REG - Franchise Brands PLC - Final Results
27/03/2025 07:15
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RNS Number : 4019C Franchise Brands PLC 27 March 2025
27 March 2025
FRANCHISE BRANDS PLC
("Franchise Brands", the "Group" or the "Company")
Final results for the year ended 31 December 2024
Key divisions achieved record System sales despite challenging environment
Full-year Adjusted EBITDA(2) in line with current market expectations
Franchise Brands plc (AIM: FRAN), an international multi-brand franchise
business, is pleased to announce its audited results for the year ended 31
December 2024.
Financial highlights
· System sales increased by 20% to £418.5m (2023: £350.1m).
· Statutory revenue increased by 15% to £139.2m (2023: £121.0m(1)).
· Adjusted EBITDA(2) increased by 16% to £35.1m (2023: £30.2m(1)).
· Adjusted profit before tax increased 8% to £21.3m (2023:
£19.7m(1)).
· Profit before tax increased 86% to £9.2m (2023: £5.0m(1)).
· Adjusted EPS(3) increased by 2% to 8.59p (2023: 8.39p(1)).
· Basic EPS increased by 119% to 3.78p (2023: 1.73p(1)).
· Adjusted net debt(4) reduced to £65.1m at 31 December 2024 (31 December
2023: £74.7m), representing reduced leverage of 1.9x(5) (31 December 2023:
2.5x).
· Cash conversion rate increased to 94% (2023: 80%) demonstrating the
strong cashflow performance of the Group's franchise businesses.
· Final dividend of 1.3p per share proposed (2023: 1.2p) an increase of
8%, giving an increase in the total dividend for the year of 9% to 2.4p per
share (2023: 2.2p).
Operational highlights
A creditable performance as we accelerate integration, and a strengthened team
in place to drive the execution of the Group's strategy.
· Resilient underlying demand for the Group's essential services
resulted in record System sales in all key divisions despite challenging
macroeconomic conditions.
· Launch of the One Franchise Brands strategic initiative to accelerate
the integration of the Group into a unified, connected business with the
objective of enhancing sales, creating an efficient overhead structure and
driving operational gearing.
· Appointment of CEO (a new role) and separation of responsibilities
with Executive Chairman.
· New appointments (including post year-end) of CFO, COO, Group FD and
independent Non-executive Director to strengthen the Group's leadership team
and Board.
Outlook
· Resilient demand for essential reactive services. Discretionary spend
remains held-back in subdued markets, similar to the latter part of 2024.
· Well placed to benefit from the expected pick up in discretionary
spend in several international markets, although the timing of this remains
uncertain.
· Controlling the controllables by spending smartly, driving cost
efficiencies and creating an efficient overhead structure operating on a
single, secure and effective IT platform.
· Deleveraging a strategic priority: strong cash generation expected to
enable leverage to be below 1.5x by 31 December 2025.
· The realisation of Group-wide efficiencies for the full year and the
anticipated pick up in higher value work expected in certain markets allows us
to remain optimistic that a performance in line with current market
expectations for the year ending 31 December 2025(6) is achievable.
(1)The results include a number of prior year adjustments which are set out
in Note 1 in the Annual Report & Accounts, the overall of which is to
reduce Adjusted EBITDA in the year ended 31 December 2023 by £0.1m.
(2)Adjusted EBITDA is earnings before interest, tax, depreciation,
amortisation, exchange differences, share-based payment expense and
non-recurring items.
(3)Adjusted EPS is earnings per share before amortisation of acquired
intangibles, share-based payment expense, exchange differences and
non-recurring items.
(4)Adjusted net debt is the key debt measure used for testing bank covenants
and excludes debt of £10m on right-of-use assets.
(5)Leverage is calculated using Adjusted net debt at 31 December 2024 of
£65.1m and Adjusted EBITDA for the financial year ended 31 December 2024 of
£35.1m.
(6)Range of current market expectations for the financial year ending 31
December 2025 are: Revenue of £145.2m to £157.0m; Adjusted EBITDA of £39.3m
to £40.0m and Adjusted EPS from 10.34p to 10.70p.
Stephen Hemsley, Executive Chairman, commented:
"The Group achieved record System sales in all key divisions and a creditable
Adjusted EBITDA outturn for the year, despite ongoing challenging
macroeconomic conditions in many of our key markets. This is a testament to
the strength and resilience of the Franchise Brands business model and
international diversification of our market-leading brands.
"Our essential services and diverse geographies provide a resilient base from
which we are driving opportunities through our 'One Franchise Brands'
strategic initiative, whilst growing our small share of large, fragmented,
markets to position us well for recovery in our markets.
"As we accelerate the pace of integration of the Group's businesses, we will
drive operational gearing by maximising sales opportunities whilst leveraging
an efficient structure, on an enhanced IT platform. We are confident that we
have the strengthened leadership team in place to unlock the significant
opportunities ahead."
Enquiries:
Franchise Brands plc + 44 (0) 1625 813231
Stephen Hemsley, Executive Chairman
Peter Molloy, CEO
Andrew Mallows, CFO
Julia Choudhury, Corporate Development Director
Stifel Nicolaus Europe Limited (Nominated Adviser and Joint Broker) +44 (0) 20 7710 7600
Matthew Blawat
Nick Harland
Allenby Capital Limited (Joint Broker) +44 (0) 20 3328 5656
Jeremy Porter / Daniel Dearden-Williams (Corporate Finance)
Amrit Nahal / Joscelin Pinnington (Sales & Corporate Broking)
Dowgate Capital Limited (Joint Broker) +44 (0) 20 3903 7715
James Serjeant (Corporate Broking)
Malar Velaigam / Colin Climie (Sales)
MHP Group (Financial PR) +44 (0) 20 3128 8100
Katie Hunt / Hugo Harris +44 (0) 7884 494112
franchisebrands@mhpgroup.com
About Franchise Brands plc
Franchise Brands is an international, multi-brand franchisor focused on B2B
van-based service with seven franchise brands and a presence in 10 countries
across the UK, North America and Europe. The Group is focused on building
market-leading businesses primarily via a franchise model and has a combined
network of over 600 franchisees.
The Company owns several market-leading brands with long trading histories,
including Pirtek in Europe, Filta, Metro Rod and Metro Plumb, all of which
benefit from the Group's central support services, particularly technology,
marketing, and finance. At the heart of Franchise Brands' business-building
strategy is helping its franchisees grow their businesses: "as they grow, we
grow".
Franchise Brands employs almost 650 people across the Group and there are over
3,000 people in the franchise community.
For further information, visit www.franchisebrands.co.uk
(https://protect.checkpoint.com/v2/r06/___http:/www.franchisebrands.co.uk___.ZXV3MjpuZXh0MTU6YzpvOmNiOGI0NmY1YTVlZjM2Njc3MGYzYWJjZDcxY2EyNGFlOjc6ZDhhMjpjZjU3YTQyYjliYmZmZGQ2MTAyNzdjNGQ4Y2FkNWM2MjZjMDMxMjlkZDZjZDlhZTkxYWFkZTkzZGNiNWI2ODUyOnA6RjpU)
CHAIRMAN'S STATEMENT
Introduction
2024 saw resilient underlying demand for the Group's essential reactive and
planned services, resulting in record system sales in all key divisions, in
challenging macroeconomic conditions in most key markets. Against this
background, we focused on what we could control, maintaining a strong emphasis
on cost management, supporting a creditable outturn for the year, with
Adjusted EBITDA of £35.1m.
The integration of the businesses acquired over the previous three years is
progressing well. Our new CEO, Peter Molloy, is providing new focus and is
connecting the Group through the launch of the One Franchise Brands initiative
to accelerate the pace of integrating the Group to enhance sales, create an
efficient overhead structure and drive operational gearing.
The cash-generative nature of our predominantly franchised business has
allowed us to reduce Adjusted net debt from £74.7m to £65.1m and leverage
from 2.5x to 1.9x times Adjusted EBITDA, which was in line with management's
expectations and comfortably within our banking covenants.
Overview
A particular highlight of trading in 2024 was the record system sales achieved
in the Pirtek, Water & Waste Services and Filta International divisions.
System sales were particularly strong in the US, helped by robust economic
growth, while the rate of growth in the UK and most European markets was more
moderated than in previous years.
Lower European economic growth marginally impacted demand for reactive
services in certain sectors, such as construction and plant hire, as equipment
was not being as intensively used. There was a more significant slowdown in
preventative maintenance and project work where, in certain sectors, larger
projects were held back. The contrast between the performance of the US and UK
and European businesses suggests that our geographic diversification strategy,
including the acquisition of Filta, has helped to balance regional variations
in market conditions.
Appointment of new CEO and separation of responsibilities with Executive
Chairman
In October, the Group announced the appointment of Peter Molloy, CEO of the
Water & Waste Services division, to the new role as CEO, and as a Director
on the Board of the Company. The Group has grown rapidly over the past two
years and had reached a scale where the timing was right for the appointment
of a CEO to separate my responsibilities and provide greater focus on the
strategic and commercial development of the business to support our ambitious
growth plans.
As CEO, Peter Molloy is responsible for the day-to-day leadership of the
Group across its four principal divisions and shared central functions, and
will drive the implementation of the strategy, business performance and
accelerate integration. As Executive Chairman, my focus is on the strategic
and corporate development of the Company, including Group finance and future
acquisitions.
Peter has been a key part of the Franchise Brands team since 2017 and has
made an exceptional contribution in leading the substantial growth of Metro
Rod and in the successful formation and integration of the Water & Waste
Services division. The Board is confident that he will successfully drive the
implementation of our strategic priorities, which includes an increased focus
on digitally-enabled integration through One Franchise Brands, enabling the
Group to realise its significant growth potential.
Management team
We have also recently announced a number of new appointments to strengthen the
Group's leadership team and drive the execution of our strategy.
In June 2024, Mark Boxall joined us as Chief Operating Officer, a newly
created position on the Group's Management Board. Mark was previously Chief
Operating Officer at D4t4 Solutions plc (now Celebrus Technologies plc), a
software and data platform provider. Mark is driving integration across the
Group, with a particular focus in the short term on the rollout of
standardised Group-wide IT systems, managed centrally.
