Franchise Brands raises £14mln as plumbing businesses see continuing demand

May 24, 2020

Franchise Brand PLC (LON:FRAN) said its drain specialist businesses – Metro Rod, Metro Plumb and Willow Pumps – have seen ‘continuing demand” for a majority of their services, having been designated as essential under the UK government’s pandemic rules, and the group also revealed it has raised £14mln via a share placing.

 
In a trading update released after the close on Monday, the franchise business said it expected the B2B division, which includes Metro Rod, Metro Plumb and Willow, to continue to trade profitably during the coronavirus lockdown, adding that in the first quarter of the year, underlying earnings (EBITDA) for the division were 42% higher year-on-year, while growth in Metro Rod system sales accelerated to 19% from 14%.

Meanwhile, the company’s B2C division, which includes its brands ChipsAway, Ovenclean and Barking Mad, was 5% ahead of the prior year in the first quarter, although the company said it had “significantly reduced or eliminate” franchise fees as the pandemic impacted customer demand for the franchisee’s products from early March.

Related: The Ultimate Guide to Home Improvement Franchises in the UK

Franchise Brands added that it has taken a number of actions to preserve cash and strengthen liquidity, including staff furloughs and salary cuts for its board and senior management.

Looking ahead, the company said its first-quarter EBITDA was up 27% on the prior year, and that this added to its cost-saving measures meant it should be able to generate a positive but reduced adjusted EBITDA through the period, with a “strong recovery” anticipated in the key B2B division as business premises were re-occupied.

The B2C arm is expected to mount a slower recovery, with the firm estimating a full quarter for activity levels and income to be fully restored.

Related: Home Improvement Franchises – Search Franchise Reviews Directory

Share placing

Franchise Brands also said it carried out a placing at 90p a share that raised £14mln with directors and senior management putting up £2.07mln. Executive chairman Stephen Hemsley subscribed for £1.35mln worth of shares to take his stake to 23.2%.

As well as strengthening the balance sheet, Franchise Brands said the placing will help position it to take advantage of “earnings-enhancing external growth opportunities”, saying it had “considerable interest” in acquisitions to expand the range of services offered by Metro Rod, Metro Plumb and Willow Pumps.

Related: Metro Rod Franchise

“The group had strong momentum ahead of the [coronavirus] crisis, with Q1 trading showing significant growth on the prior year and a continuation of the accelerating rate of sales growth in its B2B division in particular.

“We have taken all the necessary actions to enable us to trade through this current uncertain period profitably, albeit at a significantly lower level”, Hemsley said in a statement.

The company’s shares rose 4% to 96p on Tuesday.

By Calum Muirhead

Source: Proactive Investors

Franchise Brands rises as plumbing businesses see continuing demand

April 21, 2020

Franchise Brand PLC’s (LON:FRAN) drain specialist businesses, Metro Rod, Metro Plumb and Willow Pumps, have seen ‘continuing demand” for a majority of their services, which have been designated as essential under the UK government’s pandemic rules.

 
In a trading update released after the close on Monday, the franchise business said it expected the B2B division, which includes Metro Rod, Metro Plumb and Willow, to continue to trade profitably during the coronavirus lockdown, adding that in the first quarter of the year, underlying earnings (EBITDA) for the division were 42% higher year-on-year, while growth in Metro Rod system sales accelerated to 19% from 14%.

Related: The Ultimate Guide to Home Improvement Franchises in the UK

Meanwhile, the company’s B2C division, which includes its brands ChipsAway, Ovenclean and Barking Mad, was 5% ahead of the prior year in the first quarter, although the company said it had “significantly reduced or eliminate” franchise fees as the pandemic impacted customer demand for the franchisee’s products from early March.

Franchise Brands added that it has taken a number of actions to preserve cash and strengthen liquidity, including staff furloughs and salary cuts for its board and senior management.

Looking ahead, the company said its first-quarter EBITDA was up 27% on the prior year, and that this added to its cost-saving measures meant it should be able to generate a positive but reduced adjusted EBITDA through the period, with a “strong recovery” anticipated in the key B2B division as business premises were re-occupied.

Related: Home Improvement Franchises – Search Franchise Reviews Directory

The B2C arm is expected to mount a slower recovery, with the firm estimating a full quarter for activity levels and income to be fully restored.

Share placing

Franchise Brands also unveiled plans for a share placing to issue up to 19.9% of its current issued share capital, with certain directors and senior management to participate to raise a minimum of £2mln.

The placing will be conducted through an accelerated bookbuild by Dowgate Capital and Allenby Capital and began immediately following the announcement on Monday.

