Here’s a VERY hot tip – fryer expert that can cash in on chips
IN 1997 Jason Sayers, a keen 26year-old cricketer, became captain of the Weybridge 1st XI.
One of his cricketing pals worked shifts in a local restaurant and was badly burnt one evening, as he cleaned the kitchen fryer. Sayers thought there had to be a safer way of doing the job than emptying hot oil into a bucket beneath the fryer. He scouted around and eventually found a factory in Harrogate that filtered engine oil. The foreman modified the equipment and Filta was in business.
Now listed on AIM, the junior market, Filta specialises in fat, oil and grease management for commercial kitchens. The shares are £1.56 and should increase in value, as the company is growing fast and there are significant opportunities for further expansion.
Based in Rugby, Warwickshire, Filta has changed considerably over the years, expanding into the US and Germany and developing different services along the way. The original fryer cleaning business works with more than 6,000 customers a week, draining and filtering their oil, in a process that is not just safer than traditional methods, but also environmentally friendly, because most of the fat can be reused.
Last year alone, the group saved almost 10,000 tons of frying oil for i t s customers, which i nclude McDonald’s, KFC and Pizza Hut, as well as Hilton hotels and arenas for American sport teams, such as the Washington Redskins and the Colorado Rockies. The group even cleans hospital fryers, including Cedars-Sinai, in health-conscious California.
The Harrogate factory still supplies Filta with its fryer cleaning paraphernalia but the businesses operates under a franchise model, so the equipment is rented out to around 200 franchisees on both sides of the Atlantic.
Even though Filta is virtually the only company that offers dedicated fryer-cleaning and filtration services, it has less than 2 per cent of the total market as most restaurants, hotels and suchlike clean their vats themselves. For Sayers, this represents a huge opportunity, as Filta’s process is so much more efficient than the self-help alternative. Once customers start to use the service, therefore, they very rarely stop.
Sayers has branched into related areas, too, including the installation and maintenance of specialised kit that separates oil from water when commercial kitchens wash dishes. This division operates in the UK, where regulation dictates that restaurants, hotels and other big users of oil have to dispose of grease waste safely so it does not clog up drains and sewers. Filta was already well-known in this field but last year bought its biggest competitor, Watbio. The deal has given Filta a strong national presence, in contrast to most operators in the sectors, which tend to be small and local.
Size makes a difference in this sector and customers include All Bar One and Harvester owner Mitchells & Butlers, as well as several major supermarkets.
The Watbio acquisition gives Filta better buying power too and revenues are soaring, following the recruitment of more salespeople. Further growth is expected over time, as the enlarged Filta group adds new customers, sells more to existing ones and benefits from increasingly strict environmental legislation. Filta even collects waste oil for use in biodiesel and provides customers with environmental impact reports so they can see how much they are reducing their carbon footprint by reusing and recycling fat and grease. The company has a fridge seal business as well, replacing worn out seals in commercial kitchens, another energy-saving process.
Half-year figures, released last week, showed strong growth and brokers expect an 82 per cent surge in 2019 revenues to £26 million and a doubling of the dividend to 3.2p. Profits are likely to be flat this year at £ 2.8 million, reflecting costs associated with the Watbio deal, but strong growth is anticipated in 2020 and beyond.