Metro Rod Franchise News Feed A strong performance, driven by accelerating Metro Rod system sales and acquisition of Willow Pumps - 06-March-2020 Franchise Brands plc, a multi-brand franchise business, is pleased to announce its full year audited results for the year ended 31 December 2019. Financial highlights Revenue increased by 24% to £44.0m (2018: £35.5m). Fee and direct labour income increased by 35% to £24.4m (2018: £18.1m). Adjusted EBITDA* increased by 29% to £5.2m (2018: £4.0m). • Statutory profit after tax increased by 17% to £2.7m (2018: £2.3m). Cash conversion rate against Adjusted EBITDA of 90% (2018: 79%). Adjusted net debt** of £9.2m at 31 December 2019 (2018: £5.0m), after the £4m initial cash consideration for Willow Pumps. Basic EPS increased by 16% to 3.48p (2018: 2.99p). Adjusted EPS*** increased by 29% to 4.34p (2018: 3.36p). Final dividend of 0.65p per share proposed (2018: 0.46p per share), giving a 42% increase in the total dividend for the year of 0.95p per share (2017: 0.67p per share), 4.6 times covered by adjusted profit after tax (2018: 5.0x). *Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, the share-based payment expense, and acquisition-related costs. ** Adjusted net debt is net debt before the effect of IFRS 16. *** Adjusted EPS is earnings per share before amortisation of acquired intangibles, the share-based payment expense, and acquisition-related costs. Operational highlights Metro Rod’s Vision 2023 strategy continues to drive our organic growth: System sales growth accelerated to 14% in 2019 (2018: 8%). 45% of franchisees achieved annual sales above £1m (2018: 34%). Over 30% of franchisees have grown their sales by over 20% in 2019 (2018: 22% of franchisees). Continued investment in capacity, including 44 additional vehicles and 55 additional engineers. Launch of our ITOL-accredited apprenticeship scheme to support the long-term increase in capacity. Acquisition of Willow Pumps and integration into the Group to create a business-to-business (“B2B”) division with Metro Rod and Metro Plumb. Willow Pumps trading exceeded our expectations in its first three months of ownership. The Willow Pumps Discovery Days have successfully introduced the franchisees to the substantial opportunities in the pumps sector that will allow them to expand their range of “Water in. Waste out.” services. Creation of a business-to-consumer (“B2C”) division, under one management team, to facilitate future acquisitions and maximise overhead efficiency. Improved franchise recruitment to 65 (2018: 57) growing the combined B2C networks to 404 franchisees (2018: 387 franchisees). Continued strong cash generation from the B2C brands. Stephen Hemsley, Executive Chairman, commented: “2019 has seen us successfully build the business both organically and by acquisition, with an acceleration in system sales growth at Metro Rod and Metro Plumb, and a recovery in franchise recruitment in the newly formed B2C division, complemented by the acquisition of Willow Pumps which has expanded Metro Rod’s range of services. “Trading in 2020 has started well, with job intake at Metro Rod, Metro Plumb and Willow Pumps up on the same period in 2019 and a strong start to the year for franchisee recruitment in the B2C division. “Whilst we have not yet seen any impact from the Covid-19 virus, we will continue to monitor the situation over the coming weeks. We have put in place plans which seek to mitigate any impact that the virus may have on our employees, franchisees, customers and suppliers. “Overall, we look forward to 2020 with considerable confidence given the Group’s strong start to the current year and the clear opportunities for growth we see across both our B2B and B2C divisions, particularly as we increasingly realise the benefits of our Vision 2023 strategy and our investment in new capabilities, capacity and a broader range of services at Metro Rod.” Franchise Brands Announces Acquisition of Willow Pumps - 08-October-2019 Franchise Brands plc, a multi-brand franchisor, is pleased to announce that it has acquired Willow Pumps, a leading water pump supply, installation and servicing business to complement and expand Metro Rod’s drainage and plumbing businesses. Willow Pumps was founded by Ian Lawrence in 1992 and has been family owned until the acquisition by Franchise Brands. Willow Pump’s scope of work involves the supply and installation of pumps, routine servicing work, the repair and maintenance of pumps and related drainage services that may be required. Pumps are supplied and installed for both below-ground and above-ground applications. Willow Pumps is highly complementary to Franchise Brand’s Metro Rod and Metro Plumb businesses and provides a strategic opportunity to expand the range of services that Metro Rod can offer to the commercial market, consistent with Metro Rod’s Vision 2023 strategy. All Metro Rod franchisees will be given the opportunity to upskill, identify and self-deliver pump work utilising Willow Pumps’ expertise. The additional pump work undertaken by Metro Rod franchisees is expected to enhance their profitability. Over time, Willow Pumps will benefit from a significantly expanded delivery capability through Metro Rod’s national network of over 400 engineers working out of 43 depots across the UK. Willow Pumps has a strong management team led by its founder, Ian Lawrence, who will continue as Managing Director, working together with Metro Rod, and will join Franchise Brand’s senior management team. Commenting on the Acquisition, Stephen Hemsley, Executive Chairman of Franchise Brands, said: “I am delighted to announce the acquisition