TIDMFRAN
RNS Number : 2615A
Franchise Brands PLC
23 March 2017
23 March 2017
FRANCHISE BRANDS PLC
("Franchise Brands", the "Company" or the "Group")
Final results for the year ended 31 December 2016
Franchise Brands plc, a multi-brand international franchisor, is
pleased to announce its full year results for the year ended 31
December 2016.
Financial highlights:
-- Total revenue up 11% to GBP4.87m (2015: GBP4.38m)
-- Underlying profit before tax, after adjusting for
non-recurring IPO and acquisition costs, increased by 11% to
GBP1.24m (2015: GBP1.12m)
-- Profit before tax was GBP784,000 (2015: GBP1.12m)
-- Adjusted earnings per share of 2.40p (2015: 2.44p)*
-- Basic earnings per share of 1.28p (2015: 2.44p)*
-- Cash generated from operations of GBP1.11m (2015: GBP1.25m)
-- Cash balance at 31 December 2016 of GBP3.00m (2015: GBP0.50m)
-- Maiden final dividend of 0.17p per share recommended (2015:
nil) - payable on 28 April 2017 to shareholders on the register on
7 April 2017; the ex dividend date is 6 April 2017
* calculated on the basis of the weighted number of shares
outstanding during the year
Operational highlights:
-- Admission of Franchise Brands to AIM on 5 August 2016 raising a net GBP2.9m
-- Acquisition of Barking Mad on 31 October 2016 which marked
the Group's first acquisition since IPO
-- Appointed David Poutney and Rob Bellhouse as independent non-executive directors
-- Total number of UK franchisees across all brands increased from 364 to 389 in the year**
-- 69 franchises were sold in the period (2015: 58)
** including Barking Mad on a pro-forma basis
Proposed c.GBP28m acquisition of Metro Rod announced separately
today:
-- A leading provider of drain clearance and maintenance services with 40 Franchisees
-- Reported profit before tax and exceptional items of GBP3.2m
in the year to 30 April 2016, a circa 52% increase compared to the
year ended 30 April 2014
o Profit before tax was GBP2.4m after exceptional items***
-- Directors believe it will be significantly earnings enhancing
-- To be funded by an intended GBP20m share placing and new bank facilities of up to GBP17m
-- Constitutes a reverse takeover and is subject to shareholder approval
*** exceptional items included GBP639,000 related to the
impairment of intangible fixed assets, a GBP127,000 loss incurred
on franchisee closure and redundancy costs GBP11,000
Current trading and outlook:
-- Trading is in line with management expectations at the start of 2017
-- The integration of Barking Mad is progressing well
-- 2017 promises to be a year of further transformation and growth
Stephen Hemsley, Executive Chairman, commented
"2016 has been a successful and eventful year with the Group's
IPO putting the Company in a position to make selective,
complementary acquisitions of franchise businesses that could
benefit from our central services, including marketing expertise
and franchising experience.
"Our first acquisition of Barking Mad, the leading franchise
provider of professionally-organised dog sitting services in the
UK, is already starting to benefit from our shared support services
and our Ovenclean and ChipsAway businesses have performed well. As
a result, we are pleased to be able to recommend a maiden dividend
in recognition of our confidence in the business model.
"We have announced separately today the proposed acquisition of
Metro Rod, a leading provider of drain clearance and maintenance
services, which represents a transformational step in implementing
the Group's buy and build strategy and an attractive opportunity to
enter the B2B franchising market at a size, scale and price that we
believe will be significantly earnings enhancing.
"These acquisitions, our strengthened management team and Board
and the entrepreneurial skill of our franchisees mean we are in a
strong position to further develop this great business and we look
forward to 2017 which promises to be a further year of further
transformation and growth."
- Ends -
For further information, please contact:
Franchise Brands plc + 44 (0) 800 012 6462
Stephen Hemsley, Executive Chairman
Tim Harris, Chief Executive Officer
Julia Choudhury, Corporate Development Director
MHP Communications +44 (0) 20 3128 8794
(Financial PR)
franchisebrands@mhpc.com
Katie Hunt / Hannah Winter
Allenby Capital Limited +44 (0) 20 3328 5656
(Nominated Adviser and Joint Broker)
Jeremy Porter/ James Thomas / Liz Kirchner
Dowgate Capital Stockbrokers +44 (0)1293 517744
(Joint Broker)
James Serjeant / Neil Badger
Chairman's statement
In my first Chairman's Statement since our IPO in August 2016 I
would like to welcome our new shareholders. I would also like to
recognise our original shareholders from the formation of the
Company in 2008, who have not only all stayed with us, but in many
cases added to their investment in the Company at the IPO. Thank
you all for your support.
