, sort of booking. The second one is a one-off exceptional item of GBP 1.6 million, of which the majority, GBP 1.3 million, is driven by the acquisition costs.
This drives down a little bit more into our like-for-likes in the U.K., following on from the slide that Andy showed at the very start on that graph. I just want to talk to you a bit and show like really the split here between in-store and delivery as well. You can see that on the in-store, they were really transformed from minus 4.6% in Q1 to 4.8% in Q4, so up, up with 9 percentage points, as I said earlier on. The nice thing with that is that we can then see that tracking through into this year. We dipped down a bit in Q1, and it was really driven by in April. We, sorry, you know, I'm saying it wrong now.
We didn't, we started off a little bit slowly, but we then have been really strong in Q2, despite the fact that we dipped down a little bit in April because we chose to price slightly later rather than going first of April with a price increase. We actually priced end of April to be able to watch the market a bit. Hence why you saw that bit of dipping like-for-likes in April on Andy's slide. Since then, it's come up, stronger, and we're now around sort of plus 9 percentage points for, after we had implemented that sort of price. When you're looking at our total, total there, I think it's really interesting to look, compare that with the market. Where we were in a decline quarter one last year of over 2 percentage points and now in an increase of 6.
We've gone up nearly nine basis points. The market was in a 2% increase last year in Q1, and quarter two, quarter to date, they are now in a decline of 2%. That has gone backwards 4%. Compared with the market, we really outperformed that with 13 basis points over that period of time. Yes, to highlight, as I said on the delivery, because we changed the delivery strategy, you can see full year 2024 that we're down 10.5 percentage points in like-for-like. When we came into quarter two this year, which is the first time we're now starting to overlap this at relevant timing last year, where we also traded on two platforms rather than three, the actual delivery channel is in quite a strong growth of nearly 10 percentage points.
This is an interesting slide because, as you might remember, we opened quite a lot of stores, 18 in fact, back in 2022, 2023, and a majority of those stores were opened in smaller tertiary towns, not in a major sort of city. Because of that, we have expected them to take a bit longer to mature. What's interesting with this is that obviously these sites have benefited from everything else the other sites in our portfolio have done, like the investment in food and tech and marketing and so on. What we can see here on the gray line, which is the new store openings from 2022, 2023 versus the total Tortilla estate, which is the red line, is that the new store openings are really outperforming our total estate, specifically over the last sort of three months.
It's 11 percentage points difference between the two lines, which really demonstrates that those stores are still maturing, which is interesting because obviously a year or so ago, there was really a drag onto our P&L, you know, loss making or maybe as marginal. They're all now starting to reach that sort of point that they're starting to become profitable or at least break even. As you can see here, they're still maturing. That just, you know, benefits us as the year goes through and into the future as well. I told you already quite a lot through the revenue slide, but this is really just to demonstrate how much the revenue went up there from, we'd have that position increased with GBP 3 million. We opened new stores last year, which is an average of GBP 1.1 million net there, contribution to revenue.
You can see from that little new store opening graph that we have a closure of two stores in there. Those two closures are coming from one, which, in Peckham, which was our last delivery kitchen out of the ones we opened in COVID to close down. We're not really having sort of specific delivery kitchens anymore. We're using our normal stores for that. The second one was our store in Nottingham, where we had two stores fairly close to each other. We realized that we only really need one in that town. Since we closed that one store, the majority of the sales actually transferred over to the second one. Franchise income is growing, 0.2% up. You can then see that the revised delivery strategy made our revenue fall by 2.8%.
Small impact of our in-store, which was in decline as a total for the full year, driven by the first four months of the year. That was really negative before we started to turn the business around. You have an accounting adjustment of GBP 0.8 million, which is just the way we book the sale we do to our franchise partners of our food from our central production kitchen. There is no impact on our actual profitability. It is just where in the P&L we book that, giving us a total of GBP 68 million. Looking at our EBITDA bridge, we were at GBP 4.6 million last year. You can see a lot of green ones here coming from the U.K. business. Cost savings of GBP 0.7 million, which comes from the points that Andy highlighted earlier. The automation in stores of bringing our, say, chicken dicing to the central production kitchen.