of Willow Pumps, which represents an important step in expanding Metro Rod’s scope of services to the commercial market, consistent with our Vision 2023 strategy. The long-term aim of the Group is to be able to serve our valued commercial customers with a “water in, waste out” range of drainage, pumps and plumbing-related services on a national basis. The acquisition of Willow Pumps, a highly respected business and one of the leaders in the market, which Metro Rod has already worked alongside, provides the optimum way for Metro Rod to enter the specialist pump sector and develop this expertise across our franchise community. “I am really looking forward to working with Ian Lawrence and his high-quality management team to create a national leader for drainage, pump and plumbing services.” Ian Lawrence, the founder and Managing Director of Willow Pumps, commented: “I am very excited about building on our success to date as part of a larger, publicly quoted group with significant ambitions in the drainage, pumps and plumbing markets. The Group’s management and wider resources will be of particular value as we continue to grow Willow Pumps under Franchise Brands’ ownership. Interim results for the six months ended 30 June 2019 - 26-July-2019 Franchise Brands plc (AIM: FRAN), a multi-brand international franchisor, is pleased to announce its unaudited results for the six months ended 30 June 2019, the highlights of which can be seen below. Stephen Hemsley, Executive Chairman, commented: “Franchise Brands has delivered a strong performance in the first half of 2019 driven primarily by Metro Rod’s accelerating rate of growth. We have made significant progress with our strategy at Metro Rod and have begun to realise the benefits of our investment in infrastructure - in particular IT - that is starting to unlock sales growth, efficiencies and improved customer service, enhancing both corporate and franchisee profitability.” “All of our profitable, cash generative B2C brands have seen a substantial improvement in franchise recruitment compared to the challenging second half of last year and ChipsAway is increasingly well positioned for the rapid 2 changes underway in the automotive sector in particular in relation to ADAS and the growth of electric and hybrid vehicles.“ “The outlook for the Group therefore remains very positive, with the combination of accelerating organic growth and the potential for prudently financed, earnings-enhancing complementary acquisition opportunities giving us the confidence of delivering further significant growth in earnings and dividends in the current year and beyond.” Financial highlights Revenue increased by 19% to £20.1m (H1 2018: £16.8m). Fee and direct labour income increased by 25% to £10.6m (H1 2018: £8.4m). Adjusted EBITDA* increased by 25% to £2.5m (H1 2018: £2.0m). Basic EPS increased by 24% to 1.84p (H1 2018: 1.49p). Adjusted EPS** increased by 22% to 2.06p (H1 2018: 1.69p). Net debt*** of £5.4m at 30 June 2019 (31 December 2018: £5.9m), with balance sheet gearing of 21% (31 December 2018: 24%). An interim dividend of 0.30p per share declared (interim 2018: 0.21p per share), an increase of 43%, 6.1 times covered by profit after tax (interim 2018: 7.1x). Operational highlights Metro Rod’s “Vision 2023” strategy is delivering increasingly tangible benefits: System Sales growth of 15% (H1 2018: 4%), 83% of the network is in growth (H1 2018: 73%) with 39% of franchisees growing at over 20% year-on-year (H1 2018: 25%), Local sales have grown 19% (H1 2018: 8%), Excellent progress in the development of new business systems. Substantial improvement in franchise recruitment at ChipsAway, Ovenclean and Barking Mad compared to H2 2018: 34 new franchisees recruited in our B2C businesses (H2 2018: 16). Successful launch of ChipsAway’s pilot Car Care Centre incorporating the technology required to repair and recalibrate cars fitted with Advanced Driver Assistance Systems (“ADAS”). New management at Barking Mad resulting in deeper integration with the Group and increased efficiencies. Metro Rod franchisees and engineers recognised at spectacular annual awards ceremony! - 23-November-2018 Franchisees at Metro Rod, the market leader in commercial drainage, together with Support Centre teams, the Franchise Brands Board and key partners and suppliers, gathered last weekend at the prestigious Celtic Manor Resort for a spectacular annual conference and awards ceremony. The conference is a flagship event in the Metro Rod calendar and is a fantastic opportunity for everyone to recognise and celebrate the substantial success and achievements of the business as well as to hear first-hand the exciting growth prospects for Metro Rod and how they will be realised. Managing Director at Metro Rod, Peter Molloy said: “The theme of the 2018 conference was “focused on what makes a difference”, but with a particular emphasis on the importance of first-class customer service and operational excellence. We also recognised and applauded the heroic efforts and commitment of our dedicated engineers in serving our customers 24/7/365”. “Metro Rod has experienced tremendous growth over the past year since the launch of our “Vision 2023” strategy. Nearly 80% of our franchisees have experienced sales growth and a number have enjoyed very substantial levels of growth. This is testament to the passion, hard work and commitment of our franchisees and their dedication in providing a first-class customer experience. It also reflects the substantial support we provide them with on a daily basis. Our franchisees can look forward with confidence to an exciting future with Metro