The main purpose of the IPO was to put the Company in a position
to make complementary acquisitions of other franchise businesses
using a combination of cash and, most importantly, quoted paper.
The management team at Franchise Brands, whilst very experienced,
is small and it was therefore vital that any acquisition brought
with it talented and committed management. I believe that such
management would only be attracted to the opportunity offered by
joining Franchise Brands if part of the consideration was paid in
marketable equity that allowed them to share in the rewards of
further growing their businesses.
Another key-objective of the IPO was to allow our long-serving
team members and franchisees, who are vital to our future growth,
the opportunity to participate in the ownership of the Company. As
a result all Franchise Brands team members employed at the time of
the IPO are now shareholders or option holders. This is an
opportunity we will be offering to team members of the businesses
we acquire in the future. I am also pleased to report that a number
of franchisees subscribed for shares in the offer made to them.
Overall, the IPO raised GBP2.87 million (net of expenses) which,
combined with the highly cash generative nature of our business,
gave us the capability to pursue a number of acquisition
opportunities we had been considering. The first was completed in
October 2016, with the acquisition of Barking Mad, the leading
franchise provider of professionally-organised dog sitting services
in the UK.
As part of this acquisition, we are delighted to welcome Lee
Dancy, Barking Mad's founder and Managing Director, to our senior
management team. Lee and her husband received a consideration of
GBP900,000 for their business, of which GBP400,000 was paid in
Franchise Brands shares at the price prevailing at completion.
Our second proposed acquisition has just been announced. We have
agreed, subject to shareholder approval, to acquire Metro Rod
Limited, a leading provider of drain clearance and maintenance
services, which are delivered on a predominately reactive basis by
40 regional franchisees. The total consideration for this
acquisition will be GBP28 million (subject to adjustment based on
the financial position of Metro Rod Limited at completion), which
together with estimated costs of GBP1.8 million, will be satisfied
in cash at completion.
It is proposed that the consideration, associated costs and
additional working capital will be funded by the issue of new
Ordinary Shares to raise GBP20 million and bank facilities of up to
GBP17 million. Given the scale of the proposed acquisition when
compared to the existing Group, the transaction is considered under
the AIM Rules to be a Reverse Takeover and therefore requires us to
issue a new Admission Document and seek Shareholders approval at a
General Meeting scheduled for 10 April 2017.
I am pleased to confirm that the new equity fund raising will
once again be well supported by your Board, with approximately
GBP12 million of the GBP20 million required being committed by
Board members and their associates. As part of the fund raising,
Nigel Wray, my founding partner, and I will each be subscribing
GBP5 million. I am also pleased to confirm that the existing senior
management of Metro Rod Limited will be staying with the business,
joining the Franchise Brands leadership team and will be investing
in the fund raising. Full details are presented in the new AIM
Admission Document which will be sent to shareholders today.
The Directors believe the acquisition represents a
transformational step in respect of implementing the Group's stated
buy and build strategy. In particular, the Directors believe the
Acquisition represents an opportunity to enter the B2B franchising
market at a size and scale that is attractive strategically and at
an acquisition price that the Directors consider is significantly
accretive to Shareholders. Furthermore, the Directors believe the
range of potential future acquisition opportunities for the Group
is likely to be increased as a result of the Acquisition, as both
the B2B and B2C franchise sectors would be within its scope. The
Directors also believe the Acquisition is likely to lead to an
enhanced range of shared services within the Group which have the
capability to be leveraged across its range of brands and
furthermore, will potentially allow the Group to optimise some
activities that were previously sub-scale.
The Directors propose a dividend of 0.17 pence in respect of the
year ended 31 December 2016. We recognise the importance of
dividend income to Shareholders and, subject to the availability of
distributable reserves, the retention of funds required to finance
future growth of the Enlarged Group, both organically and by
acquisition, and such other factors which the Directors may from
time-to-time deem relevant, anticipate paying a regular dividend.
