13th Mar 2019 11:03
LONDON (Alliance News) - Franchise Brands PLC on Wednesday reported a swing to profit in 2018 on the back of the integration of recently acquired brand Metro Rod.
Shares in Franchise Brands were up 7.3% in mid-morning trading in London at 72.99 pence each.
In 2018, the company swung to a pretax profit of GBP2.9 million from a pretax loss of GBP84,000 in 2017.
Revenue increased 43% to GBP35.5 million from GBP24.9 million in 2017. Franchise Brands' fee income 37% to GBP3.7 million from GBP2.7 million.
In 2017, Franchise Brands booked a GBP1.1 million subsidiary acquisition cost and GBP734,000 in subsidiary transition costs, both of which were not repeated in 2018.
The company upped its final dividend by 39% to 0.46 pence per share, resulting in a total dividend of 0.67p, 34% higher than the 0.50p distributed in 2017.
"Franchise Brands has made considerable progress in 2018. The investment we have made in Metro Rod to support our Vision 2023 strategy is beginning to deliver tangible benefits which I expect to become increasingly more visible in the current year and beyond as we continue to unlock the clear potential for the business," said Executive Chair Stephen Hemsley.
The sharp rise in revenue was attributed to a full year's recognition of recently acquired subsidiary Metro Rod. Franchise Brands owns four brand franchises: drain clearance and maintenance services provider Metro Rod; mobile car paintwork repairer ChipsAway; oven cleaning business Ovenclean; and dog home boarding firm Barking Mad.
Metro Rod and Ovenclean reported a rise in earnings before interest, tax, depreciation and amortisation of 91% and 2.4%, respectively. ChipsAway earnings were flat, but Barking Mad saw a 27% decrease in Ebitda.
As a result, group Ebitda was up 37% to GBP3.7 million.
On a pro forma basis, Metro Rod's system sales increased 10% to GBP37.4 million in 2018. Franchise Brands said its area sales from ChipsAway, Ovenclean and Barking Mad were "disappointing" in 2018.
Hemsley added: "2019 has started encouragingly, with a good trading performance across the group's businesses in the first two months of the year and we, therefore, look forward to the year ahead with confidence".
Franchise Brands said it will focus on acquisition opportunities in 2019 now that its integration of Metro Rod is complete.
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