Post year-end, we developed a new finance structure following Peter's
appointment as CEO and the launch of the One Franchise Brands strategic
initiative. Having conducted a comprehensive search for a new CFO in Q4 2024,
the Board concluded that an enhanced finance team providing both commercial
and financial support was the optimal structure to meet the needs of the
business in this focused period of integration. We therefore combined the
roles of CFO and Commercial Director under the role of the CFO and created a
new non-Board position of Group Finance Director.
Andrew Mallows, our interim CFO, was appointed CFO on a permanent basis,
reflecting his experience as CFO and Commercial Director in the eight years he
has been with the business. Beth Peace, who has been with the business since
2019 and was a Finance Director in the Water & Waste Services division,
was appointed Group Finance Director. The new finance team is working
closely with Peter Molloy and Mark Boxall to deliver the One Franchise Brands
strategy.
Board
Post year-end, we were pleased to welcome Louise George who has joined the
board as an independent Non-Executive Director. She was also appointed as
Chair of the Audit Committee and a member of the Nomination and Remuneration
Committees.
Louise is a highly experienced CFO with over 20 years' board-level experience
with AIM-quoted companies including substantial experience of franchised
businesses. With the appointment of Louise, the plc Board now comprises three
Executive Directors, and four non-Executive Directors, of whom three are
considered by the Board to be independent. Louise will also be supporting the
strengthened Group finance team.
Capital allocation
The Group's clear strategic focus is to accelerate the pace of integration,
drive operational gearing and deleverage. The Board does not anticipate making
any further significant acquisitions until the outstanding debt is
substantially repaid which we now expect to be in 2028. The Board may also
consider the disposal of non-core businesses and non-franchise activities
which no longer support the growth of the franchise businesses, which would
accelerate de-leveraging. Capital allocation decisions will balance debt
reduction, maintaining a progressive dividend policy and investment in the
organic expansion of the Group.
In October 2024, we announced that our Employee Benefit Trust ("EBT") would
restart its share purchase programme up to an aggregate value of £5,000,000.
This programme aims to mitigate the dilutive impact of share option awards and
improve overall shareholder return. As the rate of our deleveraging
accelerates, we hope to announce a regular and consistent share purchase
programme.
Dividend
The Board is pleased to propose a final dividend of 1.3 pence per share (2023:
1.2 pence per share), giving a total dividend for the year of 2.4p (2023:
2.2p), an increase of 9%. Subject to shareholder approval at the AGM on 7
May 2025, the final dividend will be paid on 23 May 2025 to those shareholders
on the register at the close of business on 9 May 2025.
Consideration of Main Market Listing
Given the scale and growth ambitions of the Group, in 2024 the Board started
to consider moving its share quote from the AIM market to the Official List
and Main Market of the London Stock Exchange. These considerations remain at
an early stage and the Board will make appropriate announcements in due
course.
Outlook
With a resilient and geographically diversified base, we are well positioned
to manage and mitigate macroeconomic and political uncertainty affecting our
customers in many of our markets. We also remain focused on the
opportunities and factors within our control.
The underlying demand for our essential services remains strong, albeit it
continues to be subdued in a range of sectors which are experiencing lower
activity levels, including construction and plant hire. This is leading to
current trading remaining constrained, similar to the latter part of 2024.
While we expect continued resilient demand for our essential reactive
services, project work and discretionary spending will continue to be held
back until demand recovers in key markets.
To further increase our resilience and reduce our dependence on cyclical
markets, we have embarked on a strategy to open up new and under-represented
growth sectors in each of our businesses. Our geographic diversification
strategy, including having Filta International, a business of scale in the US,
will also help to balance regional variations in market conditions.
Our clear focus in 2025 is to accelerate the pace of the integration of all
the Group's businesses following a period of rapid expansion. Our aim is to
create one connected group with an efficient overhead structure, operating on
a secure and effective IT platform, that enhances System sales through
maximising Group-wide sales opportunities, including cross selling and driving
Group-wide efficiencies. The 'One Franchise Brands' strategic initiative is
key to unlocking and maximising these opportunities.
With the realisation of Group-wide efficiencies for the full year and the
anticipated pick-up in higher value work expected in certain markets, we
remain optimistic that the current market expectation range for the financial
year ending 31 December 2025 is achievable.
Reducing leverage remains a strategic priority. Together with the tailwind we
anticipate from continuing reductions in interest rates, this should allow us
to drive earnings per share at a faster pace than over the last couple of
years. With no acquisitions planned and limited capital expenditure, we expect
to generate a strong cash flow, which will be used to reduce debt, continue
our progressive dividend policy and restart a regular share purchase
programme. We expect year-end leverage to be below 1.5x Adjusted EBITDA.
Conclusion
The record System sales achieved in 2024 are a testament to the resilience of
our underlying businesses, our experienced management teams, our
entrepreneurial franchisees and our dedicated Support Centre teams and I would
like to personally thank them for this excellent achievement.
Notwithstanding the economic and political uncertainties facing us in many
markets in 2025, under the leadership of our new CEO, Peter Molloy and our
strengthened Board and management team, I look forward to 2025 with cautious
optimism.
Stephen Hemsley
Executive Chairman
26 March 2025
OPERATIONAL REVIEW
I am pleased to be providing my first Operational Review since being appointed
CEO in October 2024 and for more of an introduction, please click on the link.
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The focus of my Operational Review is the financial and business performance
from System sales to Adjusted EBITDA.
Divisional performance
The Group's results for the year ended 31 December 2024 comprise a full-year
contribution from all divisions. The comparative results for the prior year
include just over eight months of contribution from Pirtek, which was acquired
on 20 April 2023. Where reference is made to like-for-like or proforma
results, this will compare 2024 with 2023 as if Pirtek had been owned for the
full 2023 year.
The Group's divisional trading results may be summarised as follows:
Year to 31 December 2024:
Pirtek Water & Waste Services Filta B2C Azura Inter- company elimination
Intl 2024
£'000 £'000 £'000 £'000 £'000 £'000 £'000
System sales 183,582 110,270 97,826 25,972 808 418,458
Statutory revenue 63,913 46,054 25,597 5,752 808 (2,918) 139,206
Cost of sales (22,010) (19,661) (15,691) (1,001) (0) 2,476 (55,887)
Gross profit 41,903 26,393 9,906 4,751 808 (442) 83,319
GP% 66% 57% 39% 83% 100% 15% 60%
Administrative expenses (21,978) (15,282) (3,913) (2,546) (764) 442 (44,041)
Divisional EBITDA 19,925 11,111 5,993 2,205 44 - 39,278
Group Overheads - - - - - - (4,157)
Adjusted EBITDA - - - - - - 35,121
Adjusted EBITDA/ 8.4%
System sales
Year to 31 December 2023:
Pirtek Water & Waste Services Filta Int'l B2C Azura Inter-company elimination 2023
£'000 £'000 £'000 £'000 £'000 £'000 £'000
System sales 125,976 106,661 90,482 26,189 745 350,053
Statutory revenue 43,774 46,807 27,117 6,106 745 (3,530) 121,019
Cost of sales (16,174) (21,247) (17,349) (1,207) (0) 3,187 (52,790)
Gross profit 27,600 25,560 9,768 4,899 745 (343) 68,229
GP% 63% 55% 36% 80% 100% 10% 56%
Administrative expenses (14,097) (14,690) (3,671) (2,583) (531) 343 (35,229)
Divisional EBITDA 13,503 10,870 6,097 2,316 214 - 33,000
Group Overheads - - - - - - (2,847)
Adjusted EBITDA - - - - - - 30,153
Adjusted EBITDA/ 8.6%
System sales
System sales are a KPI of the Group and are considered a good indicator of
Group performance as it allows total sales to end customers to be visible on a
comparable basis across all businesses within the Group as they comprise the
underlying sales of our franchisees and the statutory revenue of our Direct
Labour Operations ("DLO"). System sales increased by 20% to £418.5m in the
period (2023: £350.1m), and by 4% on a like-for-like basis. Although the rate
of System sales growth was slower in 2024 than in previous years, it still
represents a record performance for the three B2B divisions (Pirtek, Water
& Waste Services division and Filta International).
Statutory revenue increased by 15% to £139.2m (2023: £121.0m). On a
like-for-like basis, statutory revenue was flat. Statutory revenue comprises
many different types of revenue on different basis and is not a KPI used in
the operational management of the Group.
Adjusted EBITDA, which is the main KPI of the business, increased 16% to a
record £35.1m (2023: £30.2m). On a like-for-like basis, Adjusted EBITDA was
flat. Overall, the Adjusted EBITDA to System sales ratio, another important
KPI as it indicates the progress we are making driving operational gearing,
reduced marginally to 8.4% (2023: 8.6%). This resulted from several
exceptional factors, including the significantly lower price of used cooking
oil ("UCO") and the exchange rates at which local currency results were
translated into sterling. Where constant exchange rates were used, and the
2023 price of UCO maintained, Adjusted EBITDA to System sales would have
increased to 8.7%, demonstrating continued progress.
Pirtek Europe
Pirtek operates in eight European countries: the UK and Ireland, Germany and
Austria, the Netherlands and Belgium (Benelux), and France and Sweden. In the
major markets of the UK and Ireland, Germany and Austria, and Benelux, the
business is mostly franchised, whereas the operations in the early-stage
markets of France and Sweden are corporately operated. The franchised
operations account for 94% of divisional Adjusted EBITDA.
The sterling results in 2024, the comparative eight months in 2023, and the
proforma 12 months results, may be summarised as follows:
2024 2023 2023 Actual Proforma
Pirtek Actual Actual Proforma Change Change
£'000 £'000 £'000 % %
System sales 183,582 125,976 180,168 46% 2%
Statutory revenue 63,913 43,774 62,618 46% 2%
Cost of sales (22,010) (16,174) (20,125) 36% 9%
Gross profit 41,903 27,600 42,493 52% (1%)
GM% 66% 63% 68% 3% (2%)
Administrative expenses (21,978) (14,097) (24,028) 56% (9%)
Adjusted EBITDA 19,925 13,503 18,465 48% 8%
Adjusted EBITDA/System sales 10.9% 10.7% 10.2%
Actual performance from an 8-month contribution in 2023
Proforma assuming a full year contribution in 2023
The Pirtek Europe division generated total System sales of £183.6m, an
increase of 46% (2023: 8 months: £126.0m). On a like-for-like basis, System
sales grew by 2% (2023 full year: £180.2m).
The underlying local currency like-for-like System sales growth may be
analysed as follows:
2024 2023 2023 Actual Proforma
System sales Actual Actual Proforma Change Change
Local Currency Local Currency Local Currency % %
UK GBP 81,931 55,769 80,039 47% 2%
Germany & Austria € 79,352 53,909 76,779 47% 3%
Benelux € 28,542 19,007 26,431 50% 8%
France € 9,201 6,292 8,902 46% 3%
Sweden SEK 36,482 24,962 37,190 46% (2%)
Actual performance from an 8-month contribution in 2023
Proforma assuming a full-year contribution in 2023
Pirtek's record system sales reflected a like-for-like increase of 2% in the
UK & Ireland and 4% in the Continental European markets, in local
currency. This reflected continued good demand for essential reactive
services in most sectors despite continued subdued demand for project work and
discretionary spending in most of the eight countries in which Pirtek
operates.
In the UK there was a slowdown in the construction and plant hire sectors in
particular, whilst in Germany activity was impacted by a significant slowdown
in the manufacturing sector. Benelux, France and Sweden faced similar
headwinds to the UK and Germany.
However, despite the subdued market, the UK and Ireland (which account for 45%
of System sales) achieved record system sales with the business demonstrating
a high level of resilience in terms of customer retention. It has also been
reducing its sector dependency by targeting waste management, rail,
manufacturing and maintenance, repair & operations. Technical sales
experienced good growth, driven by an increase in smaller, recurring works.
Germany and Austria (which account for 37% of System sales) also grew to
record levels of System sales and diversified by targeting under-represented
sectors, particularly waste management and food and beverage. Austria saw good
growth of 13% although it remains an early-stage market.
Benelux (which accounts for 13% of System sales) achieved 8% growth in system
sales in local currency, as it was quick to successfully diversify into
markets such as waste management and marine, had good growth in Total Hose
Management (+16%), and undertook a number of major projects for customers in
the marine, offshore contracting, elevator & escalator, and equipment
rental sectors.
The performance of the early-stage DLO operations of France and Sweden (which
account for 5% of System sales) was disappointing, with sales volumes failing
to materialise. In France, our geographic expansion had limited traction as
customers minimised discretionary spend and competitor activity increased.
Sweden's sales performance was held back albeit progress was made in reducing
its sector dependency. The fixed cost base of these DLOs is more difficult to
adjust when sales are reduced, which does serve to highlight the benefits of
our predominantly franchised model.
Adjusted EBITDA on a country basis and the like-for-like comparison may be
summarised as follows:
2024 2023 2023 Actual Proforma
Adjusted EBITDA Actual Actual Proforma Change Change
£ £'000 £'000 £'000 % %
UK & Ireland 10,098 6,872 9,678 47% 4%
Germany & Austria 6,212 4,271 6,048 45% 3%
Benelux 3,942 2,632 3,648 50% 8%
France 177 165 (82) 7% 316%
Sweden 313 301 460 4% (32%)
Divisional overheads (817) (738) (1,338) (11%) 39%
Total 19,925 13,503 18,415 48% 8%
Overall, Adjusted EBITDA increased by 48% to £19.9m (2023: £13.5m) and 8% on
a like-for-like basis, which is considered a satisfactory performance in
challenging market conditions.
The ratio of Adjusted EBITDA to System sales increased to 10.9% from 10.2% on
a like-for-like basis, which was driven by the elimination of the losses in
Austria and France and the reduction in divisional overheads resulting from
integrating Pirtek into the Group.
The underlying performance of each country in local currency and on a
like-for-like basis can be analysed as follows:
2024 2023 2023 Actual Proforma
Adjusted EBITDA Actual Actual Proforma Change Change
Local currencies % %
UK GBP 10,098 6,872 9,678 47% 4%
Germany & Austria € 7,341 4,886 6,972 50% 5%
Benelux € 4,666 3,034 4,208 54% 11%
France € 206 192 (94) 7% 319%
Sweden SEK 4,240 4,020 6,078 5% (30%)
Group overheads GBP (817) (738) (1,338) (11%) (39%)
In our larger businesses, in local currency, Adjusted EBITDA in Germany and
Austria, on a proforma basis, increased by 5% and in Benelux by a creditable
11%.
Pirtek has a significant opportunity to expand into eight additional European
countries under the terms of its master licence agreement, which gives it
perpetual, royalty-free use of the brand in 16 European countries in total.
However, our priority is to achieve improved profitability in the early-stage
markets of Sweden, France and Austria before developing new markets.
Water & Waste Services division
The results of the Water & Waste Services division may be summarised as
follows:
Metro Rod Willow Pumps Filta UK 2024 Metro Rod Willow Pumps Filta UK 2023 Change Change
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 %
System sales 79,410 18,296 12,564 110,270 75,671 18,659 12,331 106,661 3,609 3%
Statutory revenue 18,408 18,296 9,350 46,054 18,086 18,659 10,062 46,807 (753) (2%)
Cost of sales (2,353) (11,911) (5,397) (19,661) (2,939) (12,399) (5,909) (21,247) 1,586 (8%)
Gross profit 16,055 6,385 3,953 26,393 15,147 6,260 4,153 25,560 833 3%
GP% 87% 35% 42% 57% 84% 34% 41% 55% 2% 4%
Administrative expenses (8,023) (4,424) (2,835) (15,282) (7,596) (4,406) (2,688) (14,690) (592) 4%
Adjusted EBITDA 8,032 1,961 1,118 11,111 7,551 1,854 1,465 10,870 241 2%
Adjusted EBITDA/System sales 10.1% 10.7% 8.9% 10.1% 10.0% 9.9% 11.9% 10.2%
The Water & Waste Services division continues to become more integrated
and grow its franchise focus by expanding its franchise networks and reducing
DLO operations. This has slightly reduced the critical Adjusted EBITDA/System
sales ratio as profits are transferred to franchisees. In the longer term,
this will benefit the business as it will be able to expand its coverage and
range of services more quickly.
Metro Rod
The results for Metro Rod may be summarised as follows:
2024 2023 Change Change
£'000 £'000 £'000 %
System sales 79,410 75,671 3,739 5%
Statutory revenue 18,408 18,086 322 2%
Cost of sales (2,353) (2,939) 586 (20%)
Gross profit 16,055 15,147 908 6%
GP% 87% 84% 3% 4%
Administrative expenses (8,023) (7,596) (427) 6%
Adjusted EBITDA 8,032 7,551 481 6%
EBITDA/System sales 10.1% 10.0%
Metro Rod includes Metro Plumb, Kemac, and the corporate franchise in North
East Scotland. Overall, System sales increased by 5% to £79.4m (2023:
£75.7m). Gross profit increased 6% as a result of a 3% improvement in the
gross profit percentage to 87% (2023: 84%). Administrative expenses grew by 6%
due to inflationary pressures on wages and other fixed costs. Adjusted EBITDA
increased by 6% to £8.0m (2023: £7.6m), driving a marginal improvement in
the key KPI of Adjusted EBITDA/System sales by 14 basis points to 10.1%.
Metro Plumb saw robust System sales growth of 16% in 2024. The business
benefited from expanding its range of services into gas and air source heat
pumps, diversifying into other sectors such as social housing, and reducing
reliance on lower-value insurance work.
Willow Pumps
The results for Willow Pumps may be summarised as follows:
2024 2023 Change Change
£'000 £'000 £'000 %
System Sales 18,296 18,659 (363) (2%)
Cost of sales (11,911) (12,399) 488 (4%)
Gross profit 6,385 6,260 125 2%
GP% 35% 34% 1% 4%
Administrative expenses (4,424) (4,406) (18) 0%
Adjusted EBITDA 1,961 1,854 107 6%
The business has three distinct revenue streams: service revenue, supply and
installation revenue, and a third, more recent revenue stream with the
establishment of the Special Project Division.
Overall System sales (the same as Statutory revenue as all the businesses are
DLOs) declined by 2% to £18.3m (2023: £18.7m). This was entirely due to the
sale in late 2023 of the Kent and Sussex corporate franchise previously
managed by Willow Pumps. The underlying sales of the core Willow Pumps
business grew by 4%.
Overall, the gross profit percentage improved from 34% to 35% due to the focus
away from high-volume, low margin work. The Special Projects division is
engaged in larger, longer-term projects and is beginning to win work, but it
did not significantly contribute in 2024 as some customers delayed the start
of projects.
Adjusted EBITDA increased by 6% to £2.0m (2023: £1.9m), as the business
benefitted from higher gross margins and tightly controlled overheads.
Filta UK
The results of Filta UK may be summarised as follows:
2024 2023 Change Change
£'000 £'000 £'000 %
System sales 12,564 12,331 233 2%
Statutory revenue 9,350 10,062 (712) (7%)
Cost of sales (5,397) (5,909) 512 (9%)
Gross profit 3,953 4,153 (200) (5%)
GP% 42% 41% 1% 2%
Administrative expenses (2,835) (2,688) (147) 5%
Adjusted EBITDA 1,118 1,465 (347) (24%)
In 2024, Filta UK initially comprised the Filta Seal fridge seal replacement
business, Filta Pumps and the Filta Environmental business, which operated as
a franchise as well as a DLO network.
During the year, this business was reorganised with the transfer of all the
remaining Filta Environmental work from a direct labour workforce to the
expanded franchise network. The expanded network is now delivering all Fats,
Oil and Grease ("FOG") servicing work. While this has reduced short-term
profits generated for the Group from this activity during this transition
phase, in the long term, the overhead savings and the royalties generated from
an expanded franchise business will more than compensate.
As part of our integration strategy, Filta's pump business was transferred to
Willow Pumps towards the end of the year. This will allow better use of the
DLO labour, drive efficiencies by reducing duplication, and improve the
customer experience.
The loss of margin resulting from the transfer of the Filta Environmental work
resulted in a decline in the gross profit. Administrative expenses grew by 5%
as a result of the prior year benefitting from an R&D tax credit on the
development of the Cyclone Grease Recovery Unit, which was not repeated in
2024.
Filta International
The results for Filta International may be summarised as follows:
North America Europe 2024 North America Europe 2023 Change Change
£'000 £'000 £'000 £'000 £'000 £'000 £'000 %
System sales 94,446 3,380 97,826 87,004 3,478 90,482 7,344 8%
Statutory revenue 25,029 568 25,597 26,506 611 27,117 (1,520) (6%)
Cost of sales (15,419) (272) (15,691) (17,011) (338) (17,349) 1,658 (10%)
Gross profit 9,610 296 9,906 9,495 273 9,768 138 1%
GP% 38% 52% 39% 36% 45% 36% 3% 7%
Administrative expenses (3,601) (312) (3,913) (3,171) (500) (3,671) (242) 7%
Adjusted EBITDA 6,009 (16) 5,993 6,324 (227) 6,097 (104) (2%)
Adjusted EBITDA/ 6.4% 6.1% 7.3% 6.7%
System sales
Filta International comprises the Filta franchise networks in North America
and Europe.
System sales in North America increased by 8% to £94.4m (2023: £90.5m) and
in local currency by 12% to $120.9m (2023: $108.2m), benefiting from a
supportive macroenvironment and good traction with the FiltaMax strategic
growth initiative. Excluding used cooking oil ("UCO") sales, underlying
systems sales grew by 14% to £79.6m (2023: £69.8m) and in local currency by
17% to $101.9m (2023: $86.8m).
Good progress was made driving penetration in the 55 metro markets where the
range of services is being expanded and franchisees upgraded. Strong momentum
was generated in growing the royalty based FiltaGold and FiltaClean services,
which now account for over 20% of System Sales.
Progress is also being made in converting the franchisees onto a royalty-only
model and away from the historic fixed monthly fee on each Mobile Filtration
Unit ("MFU") in service. 25% of franchisees who contribute 50% of the system
sales have transitioned to the royalty model in 2024.
Sales of UCO in 2024 declined by 14% to £14.8m (2023: £17.2m) and in local
currency by 11% to $19.0m (2023: $21.4m). This resulted from a fall in the
price of UCO of 23% in local currency despite a 15% increase in volume. The
reduction in the value of UCO resulted in a decline in the year-on-year
contribution from this activity of £0.6m.
Administrative expenses in North America increased by 14% in the period due to
the cost of strengthening the senior management team with the appointment of a
new COO and additional software development costs.
Adjusted EBITDA in North America was flat at $7.7m, on a local currency basis,
but declined by 5% to £6m (2023: £6.3m) on a reported basis. Excluding the
contribution from UCO, Adjusted EBITDA grew by 10% to £3.7m (2023: £3.4m)
and in local currency by 19% to $4.8m (2023: $4.0m).
System sales in Europe are generated from fryer management, seal replacement
and GRU installations. Overall, System sales declined by 3%. This sub-scale
activity was scaled back in 2024, virtually eliminating the losses, and we
anticipate it will be sold to a Master Franchisee in 2025.
B2C Division
The results of the B2C division may be summarised as follows:
2024 2023 Change Change
£'000 £'000 £'000 %
System sales 25,972 26,189 (217) (1%)
Statutory revenue 5,752 6,106 (354) (6%)
Cost of sales (1,001) (1,207) 206 (17%)
Gross profit 4,751 4,899 (148) (3%)
GP% 83% 80% 3% 3%
Administrative expenses (2,546) (2,583) 37 (1%)
Adjusted EBITDA 2,205 2,316 (111) (5%)
The B2C division is a B2C franchise business that includes ChipsAway,
Ovenclean, and Barking Mad consumer brands. Its income is derived mainly from
monthly fees paid by franchisees for using the brands and from the fees
generated on recruiting new franchisees. Given the difference in the income
model between this business and the B2B businesses, it operates as an
autonomous division of the Group from its headquarters in Kidderminster.
2024 was a challenging year for franchisee recruitment and retention. 24 new
franchisees were recruited in 2024 (2023: 41), and 53 franchisees left the
system (2023: 63), resulting in a net decline of 29 franchisees (2023: 22). As
a result, System sales declined very marginally in 2024, which represents 74%
of divisional System sales.
Gross profit declined by 3% due to lower monthly fee income on the reduced
franchise base and the lower income from franchise recruitment. Strict cost
control resulted in overhead being 1% lower than the previous year. As a
result, Adjusted EBITDA declined by only 5% to £2.2m (2023: £2.3m), which we
consider a solid result given the challenging environment.
Azura
Azura is a SaaS supplier of franchise management software to the Group and
over 30 other franchise businesses. The results for the period may be
summarised as follows:
2024 2023 Change Change
£'000 £'000 £'000 %
System sales 808 745 63 8%
Statutory revenue 808 745 63 8%
Cost of sales 0 0 0 0%
Gross profit 808 745 63 8%
GP% 100% 100% - -
Administrative expenses (764) (531) (233) 44%
Adjusted EBITDA 44 214 (170) (79%)
Statutory revenue is comprised of third-party income of £0.4m (2023: £0.4m)
and charges to Group companies of £0.4m (2023: £0.4m), which are eliminated
on consolidation. During the year, Azura invested substantially in its
internal resources to support the rollout of the Vision works-management
platform throughout the Group, which has resulted in a significant increase in
overheads and reduced Adjusted EBITDA.
One Franchise Brands
The One Franchise Brands strategy was launched at the Group's Growth Summit in
Q4 2024. The objective is to create one integrated, efficient and connected
Group by the achievement of the following three key objectives:
1. Increasing our system sales - this will be achieved by expanding the
range of services offered to customers; maximising Group-wide sales
opportunities, including cross-selling; and the expansion of the franchise
network, particularly Metro Plumb and Filta Environmental.
2. Spending our money smartly - this will focus on creating an efficient
overhead structure operating on a single secure and effective IT platform.
3. Collecting our cash - to accelerate our deleveraging and put us in a
position to grow by acquisition as soon as possible.
These objectives are inter-linked as the integration of systems and
harmonisation of processes, will deliver an efficient overhead structure, and
connecting the wider Group, utilising the expertise and knowledge across all
our businesses, will open up new markets and sales opportunities. Progress
continues to be made on integrating all the Group's businesses and the
opportunities remain significant.
Peter Molloy
Chief Executive Officer
26 March 2025
FINANCIAL REVIEW
The Group's results for the year ended 31 December 2024 comprise a full-year
contribution from all divisions. The comparative results for the prior year
include just over eight months of contribution from Pirtek, which was acquired
on 20 April 2023.
Summary statement of income
2024 2023 restated Change Change
£'000 £'000 £'000 %
System sales 418,458 350,053 68,405 20%
Statutory revenue 139,206 121,019 18,187 15%
Cost of sales (55,887) (52,790) (3,097) 6%
Gross profit 83,319 68,229 15,090 22%
Administrative expenses (48,198) (38,076) (10,122) 27%
Adjusted EBITDA 35,121 30,153 4,968 16%
Depreciation & amortisation of software (6,072) (4,598) (1,474) 32%
Finance expense (7,378) (5,734) (1,644) 29%
Foreign Exchange (386) (146) (240) 164%
Adjusted profit before tax 21,285 19,675 1,610 8%
Tax expense (4,743) (5,147) 404 (8%)
Adjusted profit after tax 16,542 14,528 2,014 14%
Amortisation of acquired intangibles (10,156) (7,718) (2,438)
Share-based payment expense (1,480) (838) (642)
Non-recurring items (444) (6,159) 5,715
Tax on adjusting items 2,822 3,174 (352)
Statutory profit 7,284 2,987 4,297 144%
Other Comprehensive Income 349 (68) 417
Total Profit and Other Comprehensive Income 7,633 2,919 4,714 162%
Adjusted EBITDA grew by 16%, primarily as a result of Pirtek's full-year
contribution in 2024 versus almost eight months of trading in 2023. The
underlying like-for-like Adjusted EBITDA was flat.
Depreciation and amortisation of software increased 32% to £6.1m (2023:
£4.6m), principally due to the full twelve-month impact of the Pirtek
acquisition.
The finance expense increased by 29% due to the full twelve-month impact of
the Pirtek acquisition. The average interest rate payable on the bank loans
reduced to 7.6% (2023: 7.7%). The interest margin also reduced from 2.75% at
the completion of the Pirtek acquisition to a current margin of 2.5%,
reflecting the reduction in total debt and the ratio of total debt to Adjusted
EBITDA.
Foreign exchange differences reflect the realised and unrealised losses
primarily associated with internal and external debt funding arrangements for
both the Pirtek acquisition and the Pirtek intercompany loans.
The overall effective tax rate has fallen to 22.3% (2023: 26.1%) as a result
of adjustments to the prior year's estimate and the recognition of a deferred
tax asset not previously recognised in relation to the Pirtek acquisition.
The increase in the amortisation of acquired intangibles reflects the full
twelve-month impact of the Pirtek acquisition and the final valuation of these
assets.
The increase in the share-based payment expense principally reflects
additional grants made to the Pirtek team and other new employees who joined
the Group during 2023/4.
Statutory profit after tax rose by 144% to £7.3m (2023: £3.0m) due to the
significant reduction in non-recurring items which, in 2023, included the
Pirtek acquisition costs.
Prior Year Adjustments
During the year, the implementation of IRFS accounting standards was reviewed
with our new auditors, giving rise to a restatement of the prior year
accounts. The overall impact of the adjustments is to reduce Adjusted EBITDA
in the year ended 31 December 2023 by £0.1m. Full details are provided in
Note 1 of the Annual Report and Accounts.
Earnings per share
The Adjusted and basic EPS are shown in the table below:
2024 EPS 2023 EPS
£'000 p £'000 p
Adjusted profit after tax 16,542 8.59 14,528 8.39
(10,156) (5.28) (7,718) (4.46)
Amortisation of acquired intangibles
(1,480) (0.77) (838) (0.48)
Share based payment
(444) (0.23) (6,159) (3.56)
Non-recurring costs
2,822 1.47 3,174 1.84
Tax on adjusting items
Statutory profit after tax 7,284 3.78 2,987 1.73
The total number of ordinary shares in issue as at 31 December 2023 was
193,784,080 (31 December 2023: 193,784,080).
