6 August 2004
Speculative Buy
Home services company Myhome International is keen to emphasise that it is not simply a cleaning service but a franchise business as well. A recent £250,000 investment in the company, from new broker and advisor Hoodless Brennan, should go a long way towards helping it achieve this goal. Originally established by household products giant Unilever, which invested almost £7m into the company and developed a centralised software system, Myhome was bought by chief executive Russell O'Connell, for a bargain £300,00, in 1999.
After cutting the huge overheads and honing its operations, the company is looking to increase its franchise operation from a current 6 to 30 a year. O'Connell has already identified 172 locations suitable for its 'cash rich, time poor' concept. Myhome has a strict recruitment policy and training programme to ensure staff are trustworthy and thorough in their duties. A franchise costs £20,000 to set up and the royalty fee is 10%, all of which drops to the company's bottom line. To attract new franchisees, Myhome will use the funds gained from Hoodless to market itself at franchise exhibitions. Bolt on aquisitions, from cleaning to gardening and plumbing, are possible. At the interim period to March, turnover fell 29% to £290,000 but pre-tax losses fell 72% to £60,000. Russell expects the company to break even for the current year and move into profits for the next. Speculative.