Franchise Brands Share Discussion Threads

[disc0dave45] 05/4/2023 11:25

Oh, of course, my apologies.So Pirtek 3p and Fran 6.2p gets to the house brokers forecast 9.3p eps. So possible sh upside mid teens?.Just not too certain now about the debt they've taken on at a fairly high rate of interest.......think it clearly showed with the heavily discounted placing and the said rate of interest that banks are not as keen as they were to provide funds.

[simon gordon] 05/4/2023 11:18

Disco,

That figure for 2023 is for an eight month contribution.

[wjccghcc] 05/4/2023 11:16

Allenby have forecast it as earnings neutral in 2023 giving 9.3p EPS rising to 11p in 2024 so a 0.5p increase vs pre acquisition.

[disc0dave45] 05/4/2023 11:00

2023 adj pbt £5.6m, so circa £4.2m after tax, that’s a 58% (edit 38% not 58%) reduction on net profit for 2022 (year ending 31st March).
Based on 5 year average net profit (3 years actual & 2 years forecast), they’ve paid circa 28x profit for the business…̷0;where’s the upside?.
So forecast 2023 eps for Pirtek is 2p, consensus forecast for Fran pre-acquisition was 9.2p, so 6.2p with the additional shares issued, that’s a total for 2023 of 8.2p eps. Seems IMO that the 180p is fair value atm but they’ve taken on a lot more risk…….DYOR wtfdik

[someuwin] 05/4/2023 10:50

Acquisition debt should fall rapidly. Much quicker if they sell the B2C biz.

[simon gordon] 05/4/2023 10:39

Disco,

Allenby have PIR contributing the following:

2023
-T/O: 39.6m
-Adj. EBITDA: 10.8m
-Adj. PBT: 5.6m

2024
-T/O: 55.6m
-Adj. EBITDA: 16.5m
-Adj. PBT: 10.5m

[disc0dave45] 05/4/2023 10:34

Thanks for that.On face value it looks like shares are cheap but their debt now is a concern (interest circa 7% pa which seems high), also IMO they paid too much for Pirtek Europe. From their accounts they made net profit of £8.6m, £6.8m and £10.1m for FY20, FY21 and FY22 respectively, that's only a CAGR for the 3 years (I used 3 as that's what Fran used but they prorated to year ends Dec not March for some reason) of 5.5%.They paid 25 times the 3 year average net profit......that's way too much IMO.Will do a bit more digging as their forecast numbers do seem like there's value but the actual accounts don't?.

[simon gordon] 05/4/2023 10:14

New forecasts according to Allenby:

2023
-T/O: 155.1m
-EPS: 9.3
-Net Debt: 75.2m

2024
-T/O: 182.1m
-EPS: 11
-Net Debt: 61.5m

[someuwin] 05/4/2023 10:01

Directors and senior management are buying £7 million worth at 180p.

[someuwin] 05/4/2023 09:54

Can now buy cheaper than the placing price.

[skasher094] 04/4/2023 15:34

Directors were part of domino pizza board before buying franchise brands 13/14 yrs ago

[davr0s] 04/4/2023 15:20

We will see - 25% is a very big discount for a placing like this. I just hope they haven't bitten too much off. The one saving grace is it looks like the mgt team had decent holdings prior so they knew what this would do to their existing holdings as they have also taken the hit today

[trt] 04/4/2023 14:57

Once the penny drops on how transformative this deal is the share price will rise pretty quickly, hence the reason the funding was fulfilled so quickly. Grabbed a few more today couldn't resist.

[someuwin] 04/4/2023 14:52

Allenby note:

Complementary and transformational acquisition of Pirtek - available to download here...



"...Our fair value rises from 275p to 330p with the risk to the upside."

[trt] 04/4/2023 11:17

Fundraising now complete.

[iamnoone] 04/4/2023 10:56

It's a good strategic move, but not without its risk regarding the debt and integration.

[someuwin] 04/4/2023 09:10

I like the sound of this deal. And the broader move from B2c to B2B. So I'm buying.

[davr0s] 04/4/2023 08:37

The nutters have arrived...

[scepticalinvestor] 04/4/2023 08:28

Why add at 182p today when you will get them at 50p in a month?

[wjccghcc] 04/4/2023 07:36

I suspect they started talking to investors about raising the funds when the share price was 200p or below. At least I can add at 182p today.