The company said the placing will provide additional working capital funding, improve its liquidity and eliminate its overall net debt as part of efforts to ensure it has “a strong balance sheet and is well placed for the recovery once the [coronavirus] crisis subsides”.

Related: Metro Rod Franchise

Franchise Brands added that the placing will help position it to take advantage of “earnings-enhancing external growth opportunities”, saying it had “considerable interest” in acquisitions to expand the range of services offered by Metro Rod, Metro Plumb and Willow Pumps.

“The group had strong momentum ahead of the [coronavirus] crisis, with Q1 trading showing significant growth on the prior year and a continuation of the accelerating rate of sales growth in its B2B division in particular. We have taken all the necessary actions to enable us to trade through this current uncertain period profitably, albeit at a significantly lower level”, Franchise Brands’ executive chairman Stephen Hemsley said in a statement.

“We see considerable opportunity across our businesses and this Placing will ensure that we are very well-positioned to capitalise on external growth opportunities as we emerge from the [coronavirus] crisis”, he added.

The company’s shares rose 1.1% to 93p in early trading on Tuesday.

By Calum Muirhead

Source: Proactive Investors

Franchise Brands confirms significant growth in 2019 and strong start to current year

January 16, 2020

Franchise Brands PLC’s (LON:FRAN) results for 2019 will show significant growth over the previous year and at least match market expectations for £40.6mln of sales and underlying profits of £5.2mln.

 
Drain maintenance group Metro Rod led the improvement with 14% higher sales compared with 10% growth a year earlier, while recent acquisition Willow Pumps has integrated well and broadened the range Metro Rod can offer.

Related: The Ultimate Guide to Home Improvement Franchises in the UK

Trading in 2020 had also started well, the AIM-listed group said, with job intake at Metro Rod and Willow Pumps up on the same period in 2019 and a strong start to the year for franchisee recruitment in the B2C brands.

A net 17 new franchisees were added over 2019 to its consumer-facing brands – ChipsAway, Ovenclean and Barking Mad – to take the number to 404.

Stephen Hemsley, executive chairman said: “The Group has delivered a strong performance in 2019, which, in combination with the recent acquisition of Willow Pumps, leaves us confident about the prospects for Franchise Brands as we enter 2020.”

Related: Home Improvement Franchises – Search Franchise Reviews Directory

“Longer-term, the Group has a significant opportunity to provide a ‘Water In, Waste Out’ range of drainage, pumps and plumbing-related services on a national basis,” he added.

By Philip Whiterow

Source: Proactive Investors

‘Strategic acquisition’ by Franchise Brands

December 17, 2019

The multi-brand franchisor, Franchise Brands, has announced the acquisition of Willow Pumps, a water pump supply, installation and servicing business to complement and expand its plumbing brand, Metro Rod.

 
A family-owned business, Willow Pumps was founded in 1992 by Ian Lawrence to offer pump installation both below and above-ground. It offers routine servicing to its clients to reduce pump failures or blockages and has built a client base of customers in the hospitality, retail and housebuilding sectors.

Metro Rod sees the acquisition as a strategic opportunity for the company and its franchisees who will be given the opportunity to upskill, identify and self-deliver pump work utilising Willow Pumps’ expertise. This additional pump work is also expected to enhance franchisee’s profitability said the company.

Related: The Ultimate Guide to Home Improvement Franchises in the UK

Lawrence will continue as managing director of Willow Pumps, which currently employs 74 people, including 35 engineers, the majority of which operate from its main business premises at Aylesford, Kent. Lawrence will also join the senior management team at Franchise Brands.

Stephen Hemsley, executive chairman of Franchise Brands, commented: “The acquisition of Willow Pumps, a highly respected business and one of the leaders in the market, 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.

Related: Home Improvement Franchises – Search Franchise Reviews Directory

“The long-term aim of the Group is to be able to serve our valued commercial customers with a “water in, waste out” range of plumbing-related services on a national basis. I am really looking forward to working with Ian Lawrence and his high-quality management team to create a national leader for drainage, pump and plumbing services.”

Lawrence said: “I am very excited about building on our success to date as part of a larger, publicly-quoted group with significant ambitions in the drainage, pumps and plumbing markets. The Group’s management and wider resources will be of particular value as we continue to grow Willow Pumps under Franchise Brands’ ownership.”

Related: Metro Rod Franchise

Metro Rod has a national network of more than 400 engineers working from 43 franchised depots. It offers a range of services from CCTV surveys and drain clearance to fat and grease management. The company also supports commercial clients with reactive and planned preventative maintenance services.

Source: Franchise World

Franchises expand into Ireland for first time

December 12, 2019

Metro Rod and Barking Mad – both of which are part of the Franchise Brands group – have entered Northern Ireland and the Republic of Ireland for the first time.

