Franchise Brands (FRAN) investor relations material

Executive summary

• System sales reached £435 million with EBITDA of £35.2 million, reflecting resilient demand for essential services across seven brands in 10 countries and 600 franchisees.

• The business model is capital-light and cash generative, with income primarily from royalties on franchisee sales, supporting rapid EBITDA growth as system sales expