7th Oct 2019 10:11
(Alliance News) - Franchise Brands PLC said Monday its second half of the year has started "encouragingly," whilst it acquired water pump services firm WPL Group Holdings Ltd for up to GBP7.5 million.
The multi-brand franchising firm said it would acquire WPL as well as its subsidiaries Willow Pumps Ltd and Willow Drainage Ltd for an initial GBP5.0 million, paid through GBP4.0 million in cash and the remainder in Franchise shares at a price of 82.5 pence each.
Shares in Franchise were 12% higher at 92.00 pence in London on Monday. Following admission of the initial consideration shares - expected on Thursday- the firm will have 79.3 million shares outstanding.
In addition, Franchise could pay a further GBP2.5 million in deferred cash consideration based on profit performance over the next five years.
In 2018, WPL generated GBP1.1 million in pretax profit from revenue of GBP8.4 million. Franchise expects the acquisition to be "significantly" earnings enhancing. Over the same period, Franchise generated GBP2.9 million in pretax profit on revenue of GBP35.5 million.
Franchise Executive Chair Stephen Hemsley said he was "delighted" by the acquisition which "represents an important step in expanding Metro Rod's scope of services to the commercial market, consistent with our Vision 2023 strategy."
"The acquisition of Willow Pumps, which Metro Rod has already worked alongside, provides the optimum way for Metro Rod to enter the specialist pump sector and develop this expertise across our franchise community," Hemsley added.
In addition, Franchise said the second half of 2019 had "started encouragingly" with momentum at Metro Rod being maintained. Within its business to consumer brands, the firm experienced an "improvement" in franchise recruitment.
"This good trading performance together with strong momentum across the group means that the board looks forward to the remainder of the year with confidence," Franchise said in a statement.
By Ahren Lester; [email protected]
Copyright 2019 Alliance News Limited. All Rights Reserved.
Related Shares:
Franchise Brands