AIM:FRAN

Stock Analysis Report

Executive Summary

Franchise Brands plc engages in franchising and related activities primarily in the United Kingdom.

Rewards

Trading at 39.8% below its fair value

Earnings are forecast to grow 31.67% per year

Earnings grew by 104.1% over the past year

Risk Analysis

No risks detected for FRAN from our risk checks.


Snowflake Analysis

Flawless balance sheet with solid track record.

Share Price & News

How has Franchise Brands's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FRAN has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.4%

FRAN

1.7%

GB Consumer Services

2.3%

GB Market


1 Year Return

56.5%

FRAN

14.2%

GB Consumer Services

10.7%

GB Market

Return vs Industry: FRAN exceeded the UK Consumer Services industry which returned 14.2% over the past year.

Return vs Market: FRAN exceeded the UK Market which returned 10.7% over the past year.


Shareholder returns

FRANIndustryMarket
7 Day1.4%1.7%2.3%
30 Day0.9%-2.1%2.3%
90 Day30.9%-1.5%2.5%
1 Year57.9%56.5%15.7%14.2%16.5%10.7%
3 Year65.8%62.4%6.7%0.9%21.3%5.9%
5 Yearn/a-43.5%-58.7%41.1%8.7%

Price Volatility Vs. Market

How volatile is Franchise Brands's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Franchise Brands undervalued compared to its fair value and its price relative to the market?

39.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: FRAN (£1.08) is trading below our estimate of fair value (£1.8)

Significantly Below Fair Value: FRAN is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: FRAN is poor value based on its PE Ratio (32.2x) compared to the Consumer Services industry average (13.8x).

PE vs Market: FRAN is poor value based on its PE Ratio (32.2x) compared to the UK market (17.6x).


Price to Earnings Growth Ratio

PEG Ratio: FRAN is poor value based on its PEG Ratio (1x)


Price to Book Ratio

PB vs Industry: FRAN is overvalued based on its PB Ratio (3.3x) compared to the GB Consumer Services industry average (2.7x).


Next Steps

Future Growth

How is Franchise Brands forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

31.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FRAN's forecast earnings growth (31.7% per year) is above the savings rate (0.5%).

Earnings vs Market: FRAN's earnings (31.7% per year) are forecast to grow faster than the UK market (12.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: FRAN's revenue (28.5% per year) is forecast to grow faster than the UK market (3.5% per year).

High Growth Revenue: FRAN's revenue (28.5% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if FRAN's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Franchise Brands performed over the past 5 years?

37.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FRAN has high quality earnings.

Growing Profit Margin: FRAN's current net profit margins (6.7%) are higher than last year (3.9%).


Past Earnings Growth Analysis

Earnings Trend: FRAN's earnings have grown significantly by 37.5% per year over the past 5 years.

Accelerating Growth: FRAN's earnings growth over the past year (104.1%) exceeds its 5-year average (37.5% per year).

Earnings vs Industry: FRAN earnings growth over the past year (104.1%) exceeded the Consumer Services industry 52.7%.


Return on Equity

High ROE: FRAN's Return on Equity (10.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Franchise Brands's financial position?


Financial Position Analysis

Short Term Liabilities: FRAN's short term assets (£15.3M) exceed its short term liabilities (£13.1M).

Long Term Liabilities: FRAN's short term assets (£15.3M) exceed its long term liabilities (£5.4M).


Debt to Equity History and Analysis

Debt Level: FRAN's debt to equity ratio (28.8%) is considered satisfactory.

Reducing Debt: FRAN had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: FRAN's debt is well covered by operating cash flow (41.7%).

Interest Coverage: FRAN's interest payments on its debt are well covered by EBIT (12.5x coverage).


Balance Sheet

Inventory Level: FRAN has a low level of unsold assets or inventory.

Debt Coverage by Assets: FRAN's debt is covered by short term assets (assets are 2.1x debt).


Next Steps

Dividend

What is Franchise Brands's current dividend yield, its reliability and sustainability?

0.62%

Current Dividend Yield


Dividend Yield vs Market

company0.6%marketbottom25%1.9%markettop25%5.1%industryaverage1.9%forecastin3Years1.0%

Current dividend yield vs market & industry

Notable Dividend: FRAN's dividend (0.62%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.9%).

High Dividend: FRAN's dividend (0.62%) is low compared to the top 25% of dividend payers in the UK market (5.09%).