The EBT started the year holding 1,562,685 ordinary shares, purchased 326,112
and disposed of 641,675 ordinary shares in respect of the exercise of employee
shares options and therefore ended the period holding 1,247,122 ordinary
shares. On 31 December 2024, there were 14,815,191 shares under option (7.7%
of the total number of ordinary shares), of which 2,514,509 have vested and
are capable of exercise.
The total number of ordinary shares in issue as at 31 December 2024 net of the
EBT holding was 192,536,958 (31 December 2023: 192,221,395), and the basic
weighted average number of ordinary shares in issue for was 192,221,395 (2023:
173,090,691).
Adjusted basic EPS increased by 2% to 8.59p (2023: 8.39p as restated), and
basic earnings per share increased by 118% to 3.78p (2023: 1.73p as restated).
Cash flow and working capital
A summary of the Group cash flow for the period is set out in the table below.
2024 Restated
2023
£'000 £'000
Adjusted EBITDA 35,121 30,153
Non-recurring costs (444) (6,159)
Working capital movements (1,577) 2
Adjusted cash generated from operations 33,100 23,996
Taxes paid (3,991) (4,498)
Purchases of property, plant and equipment (net of proceeds) (1,222) (986)
Purchase of software (1,657) (1,350)
Purchase of IP (9) (522)
Acquisition of subsidiaries including debt repaid - (48,894)
Acquired debt repaid - (136,747)
Funds raised via debt - 100,012
Funds raised via equity - 94,106
Net bank loans repaid (9,250) (13,000)
Interest paid bank and other loan (6,704) (5,374)
Lease payments (4,264) (2,897)
Funds supplied to the EBT (77) 192
Dividends paid (4,429) (3,371)
Other net movements (776) 954
Net cash movement 721 1,621
Net cash at beginning of year 12,278 10,935
Exchange differences on cash and cash equivalents (78) (278)
Net cash at end year 12,921 12,278
The Group generated Adjusted cash from operating activities of £33.1m (2023:
£24.0m) resulting in a cash conversion rate of 94% (2023: 80%).
Taxes paid reduced slightly due to an overpayment in the previous year.
Property, plant and equipment purchases were £1.2m (2023: £1.0m) and related
mostly to plant and equipment additions in the DLO businesses. The software
purchases represent the continued investment in our IT infrastructure as we
develop the global group platforms.
Bank loans repaid represent the continued repayment of the loans taken out to
fund the Pirtek acquisition. Interest paid reflects the cost of servicing this
debt. Lease payments have increased due to the full-year cost of the leases
acquired with the Pirtek acquisition.
Dividends paid reflect the combined cash cost of the final 2023 dividend and
the 2024 interim dividend paid in 2024.
The net debt of the Group may be summarised as follows:
31 December 2024 31 December 2023 Change
£'000 £'000 £'000
Cash 12,921 12,278 643
Term loan (40,000) (50,000) 10,000
RCF (37,431) (36,908) (523)
Loan fee 689 749 (60)
Hire purchase debt (1,266) (837) (429)
Adjusted (net debt)/net cash (65,087) (74,718) 9,631
Other lease debt (9,975) (7,567) (2,408)
(Net Debt) / Net cash (75,062) (82,285) 7,223
During the year the term loan balance was reduced by £10m (2023: £5m) in
accordance with the banking agreement. Adjusted net debt, the metric used in
calculating compliance with our banking covenants, reduced to £65.1m (2023:
£74.8m) and leverage from 2.5x to 1.9x times Adjusted EBITDA, which was in
line with management's expectations and comfortably within our banking
covenants.
Andrew Mallows
Chief Financial Officer
26 March 2025
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2024
2024 Total Restated* 2023 Total
Note £'000 £'000
Revenue 4 139,206 121,019
Cost of sales (55,887) (52,790)
Gross profit 83,319 68,229
Adjusted earnings before interest, tax, depreciation, amortisation, 35,121 30,153
share-based payments & non-recurring items ("Adjusted EBITDA")
Depreciation 5 (4,837) (3,673)
Amortisation of software 5 (1,235) (925)
Amortisation of acquired intangibles (10,156) (7,718)
Share-based payment expense (1,480) (838)
Non-recurring items 5 (444) (6,159)
Total administrative expenses (65,858) (57,293)
Net impairment losses on financial assets (492) (96)
Operating profit 16,969 10,840
Foreign exchange losses (386) (146)
Finance expense (7,378) (5,734)
Profit before tax 9,205 4,960
Tax expense (1,921) (1,973)
Profit for the year attributable to equity holders of the Parent Company 7,284 2,987
Other comprehensive (expense)/income
Actuarial gains 12 63
Exchange differences on translation of foreign operations 337 (131)
Total comprehensive (expense)/income attributable to equity holders of the 349 (68)
Parent Company
Total Profit and other comprehensive income for the year attributable to 7,633 2,919
equity holders of the Parent Company
Earnings per share
Basic 6 3.78p 1.73p
Diluted 6 3.74p 1.70p
* See Note 2 for details.
Consolidated Statement of Financial Position
At 31 December 2024
2024 Restated* Restated*
2023 2022
£'000 £'000 £'000
Assets
Non-current assets
Intangible assets 295,536 305,328 84,664
Property, plant and equipment 4,667 4,418 3,208
Right-of-use assets 11,106 9,338 2,568
Contract acquisition costs 454 427 402
Trade and other receivables 333 641 811
Total non-current assets 312,096 320,152 91,653
Assets in disposal groups classified as held for sale - - 5,455
Current assets
Inventories 7,577 7,062 1,989
Trade and other receivables 40,217 41,000 23,485
Contract acquisition costs 98 79 92
Current tax asset 390 1,104 220
Cash and cash equivalents 12,921 12,278 10,935
Total current assets 61,203 61,523 36,721
Total assets 373,299 381,675 133,829
Liabilities
Current liabilities
Trade and other payables 31,018 33,358 19,579
Loans and borrowings 9,311 9,251 -
Obligations under leases 3,062 2,862 831
Deferred income 2,237 1,318 873
Current tax liability 778 603 -
Total current liabilities 46,406 47,392 21,283
Liabilities directly associated with assets in Disposal groups classified as - - 2,561
held for sale
Non-current liabilities
Loans and borrowings 67,431 76,908 -
Obligations under leases 8,179 6,526 1,626
Deferred income 1,892 2,894 1,848
Deferred tax liability 30,828 33,919 4,134
Total non-current liabilities 108,330 120,247 7,608
Total liabilities 154,736 167,639 31,452
Total net assets 218,563 214,036 102,377
Issued capital and reserves attributable to owners of the Company
Share capital 969 969 652
Share premium 131,131 131,131 37,293
Share-based payment reserve 3,213 1,936 1,217
Merger reserve 69,754 69,754 52,212
Translation reserve 361 24 155
EBT reserve (2,756) (2,679) (2,871)
Retained earnings 15,891 12,901 13,719
Total equity attributable to equity holders 218,563 214,036 102,377
* See Note 2 for details.
Company Statement of Financial Position
At 31 December 2024
2024 2023
£'000 £'000
Assets
Non-current assets
Investment in group companies 208,905 207,830
Property, plant and equipment 7 -
Total non-current assets 208,912 207,830
Current assets
Trade and other receivables 102,459 103,177
Cash and cash equivalents 1,585 875
Total current assets 104.044 104,052
Total assets 312,956 311,882
Liabilities
Current liabilities
Trade and other payables 27,945 16,311
Loans and borrowings 9,311 9,251
Total current liabilities 37,256 25,562
Non-current liabilities
Loans and borrowings 67,431 76,908
Total non-current liabilities 67,431 76,908
Total liabilities 104,687 102,470
Net assets 208,269 209,412
Issued capital and reserves attributable to owners of the Company
Share capital 969 969
Share premium 131,131 131,131
Share-based payment reserve 3,213 1,936
Merger reserve 69,634 69,634
EBT reserve (2,756) (2,679)
Retained earnings 6,078 8,421
Total equity attributable to equity holders 208,269 209,412
Consolidated Statement of Cash Flows
For the year ended 31 December 2024
2024 Restated* 2023
Note £'000 £'000
Cash flows from operating activities
Profit for the year 7,284 2,987
Adjustments for:
Depreciation of property, plant and equipment 1,122 1,066
Depreciation of right-of-use assets 3,715 2,608
Amortisation of software & other intangibles 1,235 925
Amortisation of acquired intangibles 10,156 7,718
Stock provision adjustment (313) -
Non-recurring costs (491) 786
Share-based payment expense 1,480 838
Gain on disposal of property, plant and equipment (102) (55)
Current service cost - DBO (18) -
Finance expense 7,378 5,734
Exchange differences on translation of foreign operations 357 76
Tax expense 1,921 1,973
Operating cash flow before movements in working capital 33,724 24,656
Decrease/(Increase) in trade and other receivables 421 (3,591)
(Increase)/decrease in inventories (344) 338
Increase/(decrease) in trade and other payables (1,654) 3,255
Cash generated/(absorbed) from operations 32,147 24,658
Corporation taxes paid (3,991) (4,498)
Net cash generated from operating activities 28,156 20,160
Cash flows from investing activities
Purchases of property, plant and equipment (1,470) (1,183)
Proceeds from the sale of property, plant and equipment 248 251
Purchase of software (1,657) (1,350)
Purchase of Intellectual Property (9) (522)
Loans to franchisees (164) (149)
Loans to franchisees repaid 341 412
Acquisition of subsidiaries including costs, net of cash acquired - (48,894)
Net cash used in investing activities (2,711) (51,435)
Cash flows from financing activities
Bank loans - received 2,000 100,012
Bank loans - repaid (11,250) (62,097)
Loan notes - repaid - (29,155)
Preference shares - repaid - (58,520)
Capital element of lease liability repaid (3,666) (2,549)
Interest paid - bank and other loan (6,704) (5,374)
Interest paid - leases (598) (348)
Proceed from issue of shares - 94,106
Proceeds from sale/(purchase) of shares by the Employee Benefit Trust (77) 192
Dividends paid 7 (4,429) (3,371)
Net cash generated/(absorbed) from financing activities (24,724) 32,896
Net increase/(decreased) in cash and cash equivalents 721 1,621
Cash and cash equivalents at beginning of year 12,278 10,935
Exchange differences on cash and cash equivalents (78) (278)
Cash and cash equivalents at end of year 12,921 12,278
* See Note 2 for details.