The fact that we, the fact that we've saved on energy, and that we have now stronger purchasing power, all of that contributing to this GBP 0.7 million. Franchise income goes straight to the P&L of GBP 0.2 million. The change in delivery strategy whilst bringing down our revenue actually increased our profitability with GBP 0.3 million. We can then see that we priced last year, we priced 6% in April, giving us an increase here in our EBITDA of GBP 0.8 million. This year, we've gone a bit softer when we delayed it to the end of April to watch the market. We also choose to price only 4.5%, probably slightly lower than when the market, than our general sort of inflation in labor and that.
We've also chosen to go slightly softer on the pricing in central London, where we already have a premium pricing and also the fact that the competition is really intense in central London compared with in some of the towns outside of London. We've done more of a split pricing strategy there. The pricing and the cost savings combined, they're more than offsets the labor inflation we've seen of GBP 0.8. That means we've been able to also invest in our head office and in particular marketing of GBP 0.6 to start driving our brand awareness and repeat purchasing powers and that. Lastly, you can see the Fresh Burritos acquisition and the downside on the EBITDA there on GBP 0.7, giving us GBP 4.5 in total for the year.
As Andy highlighted earlier, I just want to point out in the table at the top, you can see that the split for our EBITDA in 2024 is more heavily weighted to the second half of the year compared with the normal seasonality that we see, which is always more heavily half two because that's just the seasonality of, you know, having a really strong quarter four and that's what we normally see. Because of the cost savings and other initiatives driving the sales and so really started coming through from the second half of the year, that's what's driving that. That's why we will see it's fully materializing in 2025. Talking to you about the cash flow. What you can see here is that we generated, as I said earlier, GBP 4.2 million cash from operation.
We've reinvested this in the business, both in the U.K. business to invest in our product technology, our, both the kiosks and the app, as well as our central production kitchen to really drive our like-for-like sales. On top of that, obviously we have maintenance investments that will improve the sort of quality of the estate as we would always have. Some new sites, CapEx, the majority of that has gone to Arndale, which I said we opened in Manchester last year. We also have investments in France, both for the central production kitchen and starting to invest in equipment into the stores of GBP 1.6 million, as well as the actual acquisition costs that's come through here of GBP 1.4 million, impacting the cash flow, meaning that at a free cash flow level, we were actually adverse GBP 2.7 million.
Therefore, we have drawn down GBP 4.2 million more from our credit facility with Santander. All of that is not fully utilized at the end of the year, meaning that as we close the cash position at GBP 2.8 million, and obviously further CapEx investments will go on as we start converting the stores in 2025. This means at a total net debt level, we were GBP 5.7 million at year end, 1.1-1.3 times. Just to remind everyone, we have a total facility with Santander, GBP 10 million. We've now drawn down GBP 7.2 million of that. That facility is agreed until September 2026, actually being less than 18 months.
You would have, we would have obviously started our discussions with banks, and we are pleased to say we're in a really advanced discussion with banks to renew our facility, and we'll release some news to the market as soon as we have agreed that. Just looking at our trading, outlook for the rest of the year, as I said, U.K. is trading well going into quarter one, quarter two this year, and our 6% like-for-like. We can see the cost savings coming through that we sort of for the initiatives we drove last year, and we keep driving obviously food news and marketing and technology investments, as Andy's already talked about. The U.K. outlook is very much in line with the management expectations. For France, we're now ready to start conversion, converting the stores with the first conversions to take place, towards the summer.
