London-listed Franchise Brands (AIM:FRAN)  said it had seen 'a strong performance' in 2019 driven by accelerated system sales for its Metro Rod business and its acquisition of Willow Pumps.

The multi-franchise business reported a 29% increase in adjusted underlying earnings (EBITDA) to £5.2m from £4m for the year ended 31 December 2019 whilst revenue increased by 24% to £44m from £18.1m.

Adjusted net debt rose to £9.2m, up from £5m, after the group’s initial £4m cash consideration for its acquisition of leading pump supply, Willow Pumps in October 2019.

Franchise acquired Willow Pumps with the intention of expanding Metro Rod, its existing drain care and repair business -- it has since exceeded trading expectations during the first three months of ownership.

Meanwhile, the group’s Metro Rod business, which the company acquired in April 2017, saw its system sales growth accelerated to 14% in 2019, compared to 8% in 2018.

Shares in Franchise Brands were trading 6.37% higher at 133.5p during Thursday trading.

"2019 has seen us successfully build the business both organically and by acquisition,” said Stephen Hemsley, Executive Chairman of Franchise Brands.

He added, "Trading in 2020 has started well, with job intake at Metro Rod, Metro Plumb and Willow Pumps up on the same period in 2019 and a strong start to the year for franchisee recruitment in the B2C division.”

Broker Allenby said it would maintain its FY2020 forecasts which projects an adjusted EBITDA growth of 44% and adjusted EPS growth of 39% following on from a ‘highly successful’ 2019.

In a research note following the release of this morning’s results, Allenby raised fair value of 145p to 165p a share on Franchise Brands to reflect its new projections for FY2021 which it said recognised the strong growth in earnings and cash generation already achieved.

"Overall, we look forward to 2020 with considerable confidence given the Group's strong start to the current year and the clear opportunities for growth we see across both our B2B and B2C divisions," added Hemsley.

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