Franchise Brands Plc · LSE:FRAN
Franchise Brands — Investor Presentation (April 2020)
17 slides from Franchise Brands's investor presentation, April 2020
Slide 1: Franchise Brands Presentation April 2020
B FRANCHISE BRANDS BUSINESS byustders PRESENTATION APRIL 2020
Slide 2: Agenda
02 12 Introduction to Franchise Debtor position Brands 13 03 Current financial At a glance position 04 14 Q1 2020 performance Summary and outlook 05 Business update 10 COVID-19 actions taken 1 FRANCHISE BRANDS PLC: PRESENTATION
Slide 3: An Introduction to Franchise Brands plc
AN INTRODUCTION TO FRANCHISE BRANDS PLC • Established in 2008 by Stephen Hemsley (Executive Chairman) and Nigel Wray (Non-executive Director). • Focused on building market-leading businesses in selected customer segments using primarily a franchise model. • The Group currently has a combined network
Slide 4: Franchise Brands: At a Glance as at 31 December 2019
FRANCHISE BRANDS: AT A GLANCE AS AT 31 DECEMBER 2019 B2B B2C Founded in 1983, commercial drainage specialist Founded in 1997, Willow Pumps is a leading ChipsAway, Ovenclean and Barking Mad Metro Rod provides a range of drain clearance, pump supply, installation and servicing business, each provide a
Slide 5: A Strong Performance in 2019 Driven by Accelerating Metro Rod System Sales and Acquisition
A STRONG PERFORMANCE IN 2019 DRIVEN BY ACCELERATING METRO ROD SYSTEM SALES AND ACQUISITION OF WILLOW PUMPS 2019 FINANCIAL HIGHLIGHTS OPERATIONAL HIGHLIGHTS • Metro Rod’s Vision 2023 strategy REVENUE ADJUSTED EBITDA* PROFIT BEFORE TAX continues to drive our organic growth. +24% +29% +14% • Metro Rod’
Slide 6: The Business Has Experienced Significant Year-on-Year Growth in Q1 2020
THE BUSINESS HAS EXPERIENCED SIGNIFICANT YEAR-ON-YEAR GROWTH IN Q1 2020 • Q1 trading was strong, with Group EBITDA up 27% on 2019, despite the last 2-3 weeks of March being impacted by the crisis. • EBITDA in the B2B division was 42% up on 2019 as a result of a strong performance at Metro Rod (29% a
Slide 7: Most of the Services in Our B2B Division Designated Essential by the Government
MOST OF THE SERVICES IN OUR B2B DIVISION HAVE BEEN DESIGNATED BY THE GOVERNMENT AS ESSENTIAL FRANCHISE BRANDS PLC: PRESENTATION 6
Slide 8: Impact of COVID-19 on Metro Rod and Metro Plumb
IMPACT OF COVID-19 ON METRO ROD AND METRO PLUMB • A franchise business, so direct labour employed by franchisees. • The costs we control are at the Support Centre, where the principal costs are payroll, IT and premises costs. • High level of reactive work which is resilient, but commercial premises
Slide 9: Impact of COVID-19 on Willow Pumps
IMPACT OF COVID-19 ON WILLOW PUMPS • Business acquired in October 2019 • A direct labour business so full control of all costs. • Value of reactive and emergency repair/replacement work currently at around 2019 levels which is around 60% of budget given the growth previously forecast. • Supply and i
Slide 10: Impact of COVID-19 on the B2C Division
IMPACT OF COVID-19 ON THE B2C DIVISION • Virtually no activity by ChipsAway, Ovenclean and Barking Mad franchisees therefore turnover-based payments ceased. • Fixed monthly payments by franchisees reduced to around one-third of normal. • Suspended National Advertising Fund and most other monthly fee
Slide 11: Actions Taken to Reduce Costs
ACTIONS TAKEN TO REDUCE COSTS FURLOUGHED STAFF & PAY CUTS % overall Number of cost savings furloughed from staff /total furlough and staff pay cuts • Total savings of 45% from 121 furloughed staff and pay cuts. Metro Rod 54/151 39% • Staff salary cuts of up to 20%. Willow Pumps 42/104 40% • The Boar
Slide 12: Actions Taken to Preserve Cash and Strengthen Liquidity
ACTIONS TAKEN TO PRESERVE CASH AND STRENGTHEN LIQUIDITY • Substantial furloughing and pay cuts of staff. • Dividend to be taken as scrip by Board and larger shareholders. • Deferment of payments to HMRC: • VAT for quarter ending 31 March 2020. • April and May PAYE & NI. • Deferment of rent and rent
Slide 13: Debtor Provision
DEBTOR PROVISION • Except for the collapse of Carillion, Metro Rod and Willow Pumps Gross both have a low history of bad debt. However, given the exceptional Balance Provision Net Provision nature of the current situation, it is prudent to provide for a number of Type of customer category (£’000) %
Slide 14: Current Financial Position
CURRENT FINANCIAL POSITION 31 Mar 31 Dec 2020 2019 £’000 £’000 Change • During Q1 Metro Rod has needed to invest a further £0.2m in working capital as a Bank term loan (6,113) (6,401) 288 result of a 19% increase in system sales (Q1 2020 v Q1 2019). RCF (£5m limit) (3,432) (3,002) (430) • A further
Slide 15: Summary & Outlook
SUMMARY & OUTLOOK • Significant year-on-year growth in Q1 despite impact of crisis in last 2-3 weeks of March. • Swift action taken to reduce costs to match anticipated income which should allow the Group to generate a much reduced, but positive Adjusted EBITDA, through the crisis period. • A strong
Slide 16: Disclaimer
DISCLAIMER The information contained in this document (“Presentation”) has been prepared by Franchise Brands plc (the “Company”). Franchise Brands plc is a UK company quoted on AIM, a market operated by London Stock Exchange plc. This Presentation has not been fully verified and is subject to materi
Slide 17: Contact details
www.franchisebrands.co.uk www.metrorod.co.uk www.metrorod.co.uk www.willowpumps.co.uk @FB_PLC @MetroRodUK @MetroPlumbUK @WillowPumps Franchise Brands plc Ashwood Court Tytherington Business Park Macclesfield SK10 2XF mail@franchisebrands.co.uk www.chipsaway.co.uk www.ovenclean.com www.barkingmad.uk.
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