Franchise Brands Posts Strong Growth After Metro Rod Takeover

22nd Mar 2018 12:49

LONDON (Alliance News) - Multi-brand franchiser Franchise Brands PLC on Thursday posted a sharp increase in adjusted profit for 2017, as revenue rose five-fold on the back of its Metro Rod acquisition.

On a reported basis, Franchise Brands swung to a pretax loss in 2017 of GBP65,000 from a profit of GBP784,000 the year before, mainly due to acquisition costs. On an adjusted basis, the company reported a 72% jump in pretax profit to GBP2.1 million from GBP1.2 million.

Revenue for the year rose significantly, reaching GBP24.3 million from the GBP4.9 million recorded in 2016.

Franchise Brands is paying a final dividend on 0.33 pence per share, almost double the final payout in 2016 of 0.17p. The total for 2017 is thus 0.50p, compared to the 0.17p total in the year before.

During the year, the company acquired drain services firm Metro Rod for GBP28.4 million, and this has been trading in line with management expectations.

Other brands include car paintwork repair firm ChipsAway, oven cleaners OvenClean, and pet care company Barking Mad.

ChipsAway and OvenClean both reported adjusted earnings before interest, taxes, depreciation, and amortisation contribution growth of 15% year-on-year in 2017. Barking Mad made a "good" contribution, it said, and Metro Rod has made a GBP1.3 million Ebitda contribution in the nine months since acquisition.

Franchise Brands said 2018 has started in line with its expectations, and it looks to the future "with confidence".

Executive Chairman Stephen Hemsley said: "2017 has been a year of considerable progress in the development of Franchise Brands, with strong growth from the original brands, and the acquisition of Metro Rod has propelled the company into becoming one of the largest franchise groups in the country."

"Metro Rod has a market-leading national offering in the commercial drainage market which has never been fully exploited and its upside potential is substantially greater than we originally anticipated."

Hemsley added: "The implementation of the new strategy we have formulated is well underway, and I am confident that the additional investment we are making in the business, combined with the quality and experience of the management team we now have in place, will allow us to unlock that potential over the next two years."

Shares were down 1.3% on Thursday at 71.10 pence each.

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