Our franchise partners have already opened two new stores through SSP and two through EFA so far this year, and we're expecting another two to four to open in 2025, a bit relating to the timing of the last two, whether they will fall into this year or into 2026. I'm also pleased to say that the hedging strategies we have and the relationships with our suppliers means that we have already agreed very early on, back in January, the prices for all our proteins and for, you know, our energy prices are fixed. We have no really volatilities throughout this year or risk to other input costs. They will be stable for the year, which is quite nice with everything going on in the world economy at the moment.
I think just generally, I'd say that both Andy and myself and the board, we are really so excited about both this year and the future and the growth opportunities we have both in the U.K. and abroad. I think over to Andy to just summarize.
Yeah. Just to wrap things up, I guess, before we move on to the Q&A, yeah, we've made really good progress. You know, there's still a lot more to do, undoubtedly. If you look at what's happened over the last 12 months, there's some big moves forward on some of these key pillars. The U.K. profitability we've talked about quite a lot today has moved forward last year and will move forward again this year.
We're feeling in a really good place about how we are recovering here and getting more people through the door, eating our food through all the different things that we've done around our food and our tech. Feeling very strong on that front. We're investing in our brand, so there's more to do on food. There's still tweaking that we're doing on our recipes. In fact, there always will be. I think it's something that you have to be continuously optimizing. We will also now, with our marketing team, be working very hard on our brand and the new look and feel, how we get that into stores, how we bring that to market. If you look at some of the real success stories in the U.K. in recent years, it's very often been heavily impacted by marketing.
Really excited by a huge lever that we can pull on this, that we've only just begun to do so far. Continuing on the team and tech, there's lots more work still on both of those fronts. We made good progress, but we'll be making more progress this year. We're doubling down on our franchising again, as Maria just mentioned. We've got a healthy pipeline of sites. With the franchising and the brand, the last pillar, developing the brand internationally, this is how we envisage Tortilla expanding across Europe. There is a huge opportunity to consolidate and really own this cuisine in Europe. We believe that if you look at other markets, not just the U.S. next to Mexico, but you look at Australia and the success there with burritos, Europe is clearly underserved with this type of food.
I think we all feel that it's very much on trend with the way that people are going around eating clean food without sort of deep frying, you know, clean protein, and being able to create variety and health through that food as well. Yeah, it should be a great opportunity for us to expand across Europe over the coming years. That brings us on to the Q&A before we do a final wrap up. We'll just flip to some of the questions that have come in over the course of the presentation.
I think I'll take the first question, Andy. The first question is around the Chipotle team has obviously started to expand internationally and particularly has started to take some presence, sort of through Europe. What's sort of our view on that and what's on our radar?
Yeah, I mean, it's an interesting business, Chipotle. They've got a great product, and we know their team relatively well. They open in some good locations. They have been expanding a bit in recent months, but they've, you know, they've also closed a store. I think they're working out what their right type of site is for them. Yeah, it's great that there's more businesses selling burritos in the U.K. I think, to be honest, I really like the awareness of the cuisine type to increase. We've been the ones driving that over the last 10-15 years. We're very happy to see them expand. I think for us, scale is everything, and we've already got that. We've got significant scale in Europe, which obviously comes with huge advantages around buying power. We have a slightly different proposition to Chipotle.
Our food is slightly different. You know, we feel that that's why it's super important to be really obsessed about the best quality product and then being able to have a supply chain and process that enables you to beat people on price. I think if you've got product and price, generally you're going to be in a very good place on a competitive landscape.
Okay. The next question is, the file shows U.K. sales fell in 2024. How confident are you that you can return U.K. back to revenue growth in 2025, specifically given the lack of own store expansion plans in the region? And where would you put the ballpark guide on your 2025 revenue estimates?
What I was saying on that, one of the big reasons, as you would have seen from the slides of why we fell in 2024 was firstly, we had a really, like, really weak Q1 and April last year before we started turning the business around. Secondly, we changed the delivery strategy. We lost nearly GBP 3 million worth of sale because of delivery of trading on two rather than three platforms. Going into 2024, we started strongly. We have been in 6% like-for-like growth, both through sort of Q1 and into Q2. Year to date, being around that sort of ballpark of 6%. Within that, it is key to say that is only 4.5% pricing now. We are actually growing in volume terms as well, which is really key.