Our results, trading and outlook are detailed within the Financial
Review. At the same time, the Directors consider the social,
ethical and environmental impact of Group activities in line with
its Corporate Social Responsibilities.
2016 has seen a strengthening of the Group's Board. I would like
to welcome David Poutney and Rob Bellhouse as independent
Non-Executive Directors. David brings with him a wealth of
experience in capital markets, having until recently been Head of
Corporate Broking at Numis Securities.
Rob is a very experienced corporate governance professional,
having been Company Secretary at several FTSE 100 and 250
companies.
The wisdom and experience they bring to our Board will be of
tremendous value as we grow the Group.
Andrew Mallows joined the Board prior to the IPO as Finance
Director of the Group. Following a short break, he has now returned
as part-time Finance Director of the ChipsAway, Ovenclean and
Barking Mad brands. I would also like to welcome Paul Below, an
experienced interim CFO, who has recently joined us in the Group
role to assist with the current acquisition and reverse takeover.
We will be recruiting his permanent replacement in due course.
Finally, I would like to thank and pay tribute to our
franchisees who are the backbone of our business.
Their entrepreneurial skill and application in delivering the
Group's brands to our customers each and every day is what sets us
apart from our competition. I would also like to recognise and
thank our team members for the great job they do in supporting our
franchisees. It is this teamwork and mutual support that is
allowing us to further develop this great business.
Stephen Hemsley
Executive Chairman
Financial review
The year ended 31 December 2016 has been both a successful and
eventful year for your Company. We have become a publicly quoted
company, made our first acquisition since the IPO, repaid all the
original shareholders' loans and embarked on a further
transformational acquisition that we hope to complete in April
2017. We are also proposing to pay a small dividend in recognition
of our confidence in the business model.
Sales
In the year ended 31 December 2016 statutory revenue increased
11 per cent to GBP4,870,000 (2015: GBP4,379,000). Statutory revenue
includes management service fees ("MSF") received from franchisees
on a monthly basis (41 per cent of Franchise Brand's revenues);
fees generated from the sale of franchise territories (30 per cent
of revenue); and income from the sale of products to franchisees,
mainly to ChipsAway franchisees used in the repair of vehicles (19
per cent of revenue) and other income including national accounts
sales (9 per cent of revenue). The ChipsAway brand currently
generates approximately 80 per cent of total revenue with most of
the balance generated by Ovenclean in 2016, although this will
obviously change in 2017 following the acquisition of Barking
Mad.
The MSF income and that generated from the sale of product to
the franchisees, which represents 61 per cent of our income, is
dependent on the number of franchisees in the system and the sales
revenue they generate. In the year to 31 December 2016, the number
of UK franchisees in the Group (excluding Barking Mad) grew from
307 to 320. Including Barking Mad on a pro-forma basis the number
grew from 364 to 389. Whilst the improvement may seem small, it
represents good progress in stabilising the system after an
extended period of decline that resulted from our efforts to
improve the quality (rather than quantity) of the franchisees that
operate our brands.
The revenue generated from the sale of franchise territories is
primarily driven by the recruitment of new franchisees into new
virgin territories. However, an important part of this activity is
also re-selling the territories of franchisees who leave the system
and selling additional franchise territories to existing
franchisees who wish to expand their businesses.
In 2016, 69 franchises were sold of which 62 were new
territories sold to new franchises, 7 were new territories sold to
existing franchisees. We consider that the mix of the franchise
sales to both new and existing franchisees to be a good indication
of the health and viability of the system.
Cost of Sales and Gross Profit
The rate of growth of gross profit exceeded the growth in
revenue as a result of lower cost of sales achieved through
efficiency in franchisee launches. This resulted in gross profit
increasing in the year by 14 per cent to GBP3,298,000 (2015:
GBP2,892,000). Cost of sales includes the cost of product sold to
franchisees and the launch cost of new franchisees.
