Franchise Brands PLC – Half-year results

Franchise Brands PLC – Half-year results

Franchise Brands plc (AIM: FRAN), a multi-brand international franchisor, is pleased to announce its unaudited half year results for the period ended 30 June 2018.

Financial highlights

  • Statutory revenue up 88% to £16.8m (H1 2017: £8.9m).
  • Recurring Management Service Fee (“MSF”) income up 86% to £5.4m (H1 2017: £2.9m) and is now 64% of total fee income (H1 2017: 57%).
  • Adjusted EBITDA* increased by 46% to £1.8m (H1 2017: £1.3m).
  • Adjusted profit before tax* up 41% to £1.4m (H1 2017: £1.0m).
  • Profit before tax of £1.4m (H1 2017: loss of £0.2m).
  • Statutory profit after tax of £1.2m (H1 2017: loss of £0.2m).
  • Cash generated from operating activities of £1.5m (H1 2017: £0.7m).
  • Strong cash conversion of 83% (H1 2017: 54%).
  • Net debt of £5.5m at 30 June 2018 (31 December 2017: £6.3m).
    Gearing at 30 June 2018 of 23% (31 December 2017: 27%).
  • Basic and adjusted EPS* of 1.5p (H1 2017: basic loss of 0.40p; adjusted profit of 1.3p).
  • Interim dividend of 0.21p per share declared, an increase of 24% (H1 2017: 0.17p per share).

Operational highlights

  • 41 new franchisees recruited (H1 2017: 49).
  • Continuing significant investment in IT: included new telephone technology and works management automation.
  • Launch of Metro Rod “Vision 2023” to accelerate business growth.
  • Establishment of Exeter as Metro Rod corporate franchise.
  • Completion of 88,000 jobs at Metro Rod, an increase of 15% from the equivalent period in 2017.

*Adjusted items are before costs of acquisitions of subsidiaries, costs of transition of subsidiaries, exceptional bad debt provision and IPO expenses and, in relation to EBITDA only, share-based payment expense.

Stephen Hemsley, Executive Chairman, commented:  “The first half of 2018 has been a period of pleasing progress for Franchise Brands with the business as a whole performing as expected. Metro Rod is capable of significant growth and I am very encouraged that we have started to see the benefits coming through of the new strategy. The investment we are making will help unlock Metro Rod’s potential; new technology is already allowing us to automate processes, reduce costs and provide a superior customer experience.

“ChipsAway, Ovenclean and Barking Mad have performed solidly, delivering high levels of cash conversion. It is encouraging to see further growth in high-margin MSF income across all these brands.

“The outlook for the Group remains very positive and I look forward to the remainder of 2018 with confidence.”

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