RECONCILIATION OF CASH FLOW TO THE GROUP NET DEBT POSITION
Term Loan Revolving credit facility Loans & borrowings Preference shares Restated* Lease liabilities Restated* Total liabilities from financing activities Cash Restated* Total net cash / (net debt)
Group £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 - - - - (2,756) (2,756) 10,935 8,179
Financing cash inflows (55,000) (45,012) - - - (100,012) - (100,012)
Financing cash outflows 5,000 8,000 78,227 58,520 2,897 152,644 - 152,644
Leases interest expense - - - - (348) (348) - (348)
Other cash flows - - - - - - (5,421) (5,421)
Acquired through business combination - - (78,227) (58,520) (6,553) (143,300) 7,042 (136,258)
Cash items (50,000) (37,012) - - (4,004) (91,016) 1,621 (89,395)
Non-cash items
Amortised loan fees 749 - - - - 749 - 749
Foreign exchange movements - 104 - - (63) 41 (278) (237)
Additions to new leases - - - - (2,689) (2,689) - (2,689)
Disposals - - - - 124 124 - 124
At 1 January 2024 (49,251) (36,908) - - (9,388) (95,547) 12,278 (83,269)
Financing cash inflows - (2,000) - - - (2,000) - (2,000)
Financing cash outflows 10,000 1,250 - - 4,264 15,514 - 15,514
Leases interest expense - - - - (598) (598) - (598)
Other cash flows - - - - - - 721 721
Cash items 10,000 (750) - - 3,666 12,916 721 13,637
Non-cash items
Amortised loan fees (60) - - - - (60) - (60)
Foreign exchange movements - 227 - - 304 531 (78) 453
Additions to new leases - - - - (5,948) (5,948) - (5,948)
Disposals - - - - 125 125 - 125
At 31 December 2024 (39,311) (37,431) - - (11,241) (87,983) 12,921 (75,062)
Company Statement of Cash Flows
For the year ended 31 December 2024
2024 2023
Note £'000 £'000
Cash flows from operating activities
Profit for the year 2,064 5,000
Adjustments for:
Depreciation of property, plant and equipment 15 2 -
Non-recurring costs - 130
Management charges (4,428) (2,834)
Finance expenses 6,761 5,384
Tax expense (1,584) (1,377)
Exchange differences on translation of foreign operations (230) (105)
Share-based payment expense 203 211
Operating cash flow before movements in working capital 2,788 6,409
Decrease/(Increase) in trade and other receivables 19 919 3,373
Increase in trade and other payables 20 17,519 11,071
Cash (absorbed)/generated from operations 21,226 20,853
Corporation taxes paid (50) (1,345)
Net cash generated from operating activities 21,176 19,508
Cash flows from investing activities
Purchases of property, plant and equipment 15 (9) -
Investment in subsidiary - (36,826)
Loan to subsidiary - (99,925)
Acquisition of subsidiaries including costs - (57,855)
Net cash used in investing activities (9) (194,606)
Cash flows from financing activities
Bank loans - received 2,000 100,012
Bank loans - repaid (11,250) (13,000)
Interest paid - bank and other loans (6,701) (5,384)
Proceed from issue of shares (net of costs) - 94,106
Proceeds from sale/(purchase) of shares by the Employee Benefit Trust (77) 192
Dividends paid 28 (4,429) (3,371)
Net cash flows (absorbed)/generated by financing activities (20,457) 172,555
Net (decrease) in cash and cash equivalents 710 (2,543)
Cash and cash equivalents at beginning of year 875 3,418
Cash and cash equivalents at end of year 1,585 875
RECONCILIATION OF CASH FLOW TO THE COMPANY NET DEBT POSITION
Term Revolving credit facility Total liabilities from financing activities Cash Total net cash/(net debt)
Loan
Group £'000 £'000 £'000 £'000 £'000
At 1 January 2023 - - - 3,418 3,418
Financing cash inflows (55,000) (45,012) (100,012) - (100,012)
Financing cash outflows 5,000 8,000 13,000 - 13,000
Other cash flows - - - (2,543) (2,543)
Cash items (50,000) (37,012) (87,012) (2,543) (89,555)
Non-cash items
Amortised Loan Fees 749 - 749 - 749
Foreign exchange movements - 104 104 - 104
At 1 January 2024 (49,251) (36,908) (86,159) 875 (85,284)
Financing cash inflows - (2,000) (2,000) - (2,000)
Financing cash outflows 10,000 1,250 11,250 - 11,250
Cash items 10,000 (750) 9,250 710 9,960
Non-cash items
Other cash flows - - - 710 710
Amortised Loan Fees (60) - (60) - (60)
Foreign exchange movements - 227 227 - 227
At 31 December 2024 (39,311) (37,431) (76,742) 1,585 (75,157)
Consolidated Statement of Changes in Equity
For the year ended 31 December 2024
Share Share premium Share-based payment Merger Translation EBT *Restated Retained
capital account reserve reserve reserve reserve earnings Total
Group £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 652 37,293 1,217 52,212 155 (2,871) 14,026 102,684
Correction of errors - - - - - - (307) (307)
*Restated At 1 January 2023 652 37,293 1,217 52,212 155 (2,871) 13,719 102,377
Profit for the year - - - - - - 2,987 2,987
Actuarial gain - - - - - - 63 63
Foreign exchange translation differences - - - - (131) - - (131)
Profit for the year and total comprehensive income - - - - (131) - 3,050 2,919
Contributions by and distributions to owners
Shares issued 317 96,392 - 17,542 - - - 114,251
Share Placing costs charged to Share Premium - (2,554) - - - - - (2,554)
Dividend paid - - - - - - (3,371) (3,371)
Contributions to Employee Benefit Trust - - - - - 192 - 192
Share-based payment - - 719 - - - - 719
Tax on share-based payment expense - - - - - - (496) (496)
At 1 January 2024 969 131,131 1,936 69,754 24 (2,679) 12,901 214,036
Profit for the year - - - - - - 7,284 7,284
Actuarial gain - - - - - - 12 12
Foreign exchange translation differences - - - - 337 - - 337
Profit for the year and total comprehensive income - - - - 337 - 7,296 7,633
Contributions by and distributions to owners
Shares issued - - - - - - - -
Dividend paid - - - - - - (4,429) (4,429)
Contributions to Employee Benefit Trust - - - - - (77) - (77)
Share-based payment - - 1,277 - - - - 1,277
Tax on share-based payment expense - - - - - - 123 123
At 31 December 2024 969 131,131 3,213 69,754 361 (2,756) 15,891 218,563
* See Note 2 for details.
Company Statement of Changes in Equity
For the year ended 31 December 2024
Share Share premium Share-based payment Merger EBT Retained
capital account reserve reserve reserve earnings Total
Company £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 652 37,293 1,217 52,092 (2,871) 6,850 95,233
Profit for the year and total comprehensive income - - - - - 5,000 5,000
Contributions by and distributions to owners
Shares issued 317 96,392 - 17,542 - - 114,251
Share Placing costs charged to Share Premium - (2,554) - - - - (2,554)
Dividend paid - - - - - (3,371) (3,371)
Contributions to Employee Benefit Trust - - - - 192 - 192
Share-based payment - - 719 - - - 719
Tax on share-based payment expense - - - - - (58) (58)
At 1 January 2024 969 131,131 1,936 69,634 (2,679) 8,421 209,412
Profit for the year and total comprehensive income - - - - - 2,064 2,064
Contributions by and distributions to owners
Shares issued - - - - - - -
Dividend paid - - - - - (4,429) (4,429)
Contributions to Employee Benefit Trust - - - - (77) - (77)
Share-based payment - - 1,277 - - - 1,277
Tax on share-based payment expense - - - - - 22 22
At 31 December 2024 969 131,131 3,213 69,634 (2,756) 6,078 208,269
Notes forming part of the Financial Statements
For the year ended 31 December 2024
1 Basis of preparation
The Group's financial statements have been prepared in accordance with
UK-adopted international accounting standards, in accordance with the
Companies Act 2006 as they apply to the financial statements of the Group for
the year ended 31 December 2024. The Group's consolidated financial statements
are prepared under the historical cost convention. The principal accounting
policies adopted are set out below and have been consistently applied to all
the years presented. The Group's financial statements are presented in
sterling and all values are rounded to the nearest thousand pounds (£'000s)
except where indicated.
The consolidated financial statements incorporate the results and net assets
of the Company and its subsidiary undertakings. Subsidiaries are consolidated
from the date of their acquisition, being the date on which the Group obtains
control, and continue to be consolidated until the date control ceases. All
inter-company transactions and balances between Group entities are eliminated
upon consolidation.
2 Restatements
During the year we have identified a number of errors that have given rise to
a restatement of the prior year accounts.
1. We have identified errors that certain transactions in the Group's
Metro Rod Limited subsidiary have been treated incorrectly in respect of IFRS
15. National account revenue was recognised at the point of passing the work
order to the franchisee, as this was considered to be our performance
obligation. Having reconsidered IFRS 15 we believe that this sales-based
royalty should be recognised at the later of the performance obligation being
met or when the subsequent sale occurs. As the subsequent sale to the end
customer by the franchisee is always after our performance obligation is met,
it is at this point that our sales-based royalty revenue should be recognised,
which is at the point of job completion. The impact of this is to increase
revenue and profit before tax in the year ended 31 December 2023 by £0.0m. In
the Consolidated Statement of Financial Position this adjustment decreases
Trade and Other Receivables for Accrued Income by £1.7m (2022: £1.5m),
decreases Trade and Other Payables for Accruals by £1.4m (2022: £1.2m) and
decreases Retained Earnings by £0.3m (2022: £0.3m). In the Consolidated
Statement of Cashflows the impact is a decrease in profit of £0.0m, a £0.2m
reduction in cash flows from trade and other receivables and a £0.2m
reduction in cash flows to trade and other payables. This affects Note 2a, 2b
and 2c.
