Franchise Brands to put B2C division up for sale

9th Mar 2023 12:55

(Sharecast News) - AIM-listed Franchise Brands said on Thursday that it was putting its B2C division up for sale, as it posted better-than-expected full-year results.

In the 12 months to the end of December 2022, adjusted earnings before interest, taxes, depreciation and amortisation jumped 80% to £15.3m, while adjusted pre-tax profit was 98% higher at £12.8m. Revenue increased 72% to £99.2m and the company said this reflected record organic growth from the B2B division, complemented by the acquisition of Filta.

Basic earnings per share were up 54% on the previous year to 6.81p and Franchise lifted its total dividend for the year by 33% to 2p a share.

The company said Filta International delivered strong results, ahead of its expectations, driven by the full recovery in its key commercial customer sectors and the elevated price of cooking oil. It also hailed an "excellent" performance from the newly-created B2B division, with revenue up 34%.

Meanwhile, Metro Rod and Metro Plumb system sales grew 19% to a record £60m.

The company also announced that it has decided to put its B2C division up for sale after a strategic review found there are greater opportunities for the group for organic, acquisitive and international growth within the B2B franchise sector.

Executive Stephen Hemsley said: "The excellent momentum in the B2B businesses has continued in 2023 to date, as we capture the defensive growth opportunities afforded by the group's mostly essential services, strong leadership positions in its chosen markets, and reputation for high quality, reliable services among its diversified client base.

"We look forward with confidence to expanding the business organically and by seeking further earnings-enhancing acquisitions. We have clear opportunities to grow our franchise businesses through further investment in sales and marketing, supporting franchisees to expand their services, and leveraging efficiency-enhancing technology. In addition, our focus on B2B franchise businesses provides a strong platform from which to seek selective acquisitions of van-based businesses that provide essential services, as we seek to expand our international footprint."

At 1355 GMT, the shares were up 9.5% at 230p.