Franchise Brands (FRAN) Trading Update summary

Trading performance

• Q3 and Q4 to date showed resilient demand for essential reactive and planned services, with integration and efficiency initiatives progressing well.

• Recovery in project work is now expected next year due to ongoing macroeconomic uncertainty and challenging market conditions.

• Adjusted EBITDA for 2024 is anticipated to be within market expectations, but at the lower end (£35.7m to £37.0m).

Divisional highlights

• Pirtek saw steady demand for essential services, but project and discretionary spending remained subdued, especially in the UK and Germany.

• Water & Waste Services maintained robust demand; Filta UK advanced its transition to a franchise model, and Willow Pumps expanded its customer base.

• Filta North America achieved strong system sales growth, with stable but lower used cooking oil prices; franchisees are diversifying service offerings.

• B2C Division performed creditably despite a tough franchise recruitment environment.

Strategic and operational initiatives

• Focus remains on integrating recent acquisitions and repaying acquisition debt.

• Implementation of a central IT platform is underway to drive operational gearing.

• Integration and de-gearing initiatives are on track, expected to enhance operational gearing and EPS growth in future years.