A big driver of that is the investments we're doing in rolling out kiosks. We rolled out 11, as we said before, last year. We already implemented 12 so far this year, and we're driving to get up to at least 20 for this year. That's really driving not just the ATV, but also the volume, which is crucial to us.
The next question here then is about, this year appears to be about continuing the focus on U.K. stores, franchising, and converting the French-owned stores. Looking out beyond 2025, are there any other countries in Europe that you would take a similar path to expand in, or is the focus in the medium term, the U.K. and France? Any color there would be appreciated. Yeah, I think that's exactly right.
If you like to just be exactly, otherwise I'll lose all the content just there. Yeah, the U.K. stores, there's lots more to do here to generate profitability. Just thinking about your comment on the U.K. stores, there's absolutely a priority to keep going on that. I think there's loads more room to grow our sales in our own stores in the U.K. and grow our existing franchise partnerships. I don't want to distract the team with too many missions because I think it's important just to knuckle down, you know, getting our U.K. cash generation back to a really solid place. We've made good progress on that. The French stores, you know, it's a big mission buying a fairly big business in France. The mindset is not necessarily chasing new opportunities now, but making what we've got work.
I think that's definitely the right strategy. Of course, we're starting conversations. We're showing franchisees our Central Kitchen in Lille. People are excited, you know, there is opportunity in other European countries. Most obviously, it would be countries near to France where we can get the food easily into those stores. There are burrito businesses in those Western European countries, and some of them are performing relatively well. It proves the use case for burritos and the appetite for it. We will be keeping an eye on that, and our focus will pivot towards that when the time is right.
Okay. The next one, can you talk us more about the departure of Quilvest Capital Partners and what their motives were for selling down that stake in Tortilla? I'll let you take that.
Yeah, I mean, Quilvest came into Tortilla, I think, in 2010. Obviously a private equity firm, they tend to hold investments for a long period of time, and they have no presence in the public market. For them, there was always a sort of view that they were, although very supportive, that they would ideally like to bring that fund to a close at some point and move on to other things. I think it's just a natural life cycle, as the business, you know, as that fund moves on to different things. We were really excited to bring in Auctor as a key shareholder. They've got some fantastic ideas on the board as well, some really good conversations around tech.
I think actually a bit of change is good because you bring new ideas to the table. Quilvest were fantastic. You know, we had a great relationship with them, but it is nice to get new ideas, new energy. We have had a really good time working with Usman and the team at Auctor so far.
I think, Andy, this one specifically says this is for you, one for Andy and anyone else who would wish to comment. Tortilla share price has been dead for the better part of the year now. As executive team, you can control operation, which appears to be taking a turn for the better. Congratulations. The market dynamics you have less control over, but if you could comment on your thoughts why Tortilla fails to affect optimism for the market, that would be welcomed.
Yeah, it's a great question. Yeah, I mean, I guess I'm a big believer in spending time energizing yourself about things that you can control. I guess we're very much focused on looking at things we can control, which is how do we get our brand to win? That is, how do we get obsessed about volume, more people eating burritos? That's kind of the management team's obsession here. I think the public markets are difficult, not just in the smaller market cap space like we are now, sadly, but also just wider. We've seen a lot of volatility this year. I can't say I'm an expert on public markets and the market dynamics, but I think the priority for me just remains growing this business and making Tortilla win this mission that we think that remains. I think there's opportunity for hundreds of stores across Europe.
That's kind of what we energize ourselves talking about. I think there's also a view probably that we just need to get this business, if you like, a bit more rubber on the road in a way, not just in the U.K., but in Europe. I guess that's very much what we're prioritizing. You know, how do we grow? How do we make a success of what we've got going so far? How do we grow our average weekly sales in our U.K. sites another 20%? What is the opportunity here? This is probably the thing for us. We just need to keep executing on what we're doing so far and perhaps spend another couple of years proving out some of these concepts a bit further.
