Macclesfield-based Franchise Brands published interim results today which showed the impact the coronavirus lockdown had on the AIM-listed group.
A strong first quarter was in marked contrast to a weaker second quarter, although trading did begin to recover from June.
Half year figures to June 30, revealed a 21% increase in revenues to £24.2m.
But pre-tax profits were halved, to £900,000, reflecting the effects of lockdown on the business.
The multi-brand franchising group has a combined network of nearly 450 franchisees across five franchise brands, and is organised into a business to business (B2B) division, comprised Metro Rod, Metro Plumb and Willow Pumps, and a business to customer (B2C) division, which incorporates ChipsAway, Ovenclean and Barking Mad.
Following a successful placing in April raising £13.6m, the group’s strengthened balance sheet will allow it to take advantage of both organic growth opportunities and earnings-enhancing acquisitions as the lockdown eases.
Today’s results show adjusted net cash of £4.2m at June 30, against a £9.2m adjusted net debt at December 31, 2019, following the April placing.
The 0.30p per share interim dividend has been maintained.
During the reporting period Metro Rod system sales grew by 16% year-on-year in the first quarter, before declining by three per cent in the second quarter. That compared with 15% first half growth for the comparative period last year.
The business said 28 of its 43 Metro Rod franchisees achieved year-on-year growth in sales over the first half.
In the B2C division, it showed franchise recruitment of 18 in the first quarter and nine in June, against 34 in the 2019 first half period.
Executive chairman, Stephen Hemsley, said: “I am pleased with our robust H1 performance which featured a strong first quarter followed by a period of tight cost control during the lockdown period.
“This highlights the underlying resilience of our business model, underpinned by our network of 435 franchisees supporting a broad range of commercial and domestic customers, and is thanks to the hard work and adaptability of my colleagues, our franchisees and, particularly, our engineers during this challenging period.”
He added: “Following a successful placing, our strengthened balance sheet will allow us to take advantage of both organic growth opportunities and earnings-enhancing acquisitions as the lockdown eases.”