Trading Results
Administrative expenses increased by GBP737,000 from
GBP1,770,000 to GBP2,507,000. These included GBP455,000 of
non-recurring costs. Other costs increased by GBP282,000. Overheads
included staff costs (42 per cent), sales and marketing costs
incurred in recruiting new franchisees (17 per cent) and
establishment expenses (6 per cent). Operating profit was
GBP791,000 (2015: GBP1,122,000).
During 2016 the Group continued to trial the MyHome brand to
establish if a full relaunch would be economically worthwhile. The
total costs incurred in 2016 were GBP92,000. We concluded that a
full re-launch of the domestic cleaning business would not be in
our shareholders long-term interest and these costs will therefore
not recur in future years. Our research did however, highlight
other opportunities in the domestic services sector, particularly
for small repairs and maintenance. To test this opportunity we have
a single franchisee operating under the brand "The Handyman Van"
using similar branding to MyHome. This test will be cost neutral
for the Group.
Barking Mad was acquired on 31 October 2016 and the results for
the two months to 31 December 2016 are included within the
consolidated accounts. Barking Mad incurred a small loss of
GBP12,000 in this period due to the seasonality of its recruitment
income.
Non-Recurring Items
Non-recurring costs include the element of the costs incurred in
the IPO that were written off against profits of GBP397,000. A
further GBP233,000 was set off against the share premium arising on
the issue of the new shares, bringing the total IPO costs to
GBP630,000. The balance of the non-recurring costs related to costs
of GBP58,000 incurred in the acquisition of Barking Mad.
Earnings and Dividend
Profit before tax in the year was GBP784,000 (2015:
GBP1,115,000). The tax charge in 2016 represented 33.2 per cent
(2015: 20.4 per cent) of profit before tax, which is greater than
the statutory rate of 20 per cent because of certain costs being
disallowable for tax, in particular, the non-recurring costs of the
IPO and the acquisition. If adjustment is made for these
non-recurring costs, underlying profit before tax would have
increased by 11 per cent to GBP1,239,000 (2015: GBP1,115,000) and
the tax charged would have fallen to 21 per cent.
Profit for the year was GBP524,000 (2015: GBP888,000), and the
average number of shares in issue during the year were 40,837,885
(2015: 36,324,429), resulting in basic earnings per share of 1.28
pence (2015: 2.44 pence). Based on adjusted profit after tax of
GBP979,000, earnings per share in 2016 would have been 2.40 pence
per share (2015: 2.44 pence).
The Board is pleased to propose a dividend of 0.17 pence per
share (2015: Nil). This represents a pro-rata dividend in respect
of the five month period since the IPO. Had the Company been a
public company for the whole year the dividend recommendation would
have been 0.41 pence per share.
The cost of the proposed dividend of GBP81,000 is 12.1 times
covered by adjusted profit after tax of GBP979,000. Subject to the
needs of the business and compliance with any future banking
covenants, it is the intention of the Directors to adopt a
progressive dividend policy with the cost of any dividend being
approximately five times covered by profit after tax.
Balance Sheet
The balance sheet of the Group has strengthened significantly
over the last twelve months following another year of successful
and cash generative trading, the fund raising at the IPO and the
subsequent acquisition of Barking Mad.
The Group started the year with net liabilities of GBP380,000,
funded by interest-free shareholder loans totalling GBP1,764,000.
The cash generation of the business and a structured interest
bearing loan of GBP500,000 from companies owned by Nigel Wray and
me, allowed the shareholders loans that were originally put in
place to fund the acquisition of the original businesses, to be
repaid in full immediately prior to the IPO.
Cash generated from operations in the year was GBP1,112,000
(2015: GBP1,246,000).
The IPO raised gross proceeds of GBP3,500,000, which after
expenses of GBP630,000 netted the Company GBP2,870,000. In October
2016 the Company acquired Barking Mad for a total consideration of
GBP900,000, of which GBP500,000 was settled in cash and the
remainder by the issue of 761,193 shares at the then market price
of 52.5 pence per share.
At 31 December 2016 the Group was in a very strong position,
with net assets of GBP3,903,000 (2015: net liabilities GBP380,000)
of which cash in hand totalled GBP2,999,000 (2015: GBP496,000) and
debt of GBP519,000 (2015: GBP1,905,000).
