Market's view on Franchise Brands
Published on April 2024
- Franchise Brands has scheduled an Annual General Meeting and Q1 trading update, highlighting strong momentum from B2B divisions and robust performance in North America. The acquisition of Pirtek Europe is discussed as transformational, aiming to make the group a market-leading international B2B multi-brand franchisor.
- The acquisition of Pirtek Europe for £200 million is highlighted as a significant growth opportunity, providing a low-cost platform for launching current brands into new markets and potentially leveraging central services more efficiently.
- Concerns are raised about the large fundraise impacting the share price, with further discussions about the debt taken on at a high interest rate and its implications.
- Franchise Brands’ acquisition strategy, including the recent purchase of Pirtek Europe, is viewed by some as potentially risky, considering the high price paid relative to earnings and the subsequent increase in debt.
- Stock watchers discuss the valuation and future earnings potential of Franchise Brands post-acquisition, considering the impact of new shares issued and the expected performance contributions from Pirtek.
- There is a general anticipation for the full-year results of a company, with expectations of a turnover of £163 million and an adjusted EPS of 8.6p. Concerns are noted about the lack of a specified announcement date compared to the previous year.