Franchise Brands to come out of pandemic firing on all cylinders
- Franchise Brands confirms strong recovery in first half
- Franchise Brands announce record profits and an ambitious acquisition strategy
Quick facts: Franchise Brands PLC
Price: 137 GBX
Market Cap: £131.19 m
About the company
Franchise Brands PLC is focused on building market-leading businesses in selected customer segments using primarily a franchise model.
The group currently has a combined network of over 425 franchisees across five principal franchise brands.
The company's focus is on established brands which can benefit from its shared support services, specialist sector expertise, management experience and group resources.
How it is doing
Revenue for the six months ended June 30 was £28.6mln, up from £24.2mln in the same period a year ago. Earnings (adjusted EBITDA) rose 50% to £4.2mln and statutory profit was 200% higher at £2.6mln.
Cash conversion was strong, at 84% vs a 2020 comparative of 38%, and the group ended the half with £5.2mln of net cash. An interim dividend of 0.6p per share was declared, double the 0.3p interim payment in 2020.
"The first half of 2021 has been a period of strong recovery from the COVID-impacted performance in 2020, despite the lockdown in Q1,” said executive chair Stephen Hemsley. "The strength of our brands, our people and our franchisees have allowed us to weather the storm and emerge fitter and stronger as both a team and as a business.
System sales at the B2B division increased by 21% compared with 2020 and 17% compared with 2019 to £23.8mln, with June in particular surging £4.3mln, up 41% from last year and 26% from 2019.
Metro Rod and Metro Plumb have 9,300 jobs on their books, topping the previous record reached in the run-up to Christmas 2019 by 4%.
What management says
After a strong recovery across the entire business, Stephen Hemsley, executive chairman of Franchise Brands (LON:FRAN) tells Proactive London "We are confident that the full year performance will be ahead of current consensus market expectations."
The company is an international multi-brand franchisor and Hemsley put the strong performance of commercial drainage specialist Metro Rod down to the 21% increase in system sales and tight cost control, and he expects an acceleration in H2 sales for pump supply, installation and servicing business Willow Pumps as the hospitality sector in particular fully reopens.
He's now focused on more acquisitions but says unusually the pool of potential targets is slim, but he's determined to find enterprises that are a perfect fit for the portfolio.
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