(Sharecast News) - Commercial fryer management provider Filta Group updated the market on its trading for 2019 on Thursday, saying it was expecting to report adjusted EBITDA of around ?3.2m on turnover of about ?25m for the 12 months ended 31 December.
The AIM-traded company said both its North America and mainland Europe operations delivered results in line with expectations, adding that in the UK, it had taken the actions announced on 5 November to deliver cost savings in that business of ?0.1m per month.
It also reported that the new scheduling software introduced in 2019 was now delivering improvements in productivity, which would continue over the coming months and further increase both revenues and margins.
Although still early in the new year, Filta's board said it was seeing "strong interest" from potential franchisees in North America, where it had added two new franchises and completed one resale, while in Europe it added one new franchise each in Germany and Switzerland, which would reportedly drive higher revenues in the year ahead.
That, together with the progress made in the final quarter of 2019 in both reducing costs and improving productivity in the UK, gave the board confidence that Filta would deliver a "much-improved" performance in 2020.
"The acquisition of Watbio in December 2018 was a significant transaction for the group, given that it is a well-established company with a high-quality customer base and was almost twice the size of Filta's existing UK business," said chief executive officer Jason Sayers.
"The rationale and opportunities presented by the acquisition remain compelling but, as previously reported, we did encounter some challenges in 2019 as we sought to integrate Watbio with our existing FOG and Seal business."
However, following a number of management changes, new hires and investment in software systems, Sayers said it was "pleasing" to report that the difficulties had now been addressed, with the company "looking forward" to delivering higher margins of which it knew the business was capable.
"At the same time, Filta's North America business continues to grow through our focus on helping franchisees to improve and expand their own operations, which is increasing the level of recurring royalty revenues flowing to the company."
Filta Group said it intended to report its 2019 results on 21 April.
At 1001 GMT, shares in Filta Group Holdings were up 15.5% at 161.7p.
9 Mar 2022 14:36
IN BRIEF: Filta to be delisted as Franchise Brands takeover completes
Filta Group Holdings PLC - Rugby, England-based provider of cooking oil filtration and fryer management services - Franchise Brands PLC says acceptances of its takeover offer remain at 82%. The all-share deal, which values Filta around GBP50 million, was agreed last month. Filta share holders will receive 1.157 Franchise Brands shares for each Filta share, worth 170.7 pence at the time the offer was made. The offer remains open until April 19, but the acceptance condition of 75% already had been met when the deal was first announced. Franchise Brands says Filta shares will be cancelled from AIM on March 24, while 27.7 million new Franchise Brands shares issued to Filta shareholders will start trading on AIM this Thursday.
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