 
The former is a commercial drainage specialist which has opened a franchise in Dundonald, allowing it to directly provide its drain clearance and maintenance services across Northern Ireland.

Related: Home Improvement Franchises – Search Franchise Reviews Directory

It now has 43 depots across the UK.

Dog sitting services provider Barking Mad has launched its first international franchise in the Galway and Limerick area as part of its ambitious expansion plans.

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Stephen Hemsley, executive chairman of Macclesfield-based Franchise Brands, said: “We are delighted to be expanding our presence in Ireland with new franchisees for Metro Rod and Barking Mad, which we believe bring differentiated services to Northern Ireland and the Republic of Ireland, respectively.

Related: Metro Rod Franchise

“This further move into Ireland demonstrates the continued momentum at Franchise Brands as we continue to invest in the infrastructure to support the development, growth and profitability of our franchisees.

Related: Barking Mad Franchise

“I am certain that our new franchisees have a bright future and I look forward to seeing them grow successful businesses.”

Source: Insider Media

Franchise Brands acquires Willow Pumps to expand Metro Rod network

October 10, 2019

Franchise Brands PLC (LON:FRAN) has acquired Willow Pumps to expand its existing drain care and repair business, Metro Rod.

Bringing the two brands together, the long-term goal is to provide a “water in, waste out” range of plumbing-related services to commercial customers in the UK.

 
Franchise Brands, an international franchisor providing the same support services to a range of businesses, is acquiring 100% of Willow Pumps for an initial £5mln and a deferred consideration of up to £7.5mln, payable over the next five years based on performance.

Related: The Ultimate Guide to Home Improvement Franchises in the UK

Willow Pumps recorded revenue of £12.4mln, underlying earnings (EBITDA) of £1.6mln and a profit before tax of £1.1mln in the year ended 31 December 2018.

The water pump supply, installation and servicing business will complement the services provided by Metro Rod, a drain and care repair business acquired two years ago, at the centre of a five-year strategy.

Related: Home Improvement Franchises – Search Franchise Reviews Directory

Metro Rod, where the plan is to boost fee income four-fold by 2023, recorded 15% sales growth in the year-to-date, while last year they were up 6%.

The company will open “shortly” a new depot in Lincoln and began trading at its first Norther Ireland facility last week for Metro Rod.

Related: Metro Rod Franchise

Shares were up 11.58% to 92.05p in the early morning.

By Giulia Bottaro

Source: Proactive Investors

Franchise Brands profit up 27% amid higher fee revenue

July 26, 2019

Repairs and maintenance franchiser Franchise Brands booked a 27% rise in first-half profit underpinned by higher fee and direct labour income.

Pre-tax profit for the six months through June rose to £1.8m, as revenue rose 19% to £20.1m.

 
The company declared an interim dividend of 0.30p per share, up 43% on-year.

‘Franchise Brands has delivered a strong performance in the first half of 2019 driven primarily by Metro Rod’s accelerating rate of growth,’ executive chairman Stephen Hemsley said.

Related: The Ultimate Guide to Home Improvement Franchises in the UK

‘All of our profitable, cash generative B2C brands have seen a substantial improvement in franchise recruitment compared to the challenging second half of last year.’

‘ChipsAway is increasingly well positioned for the rapid changes underway in the automotive sector in particular in relation to ADAS and the growth of electric and hybrid vehicles.’

Related: Home Improvement Franchises – Search Franchise Reviews Directory

‘The outlook for the group therefore remains very positive, with the combination of accelerating organic growth and the potential for prudently financed, earnings-enhancing complementary acquisition opportunities giving us the confidence of delivering further significant growth in earnings and dividends in the current year and beyond.’

At 2:41pm: (LON:FRAN) Franchise Brands Plc share price was +6p at 90p

Source: Shares Magazine

Franchise Brands’ first-half profits pushed higher by Metro Rod

July 24, 2019

Franchise acquired Metro Rod a couple of years ago, and it is now starting to reap the reward of its hefty investment in the business.

A strong showing from its Metro Rod drain care and repair business helped profits at Franchise Brands PLC (LON:FRAN) soar in the first half of the year.

 
Pre-tax profit rose 27% to £1.8mln (H1 18: £1.4mln) in the six months ended 30 June, on revenue of £20.1mln (H1 18: £16.8mln) – a 19% year-on-year increase.

READ: Franchise Brands ready to add to network as Metro Rod beds in
Metro Rod, which Franchise acquired two years ago, was the standout performer, with sales growth accelerating to 15%. Underlying earnings jumped by 44% to £1.73mln (H1 18: £1.20mln).

