Macclesfield-based multi-brand franchise business, Franchise Brands, reported “resilient” interim results today. Revenues increased by 35% to £69.8m, in the six months to June 30 2024, while system sales showed a 42% increase to £206m. The group recorded a statutory profit of £3.618m, a turnround from the £611,000 deficit the previous year. Consequently, the interim dividend has been increased by 10%, to 1.10p per share.
Performance of Key Divisions
The Pirtek Europe division generated record total system sales of £92.8m, up two per cent on a like-for-like basis, a resilient performance given more subdued market conditions. The integration of Pirtek Europe into the group continues to progress well, particularly in IT.
Metro Rod delivered record system sales of £39.3m an increase of five per cent, while there was significant improvement in Willow Pumps’ profitability. There was also an increase in system sales at Filta International of five per cent to a record £45m, despite weaker used cooking oil price.
Macroeconomic Headwinds
The group said its full year outlook is in line with the current range of market expectations. The resilient underlying demand for the Group’s essential reactive services means that the business performed satisfactorily despite the macroeconomic headwinds. Executive chairman, Stephen Hemsley, said: “Underlying demand for the group’s essential reactive services resulted in a resilient performance in the first half of 2024, with all our key divisions achieving record system sales, despite some anticipated moderation in demand across certain sectors.
This is enabling us to generate both the profitability and cash flow required to reduce the debt taken on to fund the Pirtek Europe acquisition.”
Future Growth Potential
Hemsley added: “We have made solid progress, with the integration of Pirtek Europe progressing well, as we look to drive organic growth through cross selling across the group, enabled by common IT platforms in place. We also believe technology will be key to unlocking the benefits of operational gearing and will play a significant part in underpinning future margin expansion.
Whilst mindful of continued uncertainty in some markets, early signs of improving macroeconomic sentiment and our pipeline of opportunities should support an improvement in demand and a full year performance in line with the current range of market expectations for Adjusted EBITDA.”
He said: “We are confident in the significant growth potential of our principal franchise brands as they grow their small shares of large, fragmented markets, expand their range of services and geographical penetration, and cross-sell to our large customer base. The platform for growth we are building as we focus on integrating our recent acquisitions supports the strategic ambitions set out at our Capital Markets Day held earlier this year.”
Begbies Traynor Reports Strong Financial Performance
Begbies Traynor Group, the Manchester-based insolvency specialist, is holding its annual general meeting today, at which executive chairman, Ric Traynor, will say: “The last financial year was another successful one of strong financial performance and represented the continuation of a decade of profitable growth.
This has been driven by our proven growth strategy of investing in organic development and earnings enhancing M&A, resulting in a diversified and resilient business. We have delivered this strong financial performance through the cycle, having tripled the size of the business, underpinned by a six-fold increase in adjusted profit before tax since 2014.
The business remained highly cash generative, which enabled us to propose a five per cent increase in the dividend, representing our seventh consecutive year of dividend growth.”
His statement goes on: “We have made a good start to our new financial year with encouraging activity levels, whilst continuing to invest in organic development through the recruitment of additional senior fee earners across the group. Results for the first quarter to 31 July 2024 were in line with our expectations, reporting double digit growth in both revenue and adjusted profits versus the comparative period in 2023.
We remain confident of delivering market expectations for the full year, reflecting positive momentum across the group and continuing elevated insolvency levels. There continue to be attractive opportunities for the group to grow and consolidate in its chosen markets, which remain fragmented and offer attractive financial returns. Overall, our proven growth strategy together with our broad range of services and diversified client base gives us confidence of building on our strong track record. We expect to next update on current trading with our half year results, which are due to be released in December 2024.”
Coral Products Undergoes Re-organisation
Coral Products made a pre-tax loss of £947,000, but is undergoing a re-organisation that will “progressively deliver performance and margin improvement through innovation, simplification and efficiency” the company told the markets this morning.
The Wythenshawe headquartered plastics manufacturing business, which is AIM listed, saw turnover drop to £31.0 million (2023: £35.2 million), reflecting a challenging trading period in the second half of the financial year as well as the strategic exit of lower margin businesses which accounted for c. £2.5m of annualised sales.
