TIDMFRAN
RNS Number : 7816T
Franchise Brands PLC
29 November 2021
29 November 2021
FRANCHISE BRANDS PLC
("Franchise Brands", the "Group" or the "Company")
Acquisition of Azura Group Limited and change to total voting
rights
Franchise Brands (AIM: FRAN), a multi-brand franchisor, is
pleased to announce that it has acquired the entire issued share
capital of Azura Group Ltd ("Azura"), a leading franchise
management software system developer (the "Acquisition").
Having worked in partnership with Azura in recent years, the
Acquisition enables the Group to consolidate its software
development and secure ownership of the related intellectual
property ("IP") created to date, as well as bring Azura's skilled
team in-house. The Board also believes there is an opportunity to
use Franchise Brands' experience and expertise to grow Azura's
business, by improved development of its end-to-end franchise
management Software as a Service ("SaaS") platform, to enhance
sales to other franchise businesses in the UK and overseas.
Key highlights
-- Established in 1990, Azura is a leading franchise management
software system developer. Franchise Brands has partnered with
Azura since 2018 to develop and customise the "Vision" works
management system for Metro Rod and Metro Plumb which is built on
Azura's core system.
-- The Acquisition consolidates and secures Franchise Brands'
technology development and IP at a time when the Group is embarking
on a further, still more ambitious digital journey. The Acquisition
is in addition to the Group's announcement earlier in 2021 that an
additional GBP1.5m would be invested in systems development over
the next three years to automate as many processes and interactions
as possible.
-- A key part of the Group's strategy is to develop a common
technology platform across all its businesses that will enhance the
end-to-end customer experience and improve the efficiency and
productivity of its business, and franchisees. Azura will play a
key part in delivering this platform, which will result in enhanced
operational gearing.
-- The Board also believes that there is considerable scope to
develop and grow Azura's business through combining the Group's
expertise and experience in technology and marketing with Azura's
pre-eminent franchise management platform, to increase annual
revenue run-rate by marketing to new customers.
-- The gross consideration for the Acquisition is GBP1,000,000,
payable as GBP850,000 in cash and GBP150,000 in Franchise Brands
shares. It is warranted by the vendors that the cash in Azura's
balance sheet at completion will not be less than GBP175,000
resulting in a net consideration of GBP825,000.
-- Simon Pullum has agreed to continue as a Director, and Sean
McAree will continue as Software Architect. Azura will operate on
an arms-length basis within the Group.
-- The Board believes the Acquisition will be earnings enhancing
in the first full year following acquisition.
Stephen Hemsley, Executive Chairman of Franchise Brands,
said:
"I am delighted to announce the acquisition of Azura, which
represents an important step in the Group's digital journey. Given
the ever-increasing importance of technology to the Group and the
role Azura has played in the development of our "Vision" works
management system at Metro Rod and Metro Plumb, the acquisition of
Azura has a strong strategic and commercial rationale in that it
consolidates and secures our software development and key IP, as
well as bringing an excellent team."
"We also see an opportunity to grow Azura through combining
Franchise Brands' resources, expertise and experience with Azura's
pre-eminent franchise management SaaS platform to enhance sales to
other franchise businesses both in the UK and overseas."
Background to and further details of the Acquisition
Franchise Brands has partnered with Azura since 2018 to develop
and customise the "Vision" works management system for Metro Rod
and Metro Plumb which is built on Azura's core system. "Vision" was
successfully rolled out to the franchise network in 2020. "Vision"
and the associated customer portal "Connect", are currently being
optimised with a series of upgrades to further enhance
functionality. The next stage is to develop an enhanced engineer
interface and scheduling capability to further improve
productivity.
It is our ambition to develop a common technology platform
across all our businesses that will enhance the end-to-end customer
experience and improve the efficiency and productivity of our
business and our franchisees. In a time of labour supply
constraints, we are focused on improving the productivity of all
our people, and particularly our engineers, which will help ensure
our future growth is not held back by labour supply issues. This
improved productivity will also help insulate our business and that
of our franchisees from inflationary cost pressures. Azura will
play a key part in delivering the digital infrastructure that will
provide these benefits.
