Franchise Brands (FRAN) , an international multi-brand franchise business, issued a trading update for the year ended December 31, 2023. With a market cap of £374m, FRAN has a combined network of 625 franchisees across 7 brands in 10 countries, covering the UK, North America and Europe. The group's focus is on B2B van-based reactive and planned services. It owns several brands with long trading histories, including Pirtek in Europe, Filta, Metro Rod, and Metro Plumb.
Further to the company's year-end trading update from January 18, 2024, FRAN issued an updated adjusted EBITDA guidance of £29.3-30.1m, at the top end of market expectations. At its upcoming AGM, FRAN will seek to approve a final dividend for the year of 10% to 2.2p/share (from 2.0p in FY22). Subject to approval, the final dividend will be paid on July 25, 2024 to shareholders on the register by June 28, 2024.
Previously on January 18, FRAN reported record trading and sales growth at its aforementioned divisions amid robust demand for their reactive services. The group's net debt was reduced to £74.8m on December 31, 2023 from £79.1m on June 20, 2023. Cash and cash eq was £12.0m. FRAN's acquisition of Pirtek in 2023 doubled the size of the group, after initially doubling in 2022 with the acquisition of Filta. The group's M&A have boosted its adjusted EBITDA from £8.5m in 2021 to £30m in 2023.
FRAN's primary focus in 2024 has been on integrating Pirtek. The group set a target leverage range of 1.0-1.5x adjusted EBITDA before it would consider further acquisitions of scale. Following the acquisition of Pirtek and subsequent increase in market cap, FRAN has had to overhaul its auditing policies to comply with regulations. As a result, the group's final results have been delayed to the week ending June 21, 2024.
Franchise Brands shares gained 2% on today's announcement.
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