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Franchise Brands PLC

Franchise Brands ready to add to network as Metro Rod beds in

Snapshot

Company is looking for more acquisitions after integration of Metro Rod

drainpipes

Quick facts: Franchise Brands PLC

Price: £0.84

Market: AIM
Market Cap: £64.86 m
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  • Franchise Brands PLC (LON:FRAN) comprises four main brands - drains specialist Metro Rod, car body repairer ChipsAway, dog groomer Barking Mad and Ovenclean.

  • Company looking for more acquisitions after integration of Metro Rod

  • At 82.5p, the company is worth £64.6mln

 

How it is it doing

A strong showing from its Metro Rod drain care and repair business helped profits soar in the first half of 2019.

Pre-tax profit rose 27% to £1.8mln (H1 18: £1.4mln) in the six months ended 30 June, on revenue of £20.1mln (H1 18: £16.8mln) – a 19% year-on-year increase.

Metro Rod, which Franchise acquired two years ago, was the standout performer, with sales growth accelerating to 15%. Underlying earnings jumped by 44% to £1.73mln (H1 18: £1.20mln).

Car body repairer ChipsAway also saw earnings rise in the period, more than offsetting drops in profitability at OvenClean and dog groomer Barking Mad.

 Franchise upped its interim by 43% to 0.30p per share (H1 18: 0.21p).

Looking ahead, Hemsley said he “remains very positive” on the outlook for the business and expects to deliver “further significant growth” in the current year and beyond. 

 

What the boss says: Stephen Hemsley, executive chairman

“We have started to look for more bolt-on acquisitions with the integration of drain maintenance business MetroRod now largely finished.

“More than 40% of franchisees are seeing sales growth of more than 20%.

“We want to expand the services it offers to a complete ‘water in and waste out’ product.

Chipsaway is also being prepared for the advent of electric cars.

“Everything is in the bumper, so a bang or scrape there means everything has to be re-calibrated.”

 

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Inflexion points

  • At MetroRod, Franchise Brands has a five-year plan to boost franchisee fee income four-fold by 2023
  • Company has spent heavily overhauling IT infrastructure and central support function
  • More acquisitions likely to utilise this franchise network infrastructure

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“A lot of businesses could benefit from professional central services,” says...

“A lot of people who operate franchises don’t do marketing, finances, recruitment or IT very well, so we use those skills we have in franchising to help the owners grow the franchise network,” Stephen Hemsley told Proactive. The executive chair of Franchise Brands PLC (LON:FRAN) also said...

on 26/3/18

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