Stability and Growth of Payments

Stable Dividend: FRAN is not paying a notable dividend for the UK market, therefore no need to check if payments are stable.

Growing Dividend: FRAN is not paying a notable dividend for the UK market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: FRAN is not paying a notable dividend for the UK market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of FRAN's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

What is the CEO of Franchise Brands's salary, the management and board of directors tenure and is there insider trading?

2.3yrs

Average management tenure


CEO

Franchise Brands has no CEO, or we have no data on them.


Management Age and Tenure

2.3yrs

Average Tenure

52yo

Average Age

Experienced Management: FRAN's management team is considered experienced (2.3 years average tenure).


Board Age and Tenure

3.4yrs

Average Tenure

56yo

Average Age

Experienced Board: FRAN's board of directors are considered experienced (3.4 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUK£72,50012 Apr 19
David Poutney
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares100,000
Max PriceUK£0.72

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Stephen Hemsley (61yo)

    Executive Chairman

    • Tenure: 3.3yrs
    • Compensation: UK£100.00k
  • Robin Auld (46yo)

    Group Marketing Director

    • Tenure: 9.9yrs
    • Compensation: UK£28.56k
  • Colin Rees (49yo)

    Chief Information Officer & Director

    • Tenure: 1.8yrs
    • Compensation: UK£64.26k
  • Chris Dent (38yo)

    CFO & Director

    • Tenure: 0yrs
    • Compensation: UK£109.80k
  • Tim Harris (55yo)

    Director & MD of ChipsAway and Ovenclean

    • Tenure: 3.4yrs
    • Compensation: UK£129.43k
  • Julia Choudhury (52yo)

    Corporate Development Director & Director

    • Tenure: 3.4yrs
    • Compensation: UK£85.00k
  • Mark Peters

    Company Secretary

    • Tenure: 0yrs
  • Peter Molloy (57yo)

    Director & MD of Metro Rod

    • Tenure: 1.8yrs
    • Compensation: UK£102.11k
  • Rachel Stewart

    Managing Director of Barking Mad Ltd

    • Tenure: 0.4yrs
  • Ian Lawrence

    Managing Director of Willow Pumps

    • Tenure: 0.2yrs

Board Members

  • Nigel Wray (71yo)

    Non-Executive Director

    • Tenure: 3.4yrs
    • Compensation: UK£20.00k
  • Stephen Hemsley (61yo)

    Executive Chairman

    • Tenure: 3.3yrs
    • Compensation: UK£100.00k
  • David Poutney (66yo)

    Non-Executive Director

    • Tenure: 3.4yrs
    • Compensation: UK£25.00k
  • Colin Rees (49yo)

    Chief Information Officer & Director

    • Tenure: 1.8yrs
    • Compensation: UK£64.26k
  • Chris Dent (38yo)

    CFO & Director

    • Tenure: 0yrs
    • Compensation: UK£109.80k
  • Rob Bellhouse

    Independent Non-Executive Director

    • Tenure: 3.4yrs
    • Compensation: UK£25.00k
  • Tim Harris (55yo)

    Director & MD of ChipsAway and Ovenclean

    • Tenure: 3.4yrs
    • Compensation: UK£129.43k
  • Julia Choudhury (52yo)

    Corporate Development Director & Director

    • Tenure: 3.4yrs
    • Compensation: UK£85.00k
  • Peter Molloy (57yo)

    Director & MD of Metro Rod

    • Tenure: 1.8yrs
    • Compensation: UK£102.11k

Company Information

Franchise Brands plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Franchise Brands plc
  • Ticker: FRAN
  • Exchange: AIM
  • Founded: 2008
  • Industry: Specialized Consumer Services
  • Sector: Consumer Services
  • Market Cap: UK£85.848m
  • Shares outstanding: 79.49m
  • Website: https://www.franchisebrands.co.uk

Number of Employees


Location

  • Franchise Brands plc
  • Ashwood Court
  • Tytherington Business Park
  • Macclesfield
  • Cheshire
  • SK10 2XF
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FRANAIM (London Stock Exchange AIM Market)YesOrdinary SharesGBGBPAug 2016

Biography

Franchise Brands plc engages in franchising and related activities primarily in the United Kingdom. It provides vehicle repair services, which comprise bumper scuffs, paintwork scratches, minor dents, and  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/13 22:11
End of Day Share Price2019/12/13 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.