- Record system sales and profit
- Executive chair role split
- Main market listing being considered
Multi-brand franchisor Franchise Brands (FRAN:AIM) revealed record system sales and adjusted profits for 2024 despite ongoing macroeconomic headwinds, demonstrating the resilience of the group.
The shares rallied 2.6p or 2% to 139.6p and sit roughly a fifth below where they traded 12 months ago.
Executive Chair Stephen Hemsley commented: ‘Our essential services and diverse geographies provide a resilient base from which we are driving opportunities through our “One Franchise Brands” strategic initiative, whilst growing our small share of large, fragmented, markets to position us well for recovery in our markets.
‘As we accelerate the pace of integration of the group’s businesses, we will drive operational gearing by maximising sales opportunities whilst leveraging an efficient structure, on an enhanced IT platform.
‘We are confident that we have the strengthened leadership team in place to unlock the significant opportunities ahead.’
SEPARATION OF RESPONSIBILITIES
Peter Molloy, CEO of the group’s waste and water division, was appointed to the board in October into the new role of group chief executive and becomes responsible for the day to day running of the business and implementing strategy.
Stephen Hemsley will focus on strategic and corporate development, including group finance and acquisitions. ‘The timing was right for the appointment of a CEO to separate my responsibilities and provide greater focus on the strategic and commercial development of the business to support our ambitious growth plans,’ explained Hemsley.
The company has also made several new appointments to strengthen the group’s leadership team. While at an early stage, the board is considering moving from AIM to a main market listing.
RECORD 2024
System sales increased by 20% to £418.5 million, mainly driven by the acquisition of Pirtek Europe in April 2023. Like-for-like system sales were up 4%.
Adjusted EBITDA (earnings before interest, tax, depreciation, and amortisation) increased 16% to a record £35.1 million, equating to a margin on system sales of 8.4%. Like-for-like EDITDA was flat.
Reported revenue grew 15% to £139.2 million and pre-tax profit grew 8% to £21.3 million. The cash generative nature of the franchise model allowed the company to reduce net debt to £65 million from £74.7 million representing a net debt to EBITDA ratio of 1.9 times.
Looking ahead, the group’s focus is on continued deleveraging and integrating the Pirtek business to drive operational efficiencies. Franchise Brands said it is ‘optimistic’ of meeting 2025 market expectations for sales and EBITDA, which respectively sit at £151 million and £39.7 million.
