Franchise Brands plc (AIM: FRAN), a multi-brand international franchisor, is pleased to announce its unaudited results for the six months ended 30 June 2019.
- Revenue increased by 19% to £20.1m (H1 2018: £16.8m).
- Fee and direct labour income increased by 25% to £10.6m (H1 2018: £8.4m).
- Adjusted EBITDA* increased by 25% to £2.5m (H1 2018: £2.0m).
- Profit before tax increased by 27% to £1.8m (H1 2018: £1.4m).
- Statutory profit after tax increased by 23% to £1.4m (H1 2018: £1.2m).
- Net debt** of £5.4m at 30 June 2019 (31 December 2018: £5.9m), with balance sheet gearing of 21% (31 December 2018: 24%).
- Basic EPS increased by 24% to 1.84p (H1 2018: 1.49p).
- Adjusted EPS*** increased by 22% to 2.06p (H1 2018: 1.69p)
- An interim dividend of 0.30p per share declared (interim 2018: 0.21p per share), an increase of 43%, 6.1 times covered by profit after tax (interim 2018: 7.1x).
- Metro Rod’s “Vision 2023” strategy is delivering increasingly tangible benefits:
- System Sales growth of 15% (H1 2018: 4%),
- 83% of the network is in growth (H1 2018: 73%) with 39% of franchisees growing at over 20% year-on-year (H1 2018: 25%),
- Local sales have grown 19% (H1 2018: 8%),
- Excellent progress in the development of new business systems: roll out of quotation system for additional works, implementation of finance system and trial of works management system.
- Substantial improvement in franchise recruitment at ChipsAway, Ovenclean and Barking Mad compared to H2 2018: 34 new franchisees recruited in our B2C businesses (H2 2018: 16).
- Successful launch of ChipsAway’s pilot Car Care Centre incorporating the technology required to repair and recalibrate cars fitted with Advanced Driver Assistance Systems (“ADAS”).
- New management at Barking Mad resulting in deeper integration with the Group and increased efficiencies.
*Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation and the share-based payment expense.
** Net debt has been restated as a result of our adoption of IFRS16 Leases. Please see notes to the financial statements for details.
*** Adjusted EPS is earnings per share before amortisation of acquired intangibles and the share-based payment expense.
Stephen Hemsley, Executive Chairman, commented:
“Franchise Brands has delivered a strong performance in the first half of 2019 driven primarily by Metro Rod’s accelerating rate of growth. 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.”
“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.”
“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.”