Details of Azura's business
Established in 1990, and originally a provider of mobile
workforce solutions, Azura is now focused almost exclusively on the
UK franchise sector. Since 2007, it has developed a proprietary
fully integrated, cloud-based, franchise management software system
specifically tailored and designed to the needs of franchise
businesses. Azura has a deep understanding of the franchise sector,
and its end-to-end solutions enable franchisors to focus more
exclusively on managing and growing their businesses.
Its core functionality includes a customer web portal, a full
CRM system, a franchise recruitment CRM, an integrated invoicing
and bookkeeping system, and intranet and mobile applications.
Franchisors benefit from improved efficiencies, reliability,
accessibility and compliance, flexibility and scaleability.
Azura has positioned itself as the partner of choice within the
franchising sector and works with more than 35 franchise networks.
Azura serves customers across a broad cross-section of franchise
categories, and has particular experience in the service-based,
van-based, domiciliary care and children's activity sectors.
Solutions are customised to the needs of each network. The system
is multi-lingual and can be used by franchisors in a number of
international markets.
Based on unaudited accounts, Azura's revenue for the year ended
30 April 2021 was GBP501,000 (2020: GBP526,000) and profit before
tax was GBP106,000 (2020: GBP65,000). Azura had net assets of
GBP265,000 as at 30 April 2021. Azura generates a significant level
of recurring revenue. Over 80% of revenues were from monthly
recurring fees.
The gross consideration will be satisfied by GBP850,000 in cash
from the Group's existing cash resources and GBP150,000 in
Franchise Brands shares, with a cash adjustment through completion
accounts resulting in a net consideration of GBP825,000. As a
result, 107,139 new ordinary shares of 0.5 pence each have been
issued ("Consideration Shares") at 140p per share, being the 5-day
volume-weighted average price of an ordinary share prior to
completion of the Acquisition. These shares will be issued equally
to Azura's founder and Managing Director, Simon Pullum, and his
wife, and Software Architect, Sean McAree, and will be subject to a
two-year selling restriction followed by an orderly market
arrangement for a further twelve months thereafter.
Issue of Equity and Total Voting Rights
Application has been made for the Consideration Shares to be
admitted to trading on AIM ("Admission"). Admission is expected to
occur on or around 2 December 2021. Following Admission, the total
number of ordinary shares of 0.5p each in the Company in issue will
be 95,865,609. The Consideration Shares will rank pari passu in all
respects with the existing ordinary shares and on Admission will
represent approximately 0.1 per cent. of the Company's issued share
capital.
There are no ordinary shares held in treasury and therefore the
total number of voting rights in the Company from Admission will be
95,865,609. This figure may be used by shareholders as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change to their
interest in, the Company under the FCA's Disclosure Guidance and
Transparency Rules.
Enquiries:
Franchise Brands plc + 44 (0) 1625 813231
Stephen Hemsley, Executive Chairman
Chris Dent, Chief Financial Officer
Julia Choudhury, Corporate Development
Director
Allenby Capital Limited (Nominated Adviser
and Joint Broker) +44 (0) 20 3328 5656
Jeremy Porter / Liz Kirchner (Corporate
Finance)
Amrit Nahal (Sales & Corporate Broking)
Dowgate Capital Limited (Joint Broker) +44 (0) 20 3903 7715
James Serjeant / Russell Cook / Nicholas
Chambers
MHP Communications (Financial PR) +44 (0) 20 3128 8100
Katie Hunt +44 (0) 7884 494112
franchisebrands@mhpc.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
ACQDKABBABDDFDB
(END) Dow Jones Newswires
November 29, 2021 01:59 ET (06:59 GMT)
Franchise Brands (LSE:FRAN)
Historical Stock Chart
From Mar 2024 to Apr 2024
Franchise Brands (LSE:FRAN)
Historical Stock Chart
From Apr 2023 to Apr 2024