Current Trading and Prospects
Trading at the start of 2017 has been in line with management
expectations. The integration of Barking Mad into the Group is
progressing well and the business is beginning to benefit from our
shared support services particularly in the areas of marketing and
IT. The proposed acquisition of Metro Rod Limited will
significantly increase the size and scale of the Group and we are
looking forward to integrating this business into the Group. 2017
promises to be a further year of transformation and growth which we
are very much looking forward to.
Consolidated statement of comprehensive income
For the year ended 31 December 2016
2016 2015
Note GBP'000 GBP'000
Revenue 3 4,870 4,379
Cost of sales (1,572) (1,487)
============================================== ====== ============= ============
Gross Profit 3,298 2,892
------------- ------------
Administrative expenses before exceptional
costs (2,052) (1,770)
Costs of acquisition of subsidiary 4 (58) -
IPO costs 4 (397) -
------------- ------------
Total administrative expenses (2,507) (1,770)
Operating Profit 4 791 1,122
Finance income 2 1
Finance expense (9) (8)
============================================== ====== ============= ============
Profit before tax 784 1,115
Tax expense (260) (227)
============================================== ====== ============= ============
Profit for the year and comprehensive
income attributable to equity holders
of the parent company 524 888
------------------------------------------------------ ------------- ------------
All amounts relate to continuing operations
Earnings per share 5
Basic 1.28 2.44
Adjusted basic 2.40 2.44
Diluted 1.28 2.44
Adjusted
diluted 2.39 2.44
---------------------------------------------- ------ ------------- ------------
Consolidated statement of financial position
As at 31 December 2016
2016 2015
GBP'000 GBP'000
============================================== ================== ============
Assets
Non-current assets
Intangible assets 2,142 1,260
Property, plant and equipment 121 162
Trade and other receivables 112 115
=============================================== ================== ============
Total non-current assets 2,375 1,537
=============================================== ================== ============
Current assets
Inventories 193 170
Trade and other receivables 307 249
Cash and cash equivalents 2,999 496
=============================================== ================== ============
Total current assets 3,499 915
=============================================== ================== ============
Total assets 5,874 2,452
=============================================== ================== ============
Liabilities
Current liabilities
Trade and other payables 1,078 785
Loans and borrowings 167 1,764
Obligations under finance leases 29 35
Current tax liability 211 111
=============================================== ================== ============
Total current liabilities 1,485 2,695
=============================================== ================== ============
Non-current liabilities
Loans and borrowings 250 -
Obligations under finance leases 73 106
Deferred tax liability 163 31
=============================================== ================== ============
Total non-current liabilities 486 137
=============================================== ================== ============
Total liabilities 1,971 2,832
=============================================== ================== ============
Total net assets/(liabilities) 3,903 (380)
=============================================== ================== ============
Issued capital and reserves attributable
to owners of the parent
Share capital 239 120
Share premium 3,214 -
Share-based payment reserve 30 -
Merger reserve 396 -
Retained earnings/(deficit) 24 (500)
=============================================== ================== ============
Total equity/(deficit) attributable to equity
holders 3,903 (380)
=============================================== ================== ============
Consolidated statement of cash flows
For the year ended 31 December 2016
2016 2015
GBP'000 GBP'000
===================================================== ================ ============
Cash flows from operating activities
Profit for the year 524 888
Adjustments for:
Depreciation of property, plant and equipment 66 63
Amortisation of intangible fixed assets 10 -
Share-based payment expense 30 -
Finance income (2) (1)
Finance expense 9 8
Profit on sale of property, plant and equipment - (8)
Income tax expense 260 226
===================================================== ================ ============
897 1,176
(Increase)/decrease in trade and other receivables (31) 87
Increase in inventories (15) (61)
Increase in trade and other payables 261 44
===================================================== ================ ============
Cash generated from operations 1,112 1,246
Income taxes paid (203) (206)
===================================================== ================ ============
Net cash generated from operating activities 909 1,040
Cash flows from investing activities
Purchases of property, plant and equipment (10) (16)
Proceeds from sale of property, plant and
equipment - 11
Interest received 2 1
Acquisition of subsidiary, net of cash acquired (333) (83)
===================================================== ================ ============
