Filta moves into profit and hunts for acquisitions
Filta (FLTA:AIM) 196p
Gain to date: 15.3%
Full year results from deep fat fryer cleaning specialist Filta (FLTA:AIM) were very impressive with revenue (excluding a business that’s been sold) up 36% to £11.5m and a pre-tax profit of £1.6m (2016: £0.3m loss).
The key metric to assess the health of the business is MFUs (mobile filtration units) which increased by 16% to 394. These are the drivers for repeat revenue, says chief executive Jason Sayers.
Although there was minimal net growth in the number of franchise owners to 184 (2016: 182), Sayers explains to Shares that the quality of the network has improved as ‘the big guys are getting better’.
Some of its biggest existing franchisees have been buying out struggling franchisees and also investing in new vans to take on more work.
Sayers says there is no problem in finding work; the issue lies with a lack of suitable technicians in the US, a geography accounting for 72% of group revenue. ‘With full employment in the US, it’s hard to find people. However, the strong economy also means franchisees can charge more in certain markets.’
The company is seeking acquisitions to boost its high-margin UK drainage business FiltaGMG and it is already seeing uplift in demand for its high-margin fridge seals business, also based in the UK.