Strong Q1 for Franchise Brands and £14m fund raising provides the platform for further acquisitions
Following a strong Q1 for the multi-brand franchise business, and a successful placing to raise £14 million of new equity, Franchise Brands plc is well placed to invest in further acquisitions and growth opportunities as they arise.
Franchise Brands started the year with strong underlying trading from both its B2B and B2C divisions. Despite the last 2-3 weeks of March being impacted by the COVID-19 crisis, the business experienced significant year-on-year growth in Q1 2020, with Adjusted EBITDA up 27% on Q1 2019. The success in Q1 comes off the back of significant investment in its existing franchise businesses and the acquisition of Willow Pumps in October 2019.
Franchise Brands announced it has successfully raised £14 million through a placing of new shares, which included an investment by the Directors and senior management. These funds will strengthen the Group’s balance sheet, provide additional working capital, and position the multi-brand franchise business to explore new opportunities as they arise, in particular acquisitions.
Franchise Brands is interested in acquiring new businesses to further expand the range of services that its B2B brands of Metro Rod, Metro Plumb and Willow Pumps can offer, in support of the ambition to offer a full “Water in. Waste out.” drainage, pumps, and plumbing service.
In the B2C division, which includes ChipsAway, Ovenclean and Barking Mad, acquisitions which enable Franchise Brands to leverage its existing structure and shared support services such as franchise recruitment, marketing, finance and technology are also of considerable interest.
Stephen Hemsley, Executive Chairman of Franchise Brands, commented:
“The Group had strong momentum ahead of the COVID-19 crisis, with Q1 trading showing significant growth on the prior year and a continuation of the accelerating rate of sales growth in its B2B division in particular. We have taken all the necessary actions to enable us to trade through this current uncertain period profitably, albeit at a significantly lower level”.
“We see considerable opportunity across our businesses and the Placing will ensure that we are very well-positioned to capitalise on external growth opportunities as we emerge from the COVID-19 crisis.”