Okay.
With our international expansion now, a favor on Tortilla's menu, can you speak on how you will expect FX volatility to impact the business going forward at short and medium term? Firstly, at the moment, obviously our France business is not that massive yet. What we are doing at the moment is we are utilizing a Euro account with our bank where we sort of transfer the money across when we feel it is at a favorable position and we do not really hedge any further than that. As the business grows in Europe, we will look to do some probably FX hedging as most bigger companies would do that have an operation in a different country. Can you speak to why it took so long to get the FY 2024 results communicated to investors? The real reason behind this is the acquisition.
We acquired a completely new business. We've had to do, you know, a component audit in France of the French business and then a group audit at, you know, group level, for overall. It just takes slightly longer, you know, to have what we have versus last year. About three weeks delay is probably not unreasonable considering we just purchased a completely new business that had to be audited for the first time. I think the follow-up question today is when can we expect the H1 FY 2025 results to be published? We will, as normal, go out with a trading update at some point in July, and then the interims are likely to be published similar time to previous years, which is around the sort of end of September time. Right.
In slide eight, Tortilla's like-for-like lags the market significantly at the start of 2024, and that was an inflection, particularly in November 2024, when Tortilla starts to significantly outperform the market like-for-like basis. Can you comment on what's changed there and why you lagged so much previously, and are you now, and why you're now outperforming? Maybe that's back to what we discussed,
but yeah, I guess it's, it's the fruition of the vital buy strategy, really. I mean, you know, in April, we kicked off a load of different transformation projects around our product as we talked around, bringing in our new Food Director in in the summer in June, starting to do limited time offers, getting kiosks in.
We trialed those in the early bit, well, sort of the spring of 2024, and then we really, after the initial results of those, ramped up our cadence on getting those into stores quite quickly. I guess a lot of it was back-weighted, which is why the profitability will improve considerably in time. Yeah, it's the fruits of the labor on that front. I mean, the other thing to point out is our new loyalty platform, and the push on that did not really start until September. That is why you start to see these things kind of compound in terms of their impact and to kind of really generate some strong sales growth. There is a piece here around the robotics partnership. Yeah, I mean, there are all sorts of things we are looking at that.
I do believe that if you were to do a swap diagram on Tortilla, I think that one of the opportunities of our concept is it will be easier to automate certain manual processes. I don't believe that there are processes that are highly manual and boring in nature. I think there are things that we can get our teams to do that'll be much more exciting for them in terms of interacting with customers. We are going to be looking at a lot of opportunities to automate back-of-house processes in the kitchen, but also on the servery, I think there is a much easier route to this than other brands. I can't talk in detail about that. We are still working through with Kaikaku on some concepts, but we would love to update in the coming months on some of that in a bit more detail.
Okay.
U.K. company-owned stores have been flattening for a few years. At what point do we see Tortilla start expanding? Is that ROI not attractive enough in the current environment to build company-operated stores in the U.K.? I think, to focus on that, is really that at the moment, our absolute number one priority when it comes to CapEx investment is to convert our stores in France and put the money towards that. That is why we sort of slowed down the U.K. kind of rollout to some extent. Also, we in the U.K. have focused our sort of management bandwidth really on all of the other sides of driving food, the marketing, the technology, and we still see room to progress that much further throughout 2025. Hence why we sort of slowed it down.
Following that, we will start to look at opening U.K.-owned stores again, but we probably were very targeted on where those are in sort of prime, sort of grade A locations, center of towns and shopping centers. Should things come up there, we will for sure look at it. When we have converted all the stores in France, that would be then when we will start looking at own stores again. In the meantime, we're still growing, and I think it's important to say that the franchise growth has been strong. We already, as I said before, have four new store openings through franchising this year and expecting another two to four this year. It could be up to eight stores in franchise opening across the Middle East and U.K.