Rod”. Chief Information Officer, Colin Rees, and Head of IT, Tim Roberts took to the stage to update Metro Rod franchisees on the substantial investment already underway by Franchise Brands plc to digitally-enable the business. This investment will ensure Metro Rod can stay ahead of the game when it comes to providing a first-class service to its customers. Craig Henthorn, Marketing & Sales Director at Metro Rod also updated the network on the impressive initial results being generated from the new integrated marketing and sales strategy launched earlier in the year following a bold and exciting re-branding. Franchisees have benefited from record-breaking lead generation with much more to come in 2019. Peter Molloy also acknowledged the considerable traction being generated by the Metro Plumb business, which has been developed by Metro Rod franchisees since its launch in 2016. As a result of this recent growth, the conference was excited to welcome to the network the first stand-alone Metro Plumb franchisees, Riaz Contractor and Josh Crofts, who manage the South London franchise. The sizable plumbing market offers huge potential and we will be awarding further independent Metro Plumb franchises as the business continues to expand. Metro Rod award winners were announced at a gala black-tie dinner for nearly 200 people, with some top-class entertainment and dancing into the night. It was a glittering evening, mirroring the success and achievements of the top performers within the business. Many Metro Rod franchisees and their teams were recognised and rewarded for their considerable achievements, with the highly-coveted ‘Franchisee of the Year 2018’ award presented to Graeme and Avril Stevenson of Metro Rod Manchester South and Central. Peter Molloy said: “Graeme and Avril have delivered exceptional levels of service during the last year which has resulted in spectacular growth in sales and in the size of their business. I am personally delighted for Graeme and Avril. They are exactly the type of franchisees we want in our business. They embrace the support from the franchisor while using their own entrepreneurial skills to build a great business in their territory”. During the conference, all franchisees had the opportunity to explore the expo hall which played host to a number of leading industry suppliers with interactive areas, live demonstrations of services and equipment plus several brand-new Metro Rod vans. The conference attracted a record number of sponsors with the official sponsor being iTouch Systems, a leading provider of CCTV inspection and reporting solutions. Chris Turner, Managing Director of iTouch Systems said: “This was the best Metro Rod conference we have ever attended! There was a tremendous atmosphere throughout and all the franchisees were very positive about the future. iTouch Systems was thrilled to be the principal sponsor of the event and we had a great response on the stand and subsequently, with a number of franchisees taking advantage of the opportunity to invest further in their businesses”. Stephen Hemsley, Chairman, Franchise Brands plc concluded by saying: “Our franchisees are the bedrock of our business and I applaud their passion, commitment and entrepreneurial flair. Metro Rod has enjoyed an incredible year and the business is going from strength to strength. The achievements on display demonstrate how the combined efforts of hard-working and motivated franchisees and dedicated Support Centre teams, together with the investment Franchise Brands is making in the business, can produce great results”. Metro Rod Aberdeen expand into 2018 - 26-January-2018 Just a handful of months after taking over the Metro Rod Aberdeen area, Nick and Angela Langan, who also run hugely successful safety and compliance business ‘Safetest Compliance Services’, have started 2018 as they mean to go on, with expansion into Dundee and Perth, and the Highlands and Islands areas. Since becoming the new owners of Metro Rod Aberdeen last September, Nick and Angela got straight to work implementing a substantial marketing campaign, which made a fantastic impact locally with their business going from strength to strength. Never ones to rest on their laurels, the ambitious pair decided the time was right just before Christmas, to expand their venture, and will now be known as ‘Metro Rod North Scotland’ due to the vast area they are now able to service! To ensure they are able to keep up with demand and deliver the most effective and efficient drainage maintenance and repair service they can, Nick and Angela have also expanded their service offering to include a tanker, which will be able to help with flood relief, emptying road gullies and de-silting, as well as jetting operations on larger sewers. Nick also has plans to grow the team, employing more local engineers and taking on two extra vans. “We have invested heavily in the latest equipment so that our professionally trained engineers have everything they need to be able to do a thorough job and ensure our customers are always delighted with the service provided!” enthuses Nick. From drainage repair and gutter clearance, to services involving specialist equipment such as CCTV surveys, high-pressure jetting and tanker services to clear localised flooding, as well as pre-planned maintenance offerings, Metro Rod North Scotland tailor their offering depending on what the client requires, and always offer a free visitation and assessment with any potential new client. Nick, Angela and their team of highly-experienced drainage engineers, are all extremely excited about what the future holds and can’t wait to get to