Q3 Trading Update

Franchise Brands plc (AIM: FRAN), a platform of international B2B franchise brands focused on essential services through a mobile workforce, provides the following trading update for the three months to 30 September 2026 ("Q3").

The Group achieved another period of record System sales in Q3 2026, growing by 8.4% (H1 2026: 6.7% and Q3 2025: 4.2%), building on the momentum achieved in the first half and delivering growth at a significantly higher rate than the prior year. Demand for the Group’s essential services across the core B2B businesses remained robust in Q3, reflecting the critical nature of our services and strong customer relationships across an increasingly diversified range of sectors.

Divisional performance

Pirtek System sales increased by 6.3% in Q3 2026 in sterling (Q3 2025: 2.6%). Encouragingly, Pirtek UK, our largest market, delivered significantly improved System sales growth of 8.9% (Q3 2025: 1.5%), reflecting the initiatives taken to expand the range of services and broaden the customer base. In Germany, System sales growth also built on the progress achieved in Q2, increasing by 5.0% in local currency (Q3 2025: 0.6%), supported by increased reactive work across a diverse range of sectors. Benelux System sales increased by 14.0% in Q3 in local currency (Q3 2025: 1.1%).

In the Water & Waste Services division, System sales grew by 2.4% in Q3 2026 (Q3 2025: 1.2%). Metro Rod performed well, but divisional growth was impacted by the previously announced deferral of certain projects to Q4 at Willow Pumps.

Filta International in North America delivered another strong performance, with System sales increasing by 20.8% in local currency in Q3 2026 (Q3 2025: 15.0%). Excluding Used Cooking Oil (“UCO”) revenue, System sales increased strongly by 15.9% in local currency (Q3 2025: 11.6%). The expansion of Filta’s offering with the new FiltaClean Pro service has started well and is opening up new sector opportunities, with the first national account onboarded for a leading Quick Service Restaurant group.

UCO sales increased by 42.3% in local currency (Q3 2025: 32.9%), driven by a 9.6% increase in volume (Q3 2025: 12.5%) and a 29.9% increase in price (Q3 2025: 18.1%). We expect the UCO market to remain structurally supported around current levels into 2027.

Strategy and capital allocation update

A key element of our strategic plan is the simplification of the Group to focus on our three core B2B franchised businesses: Pirtek, Filta and Metro Rod. The implementation of this plan is progressing in line with management’s expectations. Any disposal proceeds will be utilised to accelerate debt repayment, supporting Earnings Per Share growth in the continuing businesses.

The Group’s capital allocation strategy remains focused on deleveraging, supported by strong cash conversion from our capital-light franchise model. We are increasing our focus on working capital improvement, leveraging the One Franchise Brands platform and ways of working to support this across the Group.

Outlook

The Group benefits from a business model that combines resilient demand characteristics with significant growth opportunities. Our strategic initiatives are positioning us well to continue driving System sales growth while maintaining cost discipline despite macro-economic conditions remaining challenging as expected. Our full-year expectations assume no improvements in market conditions in Q4 2026.

The improved performance of the business through Q3 2026 and the momentum we are building across the Group continues to underpin our confidence that our full-year Adjusted EBITDA performance will be in line with market expectations1.

Stephen Hemsley, Executive Chairman, commented:

“The Group achieved another period of record System sales in Q3 2026, building on the momentum achieved in the first half and delivering growth at a significantly higher rate than the prior year.

“This performance was broad-based across all three core B2B franchise brands, with Pirtek’s key franchised businesses returning to more robust growth and a particularly strong performance from Filta as it expands its services with FiltaClean Pro.

“Our plan to simplify the Group around our three core B2B franchise brands is progressing in line with management’s expectations. This should accelerate debt repayment and, in turn, will drive EPS growth in the continuing businesses.

“Despite the environment remaining challenging, the strategic actions we have taken are delivering clear results, underpinning our confidence that our full-year performance will be in line with market expectations.”

1Current market expectations of Adjusted EBITDA for the financial year ending 31 December 2026 are £36.5m to £38.0m, with consensus of £37.0m. Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, exchange differences, share-based payment expense and non-recurring items.