Net cash used in investing activities (341) (87)
Cash flows from financing activities
Other loans - repaid (1,847) (1,470)
Other loans - received 500 -
Interest paid - other loan (6) -
Interest paid - finance leases (3) (8)
Share capital issued at IPO 3,500 -
Share capital issued on incorporation 62 -
Share issue expenses and other costs of IPO (233) -
Capital element of finance lease repaid (38) (31)
===================================================== ================ ============
Net cash generated from/(used in) financing
activities 1,935 (1,509)
Net increase/(decrease) in cash and cash equivalents 2,503 (556)
Cash and cash equivalents at beginning of
year 496 1,052
===================================================== ================ ============
Cash and cash equivalents at end of year 2,999 496
===================================================== ================ ============
Consolidated statement of changes in equity
Group Share Share Share-based Merger Retained Total
capital premium payment reserve earnings/ Equity
GBP'000 GBP'000 reserve GBP'000 (deficit) GBP'000
GBP'000 GBP'000
-------------- ----------- ------------------ ---------------------- ------------- ----------- ---------------
1 January 2015 120 - - - (1,388) (1,268)
Profit and
total
comprehensive
income
for the year - - - - 888 888
============== =========== ================== ====================== ============= =========== ===============
888 888
31 December
2015
and 1 January
2016 120 - - - (500) (380)
Profit and
total
comprehensive
income
for the year - - - - 524 524
============== =========== ================== ====================== ============= =========== ===============
Contributions
by
and
distributions
to owners - - - - 524 524
Exercise of
Share
Options in FB
Holdings
Limited 1 - - - - 1
Issue of
shares
on
incorporation 61 - - - - 61
Issue of
shares
on
acquisition
of
Barking Mad
Limited 4 - - 396 - 400
Costs of issue
of
new equity - (233) - - - (233)
Issue of
shares
at IPO 53 3,447 - - - 3,500
Share-based
payment
expense - - 30 - - 30
============== =========== ================== ====================== ============= =========== ===============
Total
contributions
by and
distributions
to owners 119 3,214 30 396 - 3,759
============== =========== ================== ====================== ============= =========== ===============
31 December
2016 239 3,214 30 396 24 3,903
============== =========== ================== ====================== ============= =========== ===============
2015 comparatives are based on the capital structure of the
previous holding company, FB Holdings Limited.
Notes forming part of the financial statements
For the year ended 31 December 2016
1. Basis of preparation of financial statements
While the financial information included in the annual financial
results announcement has been prepared in accordance with the
recognition and measurement principles of International Financial
Reporting Standards as endorsed for use in the European Union
(IFRSs), this announcement does not contain sufficient information
to comply with IFRSs.
The financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 December 2016
or 2015, but is derived from those accounts. Statutory accounts for
F B Holdings Limited for the year ended 31 December 2015 have been
delivered to the Registrar of Companies and those of Franchise
Brands plc for the year ended 31 December 2016 will be delivered
following the Company's annual general meeting.
The auditors have reported on those accounts; their reports were
unqualified and did not include references to any matters to which
the auditors drew attention by way of emphasis without qualifying
their reports.
Their reports for the year end 31 December 2016 and 31 December
2015 did not contain statements under s498 (2) or (3) of the
Companies Act 2006.
With the exception of the group reorganisation undertaken
immediately prior to the Group listing on AIM, which has been
accounted for as a group reconstruction, the consolidated financial
statements incorporate the results of business combinations using
the acquisition method. In the statement of financial position, the
acquiree's identifiable assets, liabilities and contingent
liabilities are initially recognised at their fair values at the
acquisition date.
The consolidated financial statements present the results of the
Company and its subsidiaries ("the Group") as if they formed a
single entity. Intercompany transactions and balances between Group
companies are therefore eliminated in full. Subsidiaries are fully
consolidated from the date on which control is transferred to the
Group and cease to be consolidated from the date on which control
is transferred out of the Group.
2. Segmental reporting
Management has determined that the Group has one operating
segment. This is based on the operating reports reviewed by the
Chief Executive Officer that are used to assess both performance
and strategic decisions. Management has identified that the Chief
Executive Officer is the chief operating decision maker in
accordance with the requirements of IFRS 8 'Operating
segments'.
Whilst the Group operates multiple franchise brands, across
various business sectors, the Board has concluded that the key
management and financial data used to manage them is the same, as
the key drivers are attributable to them being franchises rather
than the activity of the franchise.
