FINAL RESULTS PRESENTATION 2018
01 06 At a glance Barking Mad CONTENTS 02 07 Metro Rod Financials 03 08 Metro Plumb and Kemac Acquisitions update 04 09 ChipsAway Summary 05 10 Ovenclean Appendix FINAL RESULTS PRESENTATION | 2018 FINAL RESULTS PRESENTATION | 2018 1 1
FRANCHISE BRANDS: AT A GLANCE Drainage and plumbing Car paintwork repairs Domestic oven cleaning Dog home boarding Franchisees EBITDA Franchisees EBITDA Franchisees EBITDA Franchisees EBITDA 40 £2.5m 201 £1.9m 106 £0.3m 80 £0.2m FINAL RESULTS PRESENTATION | 2018 2
A STRONG PERFORMANCE: AHEAD OF EXPECTATIONS FINANCIAL HIGHLIGHTS OPERATIONAL HIGHLIGHTS Fee income Adjusted earnings per share • Metro Rod's "Vision 2023" 3.0p +21% £17.9m +41% strategy has been greeted with 2018 real engagement from the 2018 £17.9m 3.00p 2017 2017 2.47p £12.7m franchise network. 2016 2016 £4.9m 2.40p • Double-digit like-for-like sales Adjusted EBITDA Dividend per share growth for half the Metro Rod 0.67p +34% network. £3.7m +37% • Development of new business £3.7m 2018 2018 0.67p systems is progressing well. 2017 2017 0.50p £2.7m 2016 2016 £1.4m 0.17p • Metro Plumb grew rapidly with system sales up 27%. (Net debt)/Cash Profit/(loss) before tax • ChipsAway continues to improve £2.9m £(5.0)m -21% the quality of income. 2018 2018 £2.9m -£5.0m 2017 2017 -£0.1m -£6.3m 2016 2016 £2.5m £0.8m FINAL RESULTS PRESENTATION | 2018 3
THE 2018 RESULTS: AT A GLANCE 4,100 +7 +8 -27 +1,192 -178 3,900 3,700 3,700 EBITDA £’000 3,500 3,300 3,100 2,900 2,697 2,700 2,500 2017 Metro Rod ChipsAway Ovenclean Barking Mad Head Office Costs 2018 FINAL RESULTS PRESENTATION | 2018 4
METRO ROD VISION 2023: ON TRACK Vision 2023: engagement from a re-invigorated franchise community. Implementation of most strategic and operational changes. Vision 2023 principles: • Return the franchisee to front and centre of the business. • Help them grow local sales. • Decrease franchisee reliance on over Our faith in the franchisees complicated manual systems. has been rewarded. In 2018 20 franchisees recorded • Reduce the intervention of the double-digit like-for-like sales Support Centre. growth, 14 had sales of over £1m and seven grew at over Vision 2023 required creating new 30%. systems and new ways of working . FINAL RESULTS PRESENTATION | 2018 5
GOOD PROGRESS AGAINST KEY STRATEGIC OBJECTIVES Good progress made against two key elements of Vision 2023: technology and sales & marketing. • Development of new business systems is progressing well and several new systems have been rolled out to the franchisees. • Most important system to be updated System Sales (proforma) is the Works Management System £37.4m +10.2% (“WMS”) and a linked CRM. • Launch of the National Advertising 2018 £37.4m Fund (“NAF”) has allowed creation of 2017 £33.9m new marketing team and strategy. • Introduction of sales-based incentive Growth in franchisees’ Growth in job numbers local sales schemes to encourage and reward 14% 14% growth. FINAL RESULTS PRESENTATION | 2018 6
OUR INVESTMENT IN TECHNOLOGY: STARTING TO DELIVER • WMS being developed in close Digitally-enabling our business: cooperation with our franchisees: • Automating manual, repetitive, tasks – Currently on trial. using robotics: – Expect to start rolling it out to a – 40% of all jobs are now logged wider group of franchisees in 2H automatically. 2019. – 95% of jobs that are logged via a • Technology investment centred on customer portal are monitored and tracked using robotics. Metro Rod, however: – Systems and functionality have • Rolled-out new digital management Group-wide applications. information and reporting dashboard – Will benefit future acquisitions. for franchisees and the Support Centre. • Launch of quotations system for % of jobs logged Total Group franchisees in Q1 2019. automatically IT spend 2018 40% £1.5m FINAL RESULTS PRESENTATION | 2018 7
KEMAC AND METRO PLUMB: A YEAR OF ACHIEVEMENT • Anticipate many independent A positive year for both Kemac and Metro Plumb: Metro Plumb franchises going forward. • Excellent performance at Kemac • Metro Plumb has continued to due to a number of large one-off jobs. grow rapidly with sales up 27% on 2017. • Kemac business placed onto a more sustainable and predictable footing to assist in the development of Metro Plumb. • Launch of our first Metro Plumb franchise (London South East). Growth in Metro Total plumbing jobs Plumb sales carried out in 2018 27% 35,990 FINAL RESULTS PRESENTATION | 2018 8
METRO ROD: PROGRESS ON MANY FRONTS Progress in 2018 Focus for 2019 • • Appointment of Sales & Marketing Director, Implementation of sales recruitment, training FOCUSED ON implementation of new marketing strategy. and support. G R O W T H • • Roll-out of field-based marketing training. Launch of new website to improve commercial customer acquisition. • Launch of sales-based incentive scheme. • Launch of PR initiatives. • • Development of ITOL-accredited apprenticeship Launch of apprenticeship scheme and FOCUSED ON scheme to develop new engineering talent. recruitment of first apprentices. • • D E V E L O P M E N T Roll-out of ITOL-accredited training programme. Development of Brighton & Gatwick company- owned franchise. • Establishment of company-owned franchise in • Exeter. Open first Vision 2023 depot. • • Launch of new finance scheme to assist Establish franchise recruitment process and FOCUSED ON franchisees in buying additional equipment. attract new franchisees. S U P P O RT • • Supported franchisees in the production, and Leverage the new telephone system and analysis of, monthly management accounts. technology to improve the customer experience. FINAL RESULTS PRESENTATION | 2018 9
CHIPSAWAY: A BRAND IN TRANSITION The automotive aftermarket will experience significant disruption: • Autonomous vehicles: introduction of Advanced Driver Assist Systems. • Growth of electric and hybrid vehicles. • Connected vehicles. • Strategic shift for ChipsAway from a van-based operation to Car Care Centres have Car Care Centres. additional capacity and advanced equipment and are • Corresponding transition to turnover- able to complete larger and more specialist repairs. related as opposed to fixed fees. FINAL RESULTS PRESENTATION | 2018 10
CHIPSAWAY: A BRAND IN TRANSITION • Lower numbers of franchisees • Our model Car Care Centre will recruited due to challenging open shortly at the Kidderminster external environment. Head Office: – Test new specialist equipment. • Encouragingly, some shortfall was made up through existing – Train our franchisees. franchisees buying additional – Demonstrate viability of concept territories to expand their and return on investment. businesses. • 33 franchisees now have Car Care Centres: % of network paying turnover-related, – Franchisees pay turnover- as opposed to fixed fees related MSF of 10%. 30% – Average turnover £200k. • 30% of MSF income is now MSF as a % total income turnover-related as opposed to 62% fixed fees. FINAL RESULTS PRESENTATION | 2018 11
OVENCLEAN: STEADY PROGRESS Ovenclean franchisees continue Number of jobs to trade well in a business that is carried out in 2018 predominantly one man, one van. 76,000 • “Milk round” of 400 -500 customers and six-monthly cleans. Trustpilot ranking • Fixed monthly fee increases with 9.8/10 inflation and time in the franchise system, approximating to 10% of their turnover. • Lower levels of franchisees recruited than in previous years. • 7% increase in consumer leads provided to franchisees. FINAL RESULTS PRESENTATION | 2018 12
BARKING MAD: SLOWER FRANCHISE RECRUITMENT 2018 progress against strategic System sales objectives: £3.8m • Franchise recruitment was affected by high levels of employment. Number of • Income generated from a 10% franchisees MSF on system sales which grew 80 6%. • Barking Mad franchise network grew from 77 to 80. • Barking Mad has benefited from the adoption of additional Group systems and practices in 2018. FINAL RESULTS PRESENTATION | 2018 13
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