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Franchise Brands sees potential for growth in 2020

Snapshot

  • Comprises Metro Rod, ChipsAway, Barking Mad and Ovenclean.
  • Looking for more acquisitions
  • Shares have doubled over past twelve months
drainpipes

Quick facts: Franchise Brands PLC

Price: 104.5 GBX

AIM:FRAN
Market: AIM
Market Cap: £83.27 m
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We have started to look for more bolt-on acquisitions with the integration of drain maintenance business MetroRod now largely finished.

Stephen Hemsley, executive chairman

How it is doing

Franchise Brands PLC (LON:FRAN) acquired Willow Pumps in October to expand its existing drain care and repair business Metro Rod.

Bringing the two brands together, the long-term goal is to provide a “water in, waste out" range of plumbing-related services to commercial customers in the UK.

A strong showing from Metro Rod helped revenues rise strongly over 2019.

In a trading update in January the company noted: "The year will show significant growth over the previous year and at least match market expectations for £40.6mln of sales and underlying profits of £5.2mln".

A B2B business, Metro Rod's sales rose 14% (compared with 10% growth a year earlier) with the full benefit of the addition of Willow Pumps and the broadened range on offer still to come.

Trading in 2020 had started well, the AIM-listed group said, with healthy franchisee recruitment in the B2C brands - ChipsAway, Ovenclean and Barking Mad.

A net 17 new franchisees were added over 2019 to these businesses to take the number to 404.

As of 5 March, the firm said it had not seen any impact from the coronavirus outbreak, though it has plans to mitigate potential consequences on employees, franchisees, customers and suppliers.

 

What the boss says: Stephen Hemsley, executive chairman

"We look forward to 2020 with considerable confidence given the group's strong start to the current year and the clear opportunities for growth we see across both our B2B and B2C divisions, particularly as we increasingly realise the benefits of our Vision 2023 strategy and our investment in new capabilities, capacity and a broader range of services at Metro Rod." 

 

Video

Inflexion points

  • Chipsaway is 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.”
  • 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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Full interview: Franchise Brands views 2020 with 'considerable confidence'

Franchise Brands (LON:FRAN) posted a 29% increase in adjusted underlying earnings (EBITDA) for 2019, driven by accelerating Metro Rod system sales. Charismatic CEO Stephen Hemsley is delighted with the results and came into Proactive London to tell investors more. The multi-brands...

3 weeks, 2 days ago

2 min read