work helping local businesses and homeowners alike with any drainage repair and maintenance they may need, 24 hours of the day, 365 days of the year! New Year, New Metro Rod! - 16-January-2018 2018 is definitely set to be the most exciting year yet for leading drainage repair and maintenance company Metro Rod! Since being purchased by Franchise Brands plc back in April 2017, it’s been non-stop. Franchisee visits with each member of the Metro Rod network have been conducted - seeking their feedback and input into the development of Metro Rod going forward, and this has been fed into a significant growth strategy, which is being implemented with immediate effect. One particular focus for the brand is Marketing, whereby a total overhaul of all marketing collateral is being undertaken. Not only does this include promotional materials such as leaflets and brochures, but also the website, which has basically been built again from scratch. This now means it is not only mobile-friendly, but also ensures it is ahead of the game in terms of SEO - making sure it is easily navigable, and as simple as possible for customers to do business with Metro Rod. As well as this, new van and tanker designs were unveiled at the recent annual conference, held at The Celtic Manor in November, which the network were all hugely positive about! Many of whom are also now investing heavily in updating their van livery with the eye-catching branding, which is certainly set to stand out on the nation’s roads! Further large-scale investment is being made into the IT infrastructure, with the initial focus being on automating the process of handling customer work requests, which will benefit customers by enabling Metro Rod’s engineers to get to the problems even faster. The franchisees are also set to benefit from the creation of a new management information system, which will provide them with fast access to accurate information, enabling them to make decisions which improve their business and provide better services to their customers, 24 hours a day, 365 days a year. Commenting on the developments, Managing Director Peter Molloy, concludes: “We want to put our customers at the centre of everything we do here at Metro Rod, so it is vital that we devote our attention to what matters to them, and in essence, ensure they have the best experience possible. The progress we have been making in Marketing and IT will really enable us to grow the brand and deliver exception customer service, which is extremely important to us! 2018 is certainly set to be a truly very exciting year indeed!” Metro Rod celebrates at inaugural Conference and Awards ceremony 2017 - 21-November-2017 Franchisees, employees and suppliers from across the country all congregated last weekend at 5* resort – The Celtic Manor, for the much-anticipated Metro Rod conference and awards ceremony, sponsored by iTouch. This was the first of its kind under the ownership of Franchise Brands plc, and one which many have commented will ‘go down in history as the best ever’! Peter Molloy, Metro Rod Managing Director, kicked off the presentations – unveiling some exciting new plans for the future and key changes in the way the business will be run going forward – with the over-riding theme being ‘Focused on what makes a difference’. Further presentations included a marketing update from Marketing Director, Robin Auld and Head of Marketing, Ella Pugh, who revealed some very impressive strategies for 2018, as well as sharing the updated branding they’ve been working on, not to mention the re-design of the vans, two of which were there for all to see and vote upon! Chief Information Officer, Colin Rees also took to the stage to share the plans for the substantial investment being made into restructuring the IT systems over the next few years, which will ensure Metro Rod can keep ahead of the game when it comes to providing a top-class service to its customers. Key industry suppliers took part in a fantastic vendor show, where they had chance to exhibit their wares throughout the day, and the franchisees had the opportunity to find out about the latest developments in the drainage industry! The celebrations continued on into the evening at an Awards Dinner, where top performing Metro Rod franchisees were recognised and rewarded for their achievements. The highly-coveted ‘Franchisee of the Year 2017’ award went to Roy Dean of Metro Rod Deeside, who has been with the network since 2012. “Roy has always operated with the utmost professionalism and has achieved extremely strong results in all areas of his business. He and his team of over 10 employees are very worthy winners of this prestigious award – always putting the customer first in everything they do, so I’m thrilled to be able to recognise his achievements in this way!” comments Peter. A collection was also made in aid of Wateraid, raising a fantastic £1,500, which will go towards helping to provide clean water, toilets and good hygiene to the millions of people around the world in need of these basic but essential facilities. Last, but by no means least, came a fantastic presentation for Metro Rod founder Gillian Walker, who started the business over 30 years ago now, and is due to retire at the end of November. Not only were gifts given from the staff and franchisees, as well as a tribute from the bfa for her outstanding contribution to franchising, but a new plaque was also unveiled to honour everything Gill has given the business over the years, all rounded off by a standing ovation! Needless to say, there wasn’t a dry eye in the house! Metro Rod Franchise News Feed Last updated: 06-March-2020