Since Lance Burn was appointed CEO on 2 January 2024 the business has been re-organised into “Flexibles” and “Rigids”.
Chairman Joe Grimmond said: “These results reflect the more challenging trading environment which emerged in the second half of the financial year, which created caution amongst our customers and resulted in orders being deferred. In addition, we chose to divest of some £2.5 million lower margin business lines as part of the overall reset of the Group. A key part of which has been to reorganise the business under two new Divisions, each business retaining a high degree of autonomy and entrepreneurialism and establishing our four strategic pillars of growth for the long-term.”
Grimmond said the re-organisation has “enabled more efficient use” of the factory space, leading to recent asset sales. The company invested over £3 million in machinery and new manufacturing capabilities, the results of which he said are “coming through and will help drive performance over the next 18 months.”
Coral has also acquired 100% of the share capital of Ecotatou SL, a reseller/distributor in Spain, for a total consideration of €18,000 satisfied in cash. This acquisition gives the Group a foothold in Spain for the sale and distribution of Ecodeck Grids.
Northcoders Reports Profitability and Expansion
Tech training business Northcoders has seen revenue grow to £4.4 million (H1 2023: £3.5 million), an increase of 26%, slightly ahead of management expectations.
Chris Hill, Chief Executive Officer of Northcoders, said: “We are delighted to report that Northcoders has continued to build on its reputation as one of the UK’s leading technology training providers as we return to profitability. This highlights not only the momentum of our Training Bootcamps, reaching record registrations for yet another year, but also that the investments made in FY 2023 have successfully led to efficiencies throughout the business. The strength of Northcoders brand across the UK continues to grow, and as the breadth of our technology training continues to expand, such as our new Java and C# courses, we are confident in our ability to sustain this expansion. These courses are the languages usually adopted by large enterprises and are currently underserved or not serviced at all in our sector.
I am really pleased to see the rebrand and relaunch of the Corporate Solutions division has started to bear fruit as we win our first pilot contracts, and the pipeline of Counter™ contracts is building well. I am deeply grateful for the hard work and dedication of all the Northcoders team to enable this significant progress to be made.
As we move into the second half of the year, particularly as our revenue base begins to diversify, we are confident that we have built a solid platform to support further growth in the years ahead as we create life changing opportunities for individuals, help to close the UK’s digital skills gap and deliver for our shareholders.”
Franchise Brands Dividend Announcement
Franchise Brands plc (LON:FRAN - Get Free Report) announced a dividend on Tuesday, September 17th, Upcoming.Co.Uk reports. Stockholders of record on Thursday, October 3rd will be given a dividend of GBX 1.10 ($0.01) per share on Friday, November 1st. This represents a dividend yield of 0.69%. The ex-dividend date is Thursday, October 3rd. The official announcement can be accessed at this link: https://www.marketbeat.com/instant-alerts/lon-fran-dividend-announcement-2024-09-17/
Financial Highlights
The company has a current ratio of 1.30, a quick ratio of 1.57 and a debt-to-equity ratio of 44.11. The stock has a market cap of £312.93 million, a PE ratio of 8,140.00 and a beta of 0.82. The firm's fifty day moving average price is GBX 174.70 and its 200-day moving average price is GBX 177.95. Franchise Brands has a 1-year low of GBX 130 ($1.72) and a 1-year high of GBX 210 ($2.77).
In related news, insider Peter Kear acquired 57,500 shares of the stock in a transaction on Monday, July 29th. The stock was purchased at an average price of GBX 174 ($2.30) per share, for a total transaction of £100,050 ($132,166.45). Company insiders own 48.35% of the company's stock.
Business Overview
Franchise Brands plc, through its subsidiaries, engages in franchising and related activities in the United Kingdom and internationally. The company operates through B2B, Filta International, B2C, and Azura segments. It offers drain clearance solutions to commercial customers, including facilities management, construction, manufacturing, education, retail, insurance, water utilities, and public sectors under the Metro Rod name; emergency plumbing services under the Metro Plumb name; fryer management and grease, drain management, and cooking oil filtration services to restaurants, supermarkets, stadiums, healthcare, education, hotels, and amusement parks under the Filta name; and designs, installs, and services adoptable and non-adoptable pump stations under the Willow Pumps name.
Disclaimer
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