REG - Franchise Brands PLC - Re-commencement of Share purchase programme

Franchise BrandsAnnouncement

15/10/2024 07:00

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RNS Number : 1310I  Franchise Brands PLC  15 October 2024

15 October 2024

 

FRANCHISE BRANDS PLC

("Franchise Brands", the "Group" or the "Company")

 

Re-commencement of Share purchase programme

 

Franchise Brands has been quoted on London's AIM market since its IPO in 2016.
AIM has been a highly supportive stock exchange for the Group, enabling it to
access appropriate capital to facilitate acquisitions and grow and diversify
its share register.

 

The Board believes that recent speculation about the potential impact of any
changes to Inheritance Tax legislation in the Autumn Budget on 30 October
2024, including potential removal of Business Property Relief for qualifying
companies quoted on AIM may have contributed to recent volatility in the
Company's share price. In times of such volatility, anomalies in the share
price present opportunities to act in the interests of all shareholders and
purchase shares, particularly when the Board believes that the share price
significantly undervalues the Group. Therefore, the Board now believes that it
would be in the interests of all shareholders to re-commence the share
purchase programme (the "Programme").

 

Franchise Brands will re-commence its discretionary Programme to buy ordinary
shares of 0.5p each in the Company ("Ordinary Shares") with immediate effect,
up to an aggregate value of £5,000,000.

 

The Trustee of the Franchise Brands PLC Employee Benefit Trust (the "EBT")
will purchase Ordinary Shares in accordance with the Programme. The Programme
seeks to mitigate the dilutive impact of share option awards and to improve
overall shareholder return. The EBT currently holds 983,510 Ordinary Shares
which represents 0.51 per cent. of the Company's current issued share capital.

 

The Board remains focused on debt reduction, a progressive dividend policy and
investment in the organic growth of the Group and whilst this modification to
its capital allocation policy will modestly extend the debt reduction
timetable, the Board still anticipates the full repayment of outstanding bank
debt by the end of 2027, and leverage to 31 December 2024 of less than 2
times* in line with previous guidance.

 

The Trustees of the EBT have entered into arrangements with the Company's
joint broker, Stifel Nicolaus Europe Limited ("Stifel"), to carry out
on-market purchases of Ordinary Shares under the Programme, including on a
discretionary basis independent of the Company during any prohibited periods
of the Company, as determined by the UK Market Abuse Regulation, which may
fall during the period of the Programme.

 

Due to the limited liquidity in the issued Ordinary Shares, any share purchase
of Ordinary Shares pursuant to the authority on any trading day may represent
a significant proportion of the daily trading volume in the Ordinary Shares on
the London Stock Exchange and may exceed 25 per cent. of the average daily
trading volume, being the limit laid down in Article 5(1) of Regulation (EU)
No 596/2014 (as incorporated into UK domestic law by the European Union
(Withdrawal) Act 2018) and the Commission Delegated Regulation (EU) 2016/1052
(as incorporated into UK domestic law by the European Union (Withdrawal) Act
2018) and, accordingly, the Company will not benefit from the exemption
contained in that Article.

 

*Leverage is calculated using Adjusted net debt and Adjusted EBITDA.

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.

 

 

Enquiries:

 Franchise Brands plc                                                 + 44 (0) 1625 813231
 Stephen Hemsley, Executive Chairman
 Andrew Mallows, Interim Chief Financial Officer
 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 / Liz Kirchner (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 7 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 625 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 over 650 people across the Group.

 

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