2. We have identified errors that certain transactions in the Group's The
Filta Group Limited subsidiary have been treated incorrectly in respect of
IFRS 15. National account revenue where the franchise operates outside of
its franchise territory was treated gross, or on a principal basis. We are
now treating this revenue net, as following consideration of the underlying
contracts, facts and circumstances, we consider Filta to be acting as a
commission agent for its franchisees. The business only has momentary control
of the incoming order following acceptance of the job ahead of passing it to
the incumbent franchise in a back-to-back arrangement where local franchisees
have a right of first refusal on the order received. Operational fulfilment
also rests with the franchisee. The impact of this is to reduce revenue in
the year ended 31 December 2023 by £1.0m, with an equivalent reduction in
cost of sales; there is no profit impact of this change. This affects Note 2a.
3. Certain transactions in the Group's Pirtek subsidiaries have been
presented incorrectly between revenue, cost of sales and administration
expenses. Where a franchise is charged for use of a service, this is now
treated as revenue, to bring in line with the Group's revenue recognition
policies on NAF, IT and central billing. Where a cost is directly
attributable to revenue, it is treated as a cost of sales; in the past certain
costs have been treated as administrative expenses. The impact on the
Consolidated Statement of Comprehensive Income in the year ended 31 December
2023 is to increase revenue by £1.8m, increase cost of sales by £4.8m, and
reduce administrative expenses by £3.0m. There is no overall impact on
operating profit. This affects Note 2a.
4. We have identified inconsistencies within the Group with relation to
the treatment of MSF on input costs that franchisees incur and can reclaim
from the franchisor. Within the Metro Rod subsidiary these allowable costs
should be shown as a rebate against revenue. The impact on the Consolidated
Statement of Comprehensive Income in the year ended 31 December 2023 is to
decrease revenue and cost of sales by £1.1m. There is no overall impact on
operating profit. This affects Note 2a.
5. The calculation in relation to IFRS 16 for the Group's Pirtek
subsidiaries was incomplete at 31 December 2023. The impact of including all
leases is to increase revenue by £0.0m, adjusted EBITDA by £0.2m, and profit
before tax in the year ended 31 December 2023 by £0.0m. In the Consolidated
Statement of Financial Position this adjustment increases Right of use assets
by £0.9m, with an equivalent increase in Obligations under leases. In the
Consolidated Statement of Cashflows the impact is a decrease in profit of
£0.0m, a £0.2m increase in operating cashflows before movements in working
capital, and a £0.2m increase in net cash absorbed from financing activities.
This affects Note 2a, 2b and 2c.
6. Within the Consolidated Statement of Comprehensive Income impairment
loss arising from expected credit losses on trade receivables has been
reclassified to be an administrative expense rather than an adjusting item.
As such, this reduces adjusted EBITDA in the year ended 31 December 2023 by
£0.1m, but has no impact on Gross Profit or Operating Profit. This affects
Note 2a.
2a Consolidated Statement of Comprehensive Income (restated)
For the year ended 31 December 2023
Restatement number As previously reported 31 December 2023 Correction of errors (Restated) 31 December 2023
£'000 £'000 £'000
Revenue 1,2,3,4,5 121,265 (246) 121,019
Cost of sales 2,3,4 (50,060) (2,730) (52,790)
Gross profit 71,205 (2,976) 68,229
Adjusted earnings before interest, tax, depreciation, amortisation, 30,101 52 30,153
share-based payments, impairment loss & non-recurring items ("Adjusted
EBITDA")
Depreciation 5 (3,492) (181) (3,673)
Amortisation of software (925) - (925)
Amortisation of acquired intangibles (7,718) - (7,718)
Impairment loss 6 (96) 96 -
Share-based payment expense (838) - (838)
Non-recurring items (6,159) - (6,159)
Total administrative expenses (60,332) 3,039 (57,293)
Net impairment losses on financial assets 6 - (96) (96)
Operating profit 10,873 (33) 10,840
Foreign exchange losses (146) - (146)
Finance expense 5 (5,711) (23) (5,734)
Profit before tax 5,016 (56) 4,960
Tax expense 5 (1,979) 6 (1,973)
Profit for the year attributable to equity holders of the Parent Company 3,037 (50) 2,987
Other comprehensive (expense)/income
Actuarial gains 63 - 63
Exchange differences on translation of foreign operations (131) - (131)
Total comprehensive income attributable to equity holders of the Parent 2,969 (49) 2,919
Company
Earnings per share
Basic 1.75p (0.02p) 1.73p
Diluted 1.73p (0.03p) 1.70p
2b Consolidated Statement of Financial Position (restated)
As previously reported 31 December 2023 Correction of errors As at 31 December 2023 (restated) As previously reported 1 January 2023 Correction of errors As at 1 January 2023 (restated)
Restatement number
£'000 £'000 £'000 £'000 £'000 £'000
Assets
Non-current assets
Intangible assets 305,328 - 305,328 84,664 - 84,664
Property, plant and equipment 4,418 - 4,418 3,208 - 3,208
Right-of-use assets 5 8,404 934 9,338 2,568 - 2,568
Contract acquisition costs 427 - 427 402 - 402
Trade and other receivables 641 - 641 811 - 811
Total non-current assets 319,218 934 320,152 91,653 - 91,653
Assets in disposal groups classified as held for sale - - - 5,455 - 5,455
Current assets
Inventories 7,062 - 7,062 1,989 - 1,989
Trade and other receivables 1,5 42,701 (1,701) 41,000 24,991 (1,506) 23,485
Contract acquisition costs 79 - 79 92 - 92
Current tax asset 1,104 - 1,104 220 - 220
Cash and cash equivalents 12,278 - 12,278 10,935 - 10,935
Total current assets 63,224 (1,701) 61,523 38,227 (1,506) 36,721
Total assets 382,442 (767) 381,675 135,335 (1,506) 133,829
Liabilities
Current liabilities
Trade and other payables 1,5 34,746 (1,388) 33,358 20,778 (1,199) 19,579
Loans and borrowings 9,251 - 9,251 - - -
Obligations under leases 2,617 245 2,862 831 - 831
Deferred income 1,318 - 1,318 873 - 873
Current tax liability 603 - 603 - - -
Total current liabilities 48,535 (1,143) 47,392 22,482 (1,199) 21,283
Liabilities directly associated with assets in Disposal groups classified as - - - 2,561 - 2,561
held for sale
Non-current liabilities
Loans and borrowings 76,908 - 76,908 - - -
Obligations under leases 5 5,787 739 6,526 1,626 - 1,626
Deferred income 2,894 - 2,894 1,848 - 1,848
Contingent consideration - - - - - -
Deferred tax liability 5 33,925 (6) 33,919 4,134 - 4,134
Total non-current liabilities 119,514 733 120,247 7,608 - 7,608
Total liabilities 168,049 (410) 167,639 32,651 (1,199) 31,452
Total net assets 214,393 (357) 214,036 102,684 (307) 102,377
Issued capital and reserves attributable to owners of the Company
Share capital 969 - 969 652 - 652
Share premium 131,131 - 131,131 37,293 - 37,293
Share-based payment reserve 1,936 - 1,936 1,217 - 1,217
Merger reserve 69,754 - 69,754 52,212 - 52,212
Translation reserve 24 - 24 155 - 155
EBT reserve (2,679) - (2,679) (2,871) - (2,871)
Retained earnings 1,5 13,258 (357) 12,901 14,026 (307) 13,719
Total equity attributable to equity holders 214,393 (357) 214,036 102,684 (307) 102,377
As at 1 January 2023 and 31 December 2023
2c Consolidated Statement of Cash Flows (Restated)
For the year ended 31 December 2023
As previously reported Correction of errors (Restated) 31 December 2023
31 December 2023
Restatement number £'000 £'000 £'000
Cash flows from operating activities
Profit for the year 1,5 3,037 (50) 2,987
Adjustments for:
Depreciation of property, plant and equipment 5 1,066 - 1,066
Depreciation of right-of-use assets 2,427 181 2,608
Amortisation of software & other intangibles 925 - 925
Amortisation of acquired intangibles 7,718 - 7,718
Non-recurring costs 786 - 786
Share-based payment expense 838 - 838
Gain on disposal of PPE (54) (1) (55)
Finance expense 5 5,711 23 5,734
Exchange differences on translation of foreign operations 76 - 76
Tax expense 5 1,979 (6) 1,973
Operating cash flow before movements in working capital 24,509 147 24,656
(Increase) in trade and other receivables 1 (3,767) 176 (3,591)
(Increase)/decrease in inventories 338 - 338
Increase/(decrease) in trade and other payables 1 3,368 (113) 3,255
Cash generated/(absorbed) from operations 24,448 210 24,658
Corporation taxes paid (4,498) - (4,498)
Net cash generated from operating activities 19,950 210 20,160
Cash flows from investing activities
Purchases of property, plant and equipment (1,183) - (1,183)
Proceeds from the sale of property, plant and equipment 251 - 251
Purchase of software (1,350) - (1,350)
Purchase of Intellectual Property (522) - (522)
Loans to franchisees (149) - (149)
Loans to franchisees repaid 412 - 412
Acquisition of subsidiaries including costs, net of cash acquired (48,894) - (48,894)
Net cash used in investing activities (51,435) - (51,435)
Cash flows from financing activities
Bank loans - received 100,012 - 100,012
Bank loans - repaid (62,097) - (62,097)
Loan notes - repaid (29,155) - (29,155)
Preference shares - repaid (58,520) - (58,520)
Capital element of lease liability repaid 5 (2,362) (187) (2,549)
Interest paid - bank and other loan (5,374) - (5,374)
Interest paid - leases 5 (325) (23) (348)
Proceed from issue of shares 94,106 - 94,106
Proceeds from sale/(purchase) of shares by the Employee Benefit Trust 192 - 192
Dividends paid (3,371) - (3,371)
Net cash generated/(absorbed) from financing activities 33,106 (210) 32,896
Net increase/(decreased) in cash and cash equivalents 1,621 - 1,621
Cash and cash equivalents at beginning of year 10,935 - 10,935
Exchange differences on cash and cash equivalents (278) - (278)
Cash and cash equivalents at end of year 12,278 - 12,278
3 OPERATING SEGMENTS
The Group's operating segments are determined based on the Group's internal
reporting to the Chief Operating Decision Maker ("CODM"). The CODM has been
determined to be the Chief Executive Officer, with support from the Board of
Directors, as the function primarily responsible for the allocation of
resources to segments and assessment of performance of the segments. The
business is organised along the lines of our Pirtek, Water & Waste
Services, Filta International and B2C businesses.
