# Filta Group FY’19 results and COVID-19 update

- Link: https://www.directorstalkinterviews.com/filta-group-fy19-results-and-covid-19-update/412826006
- Published: 2020-05-28T11:40:25+01:00
- Author: Amilia Stone

**Filta Group Holdings PLC** ([LON:FLTA](https://www.directorstalkinterviews.com/company/filta-group-holdings-plc/flta.l))
announced FY’19 results pretty much in line with our numbers. Adjusted EBITDA was
£3.2m, vs. our £3.3m estimate, and revenue was £24.9m, vs. our £25.1m expectation.
These figures confirmed that the integration of Watbio was back on track and the
business was trading well until COVID-19 struck. Most of Filta’s customers are currently
closed, but the company is optimistic that they will bounce back one distancing 
restrictions are lifted. We have removed our 2020 forecasts.

 * **FY’19 results:** Revenue was up 75%, at £25m, of which £8.6m came from Watbio.
   Costs, however, were up 91%, leaving reported EBIT down a third, at £1.2m, and
   statutory PBT nearly halved, to £0.9m. The company ended the year with net borrowings
   of £2.1m, having paid the deferred acquisition and integration costs of Watbio,
   and including future lease liabilities.
 * **1Q’20 trading and outlook:** 2020 had started well in all territories, with
   six new franchisees added. Margin improvements were coming through. A significant
   part of the company’s activities is focused on the hard-hit leisure sector and,
   until it reopens, the company is mostly marking time. It has developed a bacterial
   cleansing service, which it is offering to existing and new clients.
 * **Valuation:** Along with our forecasts, we have suspended our valuation.
 * **Risks:** The clear risk for Filta is that it loses a substantial part of its
   business if customers are unable to reopen. In the UK-owned operations, the business
   is heavily weighted towards 20 large operations that are well positioned to survive,
   including some supermarket chains that have remained open.
 * **Investment summary:** Filta Group is an attractive business, in our view, combining
   the capital-light franchise model in North America and Europe with company-owned
   operations in the UK. As businesses begin to reopen, the focus on cleanliness,
   efficiency and environmental friendliness is unlikely to be abated.

[DOWNLOAD THE FULL REPORT](https://www.hardmanandco.com/wp-content/uploads/2020/05/Hardman-Research-Filta-Group-FY19-results.pdf)

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