REG - Franchise Brands PLC - Trading Update

Franchise BrandsAnnouncement

Today 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20260128:nRSb6265Qa&default-theme=true

RNS Number : 6265Q  Franchise Brands PLC  28 January 2026

28 January 2026

 

FRANCHISE BRANDS PLC

 

("Franchise Brands", the "Group" or the "Company")

 

Year-end Trading Update

 

Adjusted EBITDA(1) for the full year expected to be in line with market
expectations(2)

 

Share buy-back programme of up to £10m

 

Franchise Brands plc (AIM: FRAN), an international multi-brand franchise
business, provides the following trading update ahead of its audited results
for the year ended 31 December 2025 and announces a share buy-back programme.

Despite the challenging macroeconomic backdrop, the Group achieved record
System sales in 2025, growing by 2%, reflective of the resilient
underlying demand for the Group's essential reactive and planned services.
The Group also benefited from international diversification across its
portfolio of market-leading franchise brands, with Filta International in
the US performing particularly strongly.

The Group's robust cash flow generation continues to support the planned
deleveraging alongside ongoing investment for growth. Reflecting the Board's
confidence in the future prospects of the Group, the Company announces its
intention to launch a share buy-back programme of up to £10m.

Good progress was made with the One Franchise Brands initiatives to enhance
sales and drive efficiencies, including the Group-wide IT initiatives.

The Board expects that the Group's Adjusted EBITDA(1) for the year ended 31
December 2025 will be in line with market expectations(2).

Divisional performance

System sales at Pirtek grew by 1%, with reactive sales holding up well as a
result of the successful diversification of the sectors serviced. Project work
and other discretionary spending continued to be subdued.

In the Water & Waste Services division, System sales also grew by 1% as
demand for reactive service and planned work remained resilient. Project work,
as with Pirtek, continued to be challenging.

Filta International's North American core franchise business performed
strongly, with System sales increasing by 7%. Used cooking oil sales increased
by 20%, driven by an 11% increase in volume and an 8% increase in price. Good
progress continues to be made with the FiltaMax strategic growth initiative
and expanding the range of services.

The B2C division traded in line with management's expectations despite the
challenging franchisee recruitment and retention environment.

Balance Sheet

The strong cash generation of the Group in 2025 resulted in a £15.5m
repayment of the term loan and RCF, resulting in adjusted net debt at 31
December 2025 reducing to £55.2m (31 December 2024: £65.1m). Adjusted
net debt is the measure used for testing bank covenants and the Group is
trading comfortably within these.

Capital allocation policy and share buy-back programme

Having considered the strong cash flow generation of the Company in the
context of its current capital allocation policy and the Board's confidence in
the future prospects of the Group, the Company announces its intention to
launch a share buy-back programme of up to £10m subject to obtaining certain
consents. This will be implemented through a mix of on-market purchases by the
Company and the Employee Benefit Trust ("EBT") which seeks to mitigate the
dilutive impact of share option awards.

This new programme will replace the share purchase programme through the
EBT, which restarted in 2024 up to an aggregate value of £5m, of
which circa £2.6m has been invested to date.

Outlook

The macroeconomic uncertainty that characterised 2025 in many of the markets
in which we operate continues, particularly in the UK. We anticipate continued
resilient demand for our essential reactive and planned services, but retain
a more cautious view on the timing of the recovery in project and other
discretionary work. We anticipate that confidence may finally return to the
German market in H2 2026 as a result of the expected infrastructure spending.
The US market currently continues to be supportive.

Stephen Hemsley, Executive Chairman, commented:

"Despite the macroeconomic headwinds in 2025, I am pleased to report Franchise
Brands achieved record System sales, reflecting the quality of our business
and essential nature of our core services.

"Our experienced management team remains focused on the integration of the
Group and controlling costs in the face of subdued demand. We have made good
progress with the One Franchise Brands initiatives, including the Group wide
IT systems.

"We remain focused on maximising the potential of our brands as they grow
their modest shares of large, fragmented, markets by broadening our customer
base and the range of services offered. The inherent operational gearing in
our franchise business model, with a strengthened and integrated platform,
means we are well positioned to deliver a more robust trading performance as
macroeconomic conditions improve".

(1)Adjusted EBITDA is earnings before interest, tax, depreciation,
amortisation, impairment losses, exchange differences, share-based payment
expense and non-recurring items.

(2) Current market expectations of Adjusted EBITDA for the financial year
ended 31 December 2025 are £33.8m to £35.3m.

 

Enquiries:

 Franchise Brands plc                                                 + 44 (0) 1625 813231
 Stephen Hemsley, Executive Chairman
 Peter Molloy, CEO
 Andrew Mallows, CFO
 Julia Choudhury, Corporate Development Director

 Stifel Nicolaus Europe Limited (Nominated Adviser and Joint Broker)  +44 (0) 20 7710 7600
 Matthew Blawat
 Jason Grossman

 Allenby Capital Limited (Joint Broker)                               +44 (0) 20 3328 5656
 Jeremy Porter
 Amrit Nahal / Joscelin Pinnington (Sales & Corporate Broking)

 Dowgate Capital Limited (Joint Broker)                               +44 (0) 20 3903 7715
 James Serjeant

 Paul Richards

 Amber Higgs

 MHP Group (Financial PR)                                             +44 (0) 20 3128 8100
 Katie Hunt / Hugo Harris                                             +44 (0) 7884 494112
                                                                      franchisebrands@mhpgroup.com

 

About Franchise Brands plc

Franchise Brands (FTSE AIM UK 50) is an international, multi-brand franchisor
focused on B2B van-based service with seven franchise brands and a presence in
10 countries across the UK, North America and Europe. The Group is focused on
building market-leading businesses primarily via a franchise model and has a
combined network of c600 franchisees.

The Company owns several market-leading brands with long trading histories,
including Pirtek in Europe, Filta, Metro Rod and Metro Plumb, all of which
benefit from the Group's central support services, particularly technology,
marketing, and finance. At the heart of Franchise Brands' business-building
strategy is helping its franchisees grow their businesses: "as they grow, we
grow".

Franchise Brands employs over 625 people across the Group and there are over
3,000 people in the franchise community.

For further information, visit www.franchisebrands.co.uk
(https://protect.checkpoint.com/v2/r06/___http:/www.franchisebrands.co.uk___.ZXV3MjpuZXh0MTU6YzpvOjg0MDZlOThjMGI5OTQxZGY0M2YyZjQ0Zjc3MjE3NzFlOjc6MGFmOToxZGVlYjdlNGM5NTk2NzQxYWVkZTg2NzNlZTQwYmNkODg5ZjY5ZTk2NGJmZWE5MDA5OGNkOGNhM2I0NmVjYTZjOnA6VDpU)

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTFLFVALAIDFIR



            Copyright 2019 Regulatory News Service, all rights reserved