All segment revenue and profit before taxation are attributable
to the principal activity of the Group.
3. Revenue
2016 2015
GBP'000 GBP'000
------------------ --------- ------------
Sale of services 3,861 3,508
Sale of goods 1,009 871
------------------ --------- ------------
4,870 4,379
------------------ --------- ------------
The 2015 comparatives have been adjusted to correct a
misallocation of GBP710,000 between the sale of goods and sale of
services.
An analysis of revenue by geographical market is given
below:
United Kingdom 4,821 4,332
Europe 19 19
Rest of the World 30 28
-------------------- ------ ---------
4,870 4,379
-------------------- ------ ---------
4. Operating profit
2016 2015
GBP'000 GBP'000
------------------------------------------- -------- --------
Operating profit is stated after charging:
Depreciation 66 63
Amortisation 10 -
Share-based payment expense 30 -
IPO costs 397 -
Costs of acquisition of subsidiary 58 -
Operating lease rentals 124 91
Auditor's remuneration:
Fees for audit of the Company and the
Group 15 10
Fees for the audit of subsidiaries 33 23
Other taxation services 15 10
------------------------------------------- -------- --------
In addition to the amount disclosed above, auditor's
remuneration of GBP75,000 in respect of corporate finance
activities and GBP22,000 in respect of other assurance services has
been included within share issue costs and has been allocated
between the share premium and IPO costs.
During the year, the Company incurred significant costs
associated with both its admission to the Alternative Investment
Market (AIM) and its acquisition of Barking Mad Limited which are
not part of the usual course of business of Franchise Brands plc.
Costs charged in arriving at profit from operations amounted to
GBP397,000 and GBP58,000 respectively.
5. Earnings per share
Basic earnings per share amounts are calculated by dividing
profit for the year attributable to ordinary equity holders of the
parent 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 by the
weighted average number of Ordinary Shares outstanding during the
year plus the weighted average number or Ordinary Shares that would
have been issued on the conversion of all dilutive potential
Ordinary Shares into Ordinary Shares at the start of the period or,
if later, the date of issue.
Adjusted Earnings per share
During the year, the Group incurred significant exceptional
costs associated with the flotation of the Company and the
acquisition costs of Barking Mad. If these costs, of GBP397,000 and
GBP58,000 respectively, which were not deductible for corporation
tax, were added back and the resultant profit taxed at 20.5 per
cent being the Group's underlying tax rate, the profit attributable
would be GBP979,000.
Comparative earnings per share are calculated on the share
capital of Franchise Brands plc of 36,324,729 as if it had been the
parent company throughout 2015 and the share for share exchange for
12,171,344 shares of 1 pence each of the former holding company had
taken place as at 1 January 2015.
Earnings per share
2016 2015
GBP'000 GBP'000
-------------------------------------------- -------------------- --------
Profit attributable to owners of the parent
Exceptional Items 524 888
455 -
============================================ ==================== ========
Adjusted profit attributable to owners
of the parent 979 888
============================================ ==================== ========
Number Number
------------------------------------------ ----------------- --------------
Basic weighted average number of shares
Dilutive effective of share options 40,837,885 36,324,429
147,654 -
========================================== ================= ==============
Diluted weighted average number of shares 40,985,539 36,324,429
========================================== ================= ==============
Pence Pence
Basic earnings per share 1.28 2.44
Diluted earnings per share 1.28 2.44
Adjusted Earnings per share 2.40 2.44
Adjusted diluted earnings per share 2.39 2.44
==================================== ================ =================
6. Annual report and accounts
The annual report and accounts will be posted to shareholders
shortly and will be available to members of the public at the
Company's registered office at 5 Edwin Avenue, Hoo Farm Industrial
Estate, Kidderminster, Worcestershire, DY11 7RA and on the
Company's website today at
www.franchisebrands.co.uk/investor-relations.
7. Annual General Meeting
The first Annual General Meeting of Franchise Brands plc will be
held on 27 April 2017, notice of which will be sent to shareholders
with the annual report and accounts.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SELEFEFWSEDD
(END) Dow Jones Newswires
March 23, 2017 03:01 ET (07:01 GMT)
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