Therefore, the Board has determined that we have six different operating
segments:
· Pirtek Europe, the franchise and direct labour operations of Pirtek
across eight European countries;
· Water & Waste Services, which is made up of Metro Rod and
Metro Plumb, Willow Pumps and Filta UK;
· Filta International, which is made up of Filta US and Filta
Europe;
· B2C, which is made up of ChipsAway, Ovenclean and Barking Mad;
· Azura, which is made up of the software business of Azura; and
· Unallocated assets includes results from central administration and
non-trading companies; elimination of inter-company trading; and assets and
liabilities that are not directly attributable to a segment, or are not able
to be allocated on a reasonable basis. This includes intangible assets
generated as part of business acquisitions.
The CODM uses Adjusted EBITDA, as reviewed at Board meetings and as part of
the Managing Directors' and Chief Financial Officer's weekly report to the
senior management team, as the key measure of segments' results as it reflects
the underlying performance for the financial year under evaluation.
Pirtek Water & Waste Services Filta International B2C Azura Unallocated assets Total
2024 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue from external customers 63,913 43,577 25,597 5,752 367 - 139,206
Revenue from internal customers - 2,477 - - 441 (2,918) -
Segment revenue 63,913 46,054 25,597 5,752 808 (2,918) 139,206
Gross profit 41,903 26,393 9,906 4,751 808 (442) 83,319
Adjusted EBITDA* 19,925 11,111 5,993 2,205 44 (4,157) 35,121
Depreciation & amortisation of software (3,241) (2,120) (267) (226) (183) (35) (6,072)
Amortisation of acquired intangibles (7,867) (33) - - - (2,256) (10,156)
Share based payment expense (499) (437) (143) (55) (33) (313) (1,480)
Non-recurring costs (638) - - - - 194 (444)
Finance expense (1,022) (122) (57) (9) (8) (6,546) (7,764)
Profit before tax* 6,658 8,399 5,526 1,915 (180) (13,113) 9,205
Tax expense (1,928) (1,888) (1,355) (290) 48 3,492 (1,921)
Profit after tax* 4,730 6,511 4,171 1,625 (132) (9,621) 7,284
Additions to non-current assets 1,142 1,099 252 63 573 9 3,138
Reportable segment assets 84,258 45,651 8,881 4,295 1,195 229,019 373,299
Reportable segment liabilities (109,134) (25,114) (6,941) (1,953) (1,024) (10,570) (154,736)
* Operating segments presented before inter-company management recharges which
eliminate on consolidation.
Pirtek Water & Waste Services Filta International B2C Azura Unallocated assets Total
2023 (restated)** £'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue from external customers 43,774 43,619 27,117 6,106 403 - 121,019
Revenue from internal customers - 3,188 - - 342 (3,530) -
Segment revenue 43,774 46,807 27,117 6,106 745 (3,530) 121,019
Gross profit 27,600 25,560 9,768 4,899 745 (343) 68,229
Adjusted EBITDA* 13,503 10,870 6,097 2,316 214 (2,847) 30,153
Depreciation & amortisation of software (1,989) (2,147) (222) (178) (89) 27 (4,598)
Amortisation of acquired intangibles (5,468) - (35) - - (2,215) (7,718)
Share based payment expense (290) (329) (86) (28) (4) (101) (838)
Non-recurring costs (1,864) (1,189) (98) (16) (43) (2,949) (6,159)
Finance expense (426) (54) (93) (12) (2) (5,293) (5,880)
Profit before tax* 3,466 7,151 5,563 2,082 76 (13,378) 4,960
Tax expense (1,036) (1,315) (1,605) (409) (20) 2,412 (1,973)
Profit after tax* 2,430 5,836 3,958 1,673 56 (10,966) 2,987
Additions to non-current assets 2,573 1,928 319 136 270 223,539 228,765
Reportable segment assets 89,080 47,616 8,013 3,836 545 232,585 381,675
Reportable segment liabilities (116,484) (28,810) (6,910) (2,322) (206) (12,907) (167,639)
* Operating segments presented before inter-company management recharges which
eliminate on consolidation.
** See Note 2 for further information.
4 REVENUE
2024 Restated*
2023
£'000 £'000
Management service fee income - commission agent revenue 6,407 5,724
Management service fee income - royalty fee income 44,110 32,426
Franchise sales and resales - licence fees - recognised over time 1,464 1,754
Franchise sales and resales - termination fees and immediate sales - 989 1,030
recognised at point in time
Product sales 23,001 18,415
Waste Oil 14,837 17,469
Direct labour income 41,710 39,165
IT Contribution SAAS 2,544 1,769
National advertising funds 2,707 2,106
Central billing fee 364 248
Training facility income 353 304
Other income 720 609
139,206 121,019
* See Note 2 for further information.
The table shows revenue from contracts disaggregated into major classes of
revenue and reconciled to the Group revenue reported.
Revenue and non-current assets by origin of geographical segment for all
entities in the Group are as follows:
2024 Restated*
2023
Revenue £'000 £'000
North America 25,029 26,507
United Kingdom & Ireland 74,410 67,072
Continental Europe 39,767 27,440
139,206 121,019
* See Note 2 for further information.
2024 Restated*
2023
Non-current assets £'000 £'000
North America 42,532 43,836
United Kingdom & Ireland 159,155 163,869
Continental Europe 110,409 112,447
312,096 320,152
* See Note 2 for further information.
5 OPERATING PROFIT
2024 Restated*
2023
Operating profit is stated after charging: £'000 £'000
Depreciation 4,837 3,673
Amortisation 11,391 8,643
Share-based payment expense 1,480 838
Auditors' remuneration:
Fees for audit of the Company 47 44
Fees for the audit of the Group 477 618
Fees for non-audit services:
Taxation services - 113
Corporate finance services - 726
Other services 3 66
* See Note 2 for further information.
Of the total fee for the audit of the Group, £524,000 (2023: £662,000) was
paid to the Group statutory auditors PKF Littlejohn LLP (2023: BDO LLP). No
non-audit services were provided on a contingent fee basis.
The following costs have been drawn to the attention of the users of the
accounts due to their nature and materiality within the accounts.
2024 2023
£'000 £'000
Exceptional Income (409) -
Reorganisation expense 792 1,496
Other exceptional costs 61 319
Acquisition related-costs - 3,514
Intellectual property dispute - 516
Write-off software intangibles - 314
444 6,159
A summary of the separately disclosed items for the current year is as
follows:
Exceptional Income
This exceptional income was in relation to our DLO operations in mainland
Europe and were compensation for costs incurred as part of prior acquisitions
and Joint Ventures.
Reorganisation expense
Expenses incurred in relation to management changes in Pirtek Europe, Pirtek
Germany and Pirtek France.
Other costs
Other exceptional costs relate to costs associated with the appointment of an
interim CFO.
6 EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing profit for the
year attributable to Ordinary equity holders of the Parent Company by the
weighted average number of Ordinary Shares outstanding during the year.
Diluted earnings per share are calculated by dividing the profit attributable
to Ordinary equity holders of the Parent Company by the weighted average
number of Ordinary Shares outstanding during the year plus the weighted
average number of Ordinary Shares that would have been issued on the
conversion of all dilutive share options at the start of the period or, if
later, the date of issue.
2024 Restated*2023
£'000 £'000
Profit attributable to owners of the Parent Company 7,284 2,987
Non-recurring costs 444 6,159
Amortisation of acquired intangibles 10,156 7,718
Share-based payment expense 1,480 838
Tax on adjusting items (2,822) (3,174)
Adjusted profit attributable to owners of the Parent Company 16,542 14,528
2024 2023
Number Number
Basic weighted average number of shares 192,471,897 173,090,691
Dilutive effect of share options 2,231,135 2,241,161
Diluted weighted average number of shares 194,703,032 175,331,852
Pence Restated* Pence
Basic earnings per share 3.78 1.73
Diluted earnings per share 3.74 1.70
Adjusted earnings per share 8.59 8.39
Adjusted diluted earnings per share 8.50 8.29
* See Note 2 for further information.
7 DIVIDENDS
2024 2023
£'000 £'000
Final 2023 dividend of 1.2p per Ordinary Share paid and declared (2023: Final 2,325 1,433
2022 dividend of 1.1p)
Interim dividend of 1.1p per Ordinary Share paid and declared (2023: 1.0p) 2,132 1,938
4,457 3,371
A final dividend of 1.3 pence per share is proposed.
Shares held by the Employee Benefit Trust have a dividend waiver applied to
them; as such they are exempt from receiving a dividend, resulting in a
difference between the total dividend calculated above and the dividend cash
paid in the Consolidated Statement of Cash Flows.
6. Annual Report and Accounts
The annual report and accounts for the year ended 31 December 2024 will be
available on the Company's website
at https://www.franchisebrands.co.uk/investor-information/
(https://protect.checkpoint.com/v2/r06/___https:/www.franchisebrands.co.uk/nsAjxytw-nsktwrfyntsd___.ZXV3MjpuZXh0MTU6YzpvOmVmMzdkNzhiOGJmNDc4YTExY2JkZjg0ODI3YzhlZDBjOjc6ZTczNDo2MzliNDU0MWMzN2NmMTkyMzY3NTIxOWMyNzg1YzIxMzI1ZjZjYTJiMGFlMjU5NjY5NDIzZDQ2NDQwOTA3ZThiOnA6VDpU)
as soon as practicable in the week commencing 31 March 2025, notice of which
will be sent to shareholders on the register.
7. Annual General Meeting
The Annual General Meeting of Franchise Brands plc will be held on 7 May 2025,
notice of which will be sent to shareholders as soon as practicable in the
week commencing 31 March 2025.
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