Filta Group Holdings PLC Purchase of FiltaFry Deutschland GmbH (4018D)
January 31 2018 - 2:00AM
UK Regulatory
TIDMFLTA
RNS Number : 4018D
Filta Group Holdings PLC
31 January 2018
FILTA GROUP HOLDINGS PLC
("Filta" or "the Company")
Purchase of FiltaFry Deutschland GmbH, master franchise owner in
Germany
Filta Group Holdings plc (AIM: FLTA), a provider of fryer
management and other services to commercial kitchens, announces the
acquisition of FiltaFry Deutschland GmbH ("FiltaFry GmbH"), the
company which owns the master franchise agreement for FiltaFry in
Germany.
The acquisition is the first step in Filta's strategy to expand
its fryer management franchise business in Europe, by replacing the
master franchise structure with a multi-unit franchise model which
has been highly effective in the USA over the last 15 years. This
provides more direct influence over the marketing and sale of
FiltaFry franchises and enables the Group to provide "hands-on"
assistance with a central sales and support office to drive the
growth of each franchisee within the network. As a result of the
acquisition, the Group will immediately have 6 franchise operations
and 7 MFU's operating in Germany. Filta plans to perfect the model
and establish a meaningful presence in the German market before
expanding into, initially, neighbouring European countries.
Filta has paid an initial consideration of EUR200,000, satisfied
as to EUR175,000 in cash and EUR25,000 by the issue of 10,971 new
Ordinary Shares. Filta will also pay deferred consideration of
EUR50,000, to be satisfied by the issue of Filta shares, in two
equal installments, on 30 January 2019 and 30 January 2020.
In its most recent unaudited management accounts, for the year
ended 31 December 2017, FiltaFry GmbH reported revenue of
EUR193,000, adjusted EBITDA of EUR32,250 and a loss before tax of
EUR11,370. As at 31 December 2017, FiltaFry GmbH had net assets of
EUR6,230. FiltaFry GmbH will cease to incur certain costs relating
to its current ownership structure and is therefore expected to
trade profitably following the acquisition.
Jos van Aalst, who originally purchased the master licence
rights to operate the FiltaFry business in Germany in late 2014,
has been appointed as managing director of Filta's European
business and will have direct responsibility for all operational
matters in Europe. Mr. van Aalst, a Dutch national, has extensive
experience in building businesses, having grown several brands on
the European continent. Since acquiring the master licence for
Germany 3 years ago, he has expanded FiltaFry GmbH to include six
Franchise Owners and has secured some key customers, including two
of the top three contract caterers and top trophy sporting venues.
This provides Filta with an established base of European
franchisees from the outset and supports faster expansion than
would otherwise be possible. His ongoing remuneration as an
employee of the Company, which includes payments in shares and
share options, is heavily performance-weighted, specifically on
growth in the franchisee and MFU base.
Filta's business model in the USA is focused on recruiting the
right franchisees and then working with them to grow their
businesses. Accordingly, it intends to hire a national accounts
salesperson in Germany to drive the growth of existing franchise
owners, which will allow Jos van Aalst to focus on accelerating the
recruitment of new franchise owners in the country. The business is
projected to achieve a similar gross margin to our FiltaFry
business in the USA and to make a small profit in 2018. Thereafter,
the Directors expect to achieve revenue and gross profit growth
with only a modest increase in overheads.
Filta CEO Jason Sayers says "we have a built a very successful
franchise model in North America and it makes sense to expand in
Europe using the same model. Jos was instrumental in growing a
large operation across the continent with his previous company and
has, through owning the master license, worked with Filta for the
last two years, during which time he has shown his business
development ability. We believe that Europe represents an exciting
and significant new market for us but getting the model right in
Germany is key, which may take the rest of this year. With Jos
leading Filta Europe, we are confident that we have the right
person to lead our team to execute our European plans over the
coming years."
The Company has made application for the admission of 10,971 new
Ordinary Shares to trading on AIM, which is expected to take place
at 8.00 a.m. on or around 5 February 2018.
Following the issue of shares above, the Company's issued share
capital comprises 27,143,630 Ordinary Shares, of which none are
held in treasury. Therefore, the total number of Ordinary Shares
with voting rights in Filta Group Holdings PLC is 27,143,630, which
may be used by shareholders as the denominator for the calculations
by which they will determine if they are required to notify their
interest in, or a change to their interest in the Company under the
FCA's Disclosure Guidance and Transparency Rules.
This announcement contains inside information.
For further information:
Filta Group Holdings plc Tel: +1 407 996 5550
Jason Sayers, Chief Executive
Brian Hogan, Finance Director
Cenkos Securities (NOMAD and broker) Tel: 020 7397 8900
Bobbie Hilliam
This information is provided by RNS
The company news service from the London Stock Exchange
END
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