Car body repairer ChipsAway also saw earnings rise in the period, more than offsetting drops in profitability at OvenClean and dog groomer Barking Mad.

Both OvenClean and Barking Mad recruited fewer new franchisees in the half, while the latter has also been reorganised following the departure of the founder.

Related: The Ultimate Guide to Home Improvement Franchises in the UK

Given the surge in group profits, Franchise has upped its interim by 43% to 0.30p per share (H1 18: 0.21p).

Franchise recruitment picking up
“Franchise Brands has delivered a strong performance in the first half of 2019 driven primarily by Metro Rod’s accelerating rate of growth,” said executive chairman Stephen Helmsley.

Related: Home Improvement Franchises – Search Franchise Reviews Directory

“We have made significant progress with our strategy at Metro Rod and have begun to realise the benefits of our investment in infrastructure – in particular IT – that is starting to unlock sales growth, efficiencies and improved customer service, enhancing both corporate and franchisee profitability.

He added: “All of our profitable, cash generative B2C brands have seen a substantial improvement in franchise recruitment compared to the challenging second half of last year and ChipsAway is increasingly well positioned for the rapid changes underway in the automotive sector in particular in relation to ADAS and the growth of electric and hybrid vehicles.”

Related: Metro Rod Franchise

Looking ahead, Helmsley said he “remains very positive” on the outlook for the business and expects to deliver “further significant growth” in the current year and beyond.

Source: Proactive Investors

Franchise Brands on the prowl for acquisitions

March 15, 2019

“2018 has been a period of significant change for the team at Franchise Brands as we have integrated Metro Rod and further developed our shared support services of IT, finance, marketing and franchisee recruitment,” said executive chairman, Stephen Hemsley.

The multi-brand franchisor, Franchise Brands PLC (LON:FRAN), is looking forward to the year with confidence after making a strong start to the year.

The company behind franchise brands ChipsAway and Metro Rod said it was looking for more acquisition opportunities now that the integration of Metro Rod is complete.

2019 has started encouragingly, with a good trading performance across the networks in the first two months of the year and order intake at Metro Rod ahead of 2018. The level of franchise enquiries at ChipsAway, Ovenclean and Barking Mad is also significantly ahead of last year, the group revealed.

Franchise Brands reported a 43% increase in revenue to £35.5mln in 2018 from £24.9mln in 2017.

Fee income increased by 41% to £17.9mln from £12.7mln the year before.

Related: Franchise Brands lays the foundations for another 10 years

Adjusted profit before tax, which strips out what the company considers to be exceptional items, surged 36% to £2.9mln from £2.1mln the year before, while statutory profit before tax turned positive at £2.3mln versus a loss in 2017 of £0.1mln.

Cash generated from operations shot up to £2.9mln from £0.7mln in 2017. Net debt at the end of the year had narrowed to £5.0mln from £6.3mln at the end of 2017.

Dividend rises

Shareholders have been rewarded with a 34% increase in the total dividend for the year (0.67p, up from 0.5p the year before) after the final dividend was whacked up to 0.46p from 0.33p the previous year.

“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 Stephen Hemsley, the executive chairman.

“We will consider the selective acquisition of reasonably valued and earnings enhancing franchise businesses that can leverage our core functions, and complementary drainage and plumbing businesses which expand our scope of works,” he added.

Shares in Franchise Brands opened 6.6% higher at 72.5p.

Source: Proactive Investors

Franchise Brands continues share buy-back programme into 2019

January 6, 2019

Franchise Brands plc (LON:FRAN) has announced a continuation of its share buy-back programme, with up to £200,000 of shares to be purchased before June 30.

The cash generative group said the programme is an offset to the dilutive impact of employee share option awards.

Related: Franchise Brands plc lays the foundations for another 10 years

It is being assisted by Dowgate Capital Stockbrokers which will carry out on-market purchases of shares on the company’s behalf, including during closed periods for the company.

READ: Franchise Brands plc lays the foundations for another 10 years

The company owns four main brands – drains specialist Metro Rod, car body repairer ChipsAway, dog groomer Barking Mad and Ovenclean – and it has just celebrated its tenth anniversary.

Metro Rod, the largest of the franchise operations, completed 88,000 jobs during the interim period to March, said Hemsley, a 15% rise on the same period a year ago.

Related: Franchise Brands PLC (LON:FRAN) Declares Dividend Increase – GBX 0.33 Per Share

In the first half of the current year, MetroRod, which deals with problems with commercial premises, generated MSF income of £3.5mln, or a run-rate of £7mln per year, but the plan is to boost this four-fold.

Source: Proactive Investors