28th Jan 2025 16:11
(Alliance News) - Franchise Brands PLC on Tuesday said it expects adjusted earnings before interest, tax, depreciation, and amortisation for 2024 to fall slightly below market expectations of GBP35.5 million to GBP36.0 million due to moderated growth in system sales and a fixed cost base.
The Macclesfield, England-based international, multi-brand franchisor focused on business-to-business van-based reactive and planned services highlighted "resilient" underlying demand for its essential reactive and planned services, with record system sales achieved across all key divisions.
However, Franchise Brands said subdued demand for project work and discretionary spending, particularly in construction and manufacturing sectors, weighed on performance.
Chair Stephen Hemsley said: "Our clear focus in 2025 is to accelerate the pace of the integration of all the group's businesses following a period of rapid expansion. Our aim is to create one connected group with an efficient overhead structure, operating on a secure and effective IT platform, that enhances system sales through maximising group-wide sales opportunities, including cross selling.
"The 'One Franchise Brands' strategic initiative is the key to unlocking and maximising these opportunities."
In the UK and Europe, Pirtek and Metro Rod achieved record system sales, with like-for-like growth of 2% in the UK and Ireland and 4% in Continental Europe.
North American operations also performed "strongly", with Filta International seeing a 17% increase in system sales, excluding used oil.
The group reduced its adjusted net debt to GBP65.1 million at year-end, down from GBP74.7 million in 2023.
Looking ahead, Franchise Brands said it remains cautious about the timing of a recovery in project work and other discretionary spending, though it expects robust demand for its essential services to continue. The company expressed optimism about its integration strategy and the potential for interest rate reductions to support earnings growth in 2025.
Shares in Franchise Brands were down 2.2% at 136.00 pence each in London on Tuesday afternoon.
By Eva Castanedo, Alliance News reporter
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