Just to build on that, what I would highlight as well is, as the graph showed in the presentation, and the improvement of the business here in the U.K. in tertiary locations, smaller towns that we've opened in like Durham or Canterbury and places like this, the growth we're seeing in those is so strong that it does give you that confidence that the U.K. white space opportunity is really there in those smaller locations. I think there is a lot of opportunity to grow the business still in the U.K.
I think also from a return on investment point of view, the returns on kiosks and the servery equipment that we've put into stores is so significant in terms of the improvement in the like-for-likes, but also the payback on kiosks is so quick that it makes much more sense to deploy any cash that we do want to spend in the U.K. on that rather than new sites at the moment, like Maria said, whilst we're also working on that French opportunity. It is a conscious decision that we're making right now, but obviously we will revisit this when the situation changes and we've got further growth behind us.
Okay. Two questions here. What's your EBITDA margin target? And is it fair to say that for the existing sites, the growth in revenue is mostly due to hike in prices? But take that first.
The EBITDA margin, I think what we saw before here, in store EBITDA is that we grew it by 2 percentage points last year. We're now at 16.3%, and that's across the full estate. Our mature stores would be over 20% sort of store EBITDA, and that's really where we're looking to be for the whole estate, but specifically now as our sort of new store openings are starting to mature and not dragging that P&L down. We expect that to go up further and, yeah, get to that sort of 20% mark at a total level. I think previously, Andy, we have said around 10% as our store EBITDA, as a corporate level, and we sort of stand by that still as that sort of a target for the longer term.
Yeah.
I mean, hopefully even more than that with the world of tech and automation
and franchising, yeah,
and sales growth. Yeah, I think that is our sort of shorter term target, to try and get back to that over the coming years and sort of see how some of these other initiatives come to bear some results in the time as well.
I think that maybe the last bit there, so this existing site is mainly, growth is mainly driven by revenue. Yeah, I think yes, there is revenue growth in there, but as I said before, we are growing with 6%, four and a half is pricing. We're still in volume growth, which is quite significant to point out because if you compare with the market that's also priced, they are not seeing that volume growth at all at the moment.
Conscious we have only got two minutes, so it might be a good time to sort of wrap up.
Yeah.
I think, given that, yeah, we need to hit the end of the slot.
Yeah, that's great. Andy, Maria, I'd just like to thank you for answering the questions from investors. Of course, the company can view the questions submitted today, and we will publish the responses on the Investor Meet Company platform. Perhaps just before redirecting investors, provide you with their feedback, which I know is particularly important to the company. Andy, could I just ask you for a few closing comments?
Yeah, I think thank you for dialing in to listen to the update, and hopefully you can take away a feeling that we are making some big progress in the U.K.
It's been a busy 12 months, I think it's fair to say, but you know, with busyness comes excitement, and the team are very energized. We've got a very strong management team in the business now. We spent a lot of time getting that right. And yeah, we see lots of opportunities to continue on the same journey in the U.K. I think that, you know, there's still a lot of levers that we've not fully pulled, and we'll be pulling those over the next 12-24 months to keep that kind of cash generation building. And then, yeah, we're looking forward to getting some sites looking like Tortilla in France and seeing some good results from that expansion. You know, that was a strategic step for us, and yeah, we're dead excited about that.
Hopefully, all of you listening are feeling the same way about the kind of burrito opportunity in Europe. Yeah, that's probably about it from us now. Thank you very much for your time, everyone.
Thank you.
That's great, Andy, Maria. Thank you once again for updating investors today. Could I please ask investors not to close the session as you will now be automatically redirected to provide your feedback so the management team can better understand your views and expectations? On behalf of the management team of Tortilla Mexican Grill PLC, we'd like to thank you for attending today's presentation, and good morning to you.