Filta Group Holdings plc (AIM: FLTA), a provider of fryer management and other services to commercial kitchens, announces the sale, today, of its refrigeration and HVAC maintenance and repair business, Filta Refrigeration Ltd ("Filta Refrigeration"). The business is no longer a core activity to the Group and the sale will allow management to focus resources on growing the Company's core offerings of FiltaFry, FiltaSeal and FiltaGMG.
The Company has sold the assets and business previously carried on by its subsidiary, Filta Refrigeration, to Scotia Cooling Solutions Ltd for a cash consideration up to £125,000, comprising Filta Refrigeration's net assets of £99,719 as at today's date and additional payments relating to finance leases. Scotia Cooling Solutions Ltd has also taken on all refrigeration and HVAC related engineers, vehicles and current contracts.
Filta Refrigeration Limited recorded £1.6m of revenue, a gross profit of £0.4m and £0.1m of profit before tax in the year ended 31 December 2016.
The Board believes that the disposal of the refrigeration business is an important strategic step in allowing the Group to focus on its higher margin and higher growth businesses. The Directors maintain their current financial expectations for the 2018 financial year as they expect profits from the core offerings of FiltaFry, FiltaSeal and FiltaGMG to offset those lost following the disposal.
Scotia Cooling Solutions has signed a three-year contract to sub-contract all its seal replacement work to Filta, which is estimated to generate revenue in excess of £100,000 in the first full year.
Filta CEO Jason Sayers commented: "Our core business strategy is to increase repeat revenues in our high margin businesses. Whilst Filta Refrigeration was a positive contributor to our performance, its contribution came at significantly lower gross margins than the rest of our service offerings. We are experiencing strong growth in our fryer management business FiltaFry, seal replacement business FiltaSeal and our newly acquired drain maintenance business FiltaGMG. With Scotia Cooling Solutions providing additional work for FiltaSeal, this move strongly supports our strategy of focusing our resources on growing our higher margin service offerings whilst simplifying operations."