Q3 Trading Update

Expect to deliver a highly resilient performance, with Adjusted EBITDA for the full year in line with market expectations

Franchise Brands plc (AIM: FRAN), an international multi-brand franchise business, provides the following trading update for the three months to 30 September 2025 ("Q3").

Trading in Q3 has continued the trend of the first half of the year, with resilient underlying demand for the Group's essential reactive and planned services despite a continued challenging macroeconomic and geopolitical backdrop in most key markets. Good progress has been made with the One Franchise Brands initiatives to accelerate integration and drive efficiencies. The Group's strong cash flow generation continues to support deleveraging. The Board expects that the Group's Adjusted EBITDA1 for the year ending 31 December 2025 will be in line with market expectations2.

Divisional performance

At Pirtek, demand for essential reactive and planned services has remained resilient in most sectors. However, project work and other discretionary spending were held back, particularly in the construction and plant hire sectors. Customer retention remained strong, which positions the business well as markets recover. We continue to focus on diversifying sectors and expanding the range of services. In the sub-scale Direct Labour Organisations of France and Sweden, we are pleased to report that the underlying performance has improved.

In the Water & Waste Services division, demand for essential reactive and planned services at Metro Rod has also remained resilient. Filta UK continues to benefit from divisional integration. Willow Pumps saw good growth in sales as a result of special project work being delivered.

Filta North America's core franchise business (excluding used cooking oil) experienced good growth in System sales. The used cooking oil price has improved further, and we continue to drive volume. Good traction continues to be made with the FiltaMax strategic growth initiative, and franchisees continue to expand the range of services offered.

Trading in the B2C division remains stable despite the challenging franchise recruitment and retention environment.

The Group-wide IT initiatives of One Finance, One Works Management System and One CRM are progressing on time and well within budget. The roll-out of One Finance and One CRM are now underway and the One Works Management System is on track for roll-out from January.

Stephen Hemsley, Executive Chairman, commented:

"The Group is expected to deliver a highly resilient performance, with adjusted EBITDA for the full year expected to be in line with market expectations, despite the ongoing challenging macroeconomic and geopolitical backdrop. This reflects the essential nature of the majority of the Group's services, strong customer retention and our international diversification, coupled with the strategic initiatives we have undertaken to broaden the sectors targeted and services provided.

"We are also making strong progress with our One Franchise Brands IT initiatives to accelerate integration and drive efficiencies, which will provide a significant competitive advantage with the benefits starting to be realised during 2026. We are, therefore, confident we will emerge from the current challenging market backdrop well-positioned, with a strengthened platform from which to capitalise on the many opportunities in our large and fragmented markets."

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

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