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(Sharecast News) - Franchise Brands said in an update on Wednesday that adjusted EBITDA for the year ended 31 December was expected to be in line with market expectations, as the group reported record system sales and announced plans to launch a share buy-back programme of up to 10m.
Despite a challenging macroeconomic backdrop, the AIM-traded firm said system sales rose 2% in 2025, reflecting resilient demand for its essential reactive and planned services.
Performance was supported by the group's international diversification, with Filta International in the US delivering particularly strong growth.
The board said robust cash generation continued to underpin planned deleveraging while allowing ongoing investment in growth initiatives.
Franchise Brands said it made progress with its 'One Franchise Brands' programme during the year, aimed at enhancing sales and driving efficiencies, including the rollout of group-wide IT initiatives.
The board said it expected adjusted EBITDA for the year to be within the current market expectations range of 33.8m to 35.3m.
At divisional level, system sales at Pirtek increased by 1%, with reactive sales holding up well following diversification across end markets, although project and discretionary work remained subdued.
The water and waste services division also recorded 1% system sales growth, supported by resilient demand for reactive and planned work, while project activity continued to be challenging.
Filta International's North American core franchise business performed strongly, with system sales up 7%, driven by a 20% increase in used cooking oil sales reflecting higher volumes and pricing.
The B2C division traded in line with management expectations amid a difficult franchisee recruitment and retention environment.
Strong cash generation enabled the group to repay 15.5m of term loan and revolving credit facilities during the year, reducing adjusted net debt to 55.2m as at 31 December from 65.1m a year earlier.
The company said it remained comfortably within its banking covenants.
Reflecting the board's confidence in the group's prospects, Franchise Brands announced its intention to introduce a share buy-back programme of up to 10m, subject to obtaining the necessary consents.
The programme would be implemented through a combination of on-market purchases and purchases via the employee benefit trust, and would replace the existing EBT share purchase programme.
"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," said executive chairman Stephen Hemsley.
He added that the group remained focused on integration, cost control and broadening the range of services offered, positioning it to deliver stronger performance as market conditions improve.
At 1404 GMT, shares in Franchise Brands were up 2.82% at 136.5p.
Reporting by Josh White for Sharecast.com.