Rugby-headquartered Filta Group Holdings has sold its refrigeration and HVAC maintenance and repair business, Filta Refrigeration, to Livingston-based Scotia Cooling Solutions.
Filta’s primary focus is providing fryer management and other services to commercial kitchens, and it believes its refrigeration division is no longer a core activity to the group.
The Filta Refrigeration subsidiary was sold for a cash consideration up to £125,000, comprising the business’ net assets of £99,719 and additional payments relating to finance leases.
Refrigerator supplier Scotia Cooling Solutions has also taken on all refrigeration and HVAC related engineers, vehicles and current contracts.
Filta feels the sale will allow its management to focus resources on growing the company’s core offerings of FiltaFry fryer management services, FiltaSeal commercial refrigerator door seals and FiltaGMG grease and drain management.
Filta Refrigeration 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 group’s 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.
As part of the deal, Scotia Cooling Solutions has signed a 3-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.”