No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - Franchise Brands said in an update on Wednesday that it expects to deliver a "highly resilient" performance for 2025, with adjusted EBITDA forecast to be in line with market expectations.
For the three months ended 30 September, the AIM-traded multi-brand franchise group said underlying demand for its essential reactive and planned services remained firm across most markets despite a challenging economic and geopolitical backdrop.
The company said its 'One Franchise Brands' integration and efficiency initiatives were progressing well, while strong cash generation continued to support deleveraging.
At Pirtek, which provides hydraulic hose replacement services, customer retention remained strong though discretionary and project work was weaker, particularly in construction and plant hire.
The company said the business was well positioned to benefit when markets recover and was continuing to diversify across sectors and expand its range of services.
It said the performance of its smaller direct labour operations in France and Sweden also improved.
In the water and waste services division, Metro Rod and Filta UK both saw resilient demand for essential maintenance work, while Willow Pumps reported good growth due to special project activity.
Looking at North America, Filta's core franchise operations excluding used cooking oil posted good growth in system sales, with oil prices improving further and helping to drive volumes.
Franchise Brands said its FiltaMax strategic growth initiative continued to gain traction.
Trading in the group's consumer-facing division remained stable despite difficult franchise recruitment and retention conditions.
Group-wide IT programmes, including the One Finance, One Works Management System and One CRM projects, were said to be on schedule and within budget, with benefits expected to begin materialising from 2026.
"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," said executive chairman Stephen Hemsley.
"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."
He added that the firm was also making strong progress with its 'One Franchise Brands' IT initiatives to accelerate integration and drive efficiencies, which was designed to 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."
At 1044 GMT, shares in Franchise Brands were down 1.95% at 124.53p.
Reporting by Josh White for Sharecast.com.