leadf
logo-loader
viewFranchise Brands PLC

Franchise Brands to come out of lockdown on front foot after fundraise

Snapshot

  • Comprises Metro Rod, ChipsAway, Barking Mad and Ovenclean.
  • Looking for more acquisitions
  • Raised £14mln to give it firepower for deals
drainpipes

Quick facts: Franchise Brands PLC

Price: 107.5 GBX

AIM:FRAN
Market: AIM
Market Cap: £102.9 m
Follow

We have started to look for more bolt-on acquisitions with the integration of drain maintenance business MetroRod now largely finished.

Stephen Hemsley, executive chairman

How it's doing

Franchise Brands PLC's (LON:FRAN) B2B operations - MetroRod, Metro Plumb and Willow Pumps - were deemed essential operations by the government and operated normally during the pandemic.

The group's three consumer-facing businesses were affected by the crisis and franchise fees were 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 April, the company raised £14mln through a placing at 90p a share 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”.

In July the company said it will carry out a discretionary share buy-back £200,000 out to December 31 to improve shareholder returns.

 

What the boss says: Stephen Hemsley, executive chairman

“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.”

 

Inflexion points

  • B2B businesses Metro Rod, Metro Plumb and Willows Pumps deemed essential services
  • Expected to remain profitable in 2020 as a result
  • B2C business run on a cash break-even basis while coronavirus crisis persists
  • Looking for add-on acquisitions 

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of Franchise Brands PLC named herein, including the promotion by the Company of Franchise Brands PLC in any Content on the Site, the Company...

FOR OUR FULL DISCLAIMER CLICK HERE

VOX Royalty set to generate 'significant economic returns in the long-term'

Proactive’s Mining Analyst, Dr Ryan D. Long introduces Vox Royalty (TSX-V:VOX) a precious metals focused, mining royalty and streaming business. Long explains how Vox stands up against its competitors and how it is creating a portfolio of cash generating mining and development stage...

3 days, 19 hours ago

2 min read