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Franchise Brands doubles in value as restructuring pays off

Snapshot

  • Comprises Metro Rod, ChipsAway, Barking Mad and Ovenclean.
  • Looking for more acquisitions
  • Shares have doubled over past twelve months
drainpipes

Quick facts: Franchise Brands PLC

Price: 151 GBX

AIM:FRAN
Market: AIM
Market Cap: £120.03 m
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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 (LON:FRAN) acquired Willow Pumps in October 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.

A strong showing from Metro Rod helped revenues rise strongly over 2019.

In a trading update in January the company noted: "The year 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".

A B2B business, Metro Rod's sales rose 14% (compared with 10% growth a year earlier) with the full benefit of the addition of Willow Pumps and the broadened range on offer still to come.

Trading in 2020 had started well, the AIM-listed group said, with healthy franchisee recruitment in the B2C brands - ChipsAway, Ovenclean and Barking Mad.

A net 17 new franchisees were added over 2019 to these businesses to take the number to 404.

What the boss says: Stephen Hemsley, executive chairman

"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." 

Inflexion points

  • Chipsaway is being prepared for the advent of electric cars.
  • “Everything is in the bumper, so a bang or scrape there means everything has to be re-calibrated.”
  • At MetroRod, Franchise Brands has a five-year plan to boost franchisee fee income four-fold by 2023
  • Company has spent heavily overhauling IT infrastructure and central support function
  • More acquisitions likely to utilise this franchise network infrastructure

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