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Franchise Brands urges shareholders to take share alternative for dividend

“We do expect to remain profitable overall, albeit at lower levels than originally anticipated"

Franchise Brands PLC -
Providing essential services as key workers

Franchise Brands PLC (LON:FRAN) has urged shareholders to take their dividends in shares rather than cash to help maintain its financial strength during the coronavirus crisis.

The franchise group still intends to pay a final dividend of 0.65p per share but it wants shareholders to follow the board’s lead and accept shares.

Franchise Brands’ B2B operations - MetroRod, Metro Plumb and Willow Pumps - have been deemed essential operations by the government and continue to operate normally.

The group's three consumer-facing businesses, however, have seen demand slump in the current crisis and franchise fees have been cut to help them survive.

Franchise Brands says its objective is to run the B2C side of the business at cash break-even while the crisis persists.

Volumes will be lower in B2B, but this division is still expected to trade profitably after a round of cost cuts.

In a statement, Stephen Hemsley, Franchise Brands' executive chairman, said: “We do expect to remain profitable overall, albeit at lower levels than originally anticipated.

"We have a robust balance sheet, which, in combination with the utilisation of the various government schemes, will enable us to support our people and franchisees during this challenging period.

“Metro Rod, Metro Plumb and Willow Pumps, with almost 450 engineers operating from nearly 50 depots around the UK, continue to provide essential services to ensure that the country's drains and water run smoothly throughout this crisis.”

Quick facts: Franchise Brands PLC

Price: 102.5 GBX

AIM:FRAN
Market: AIM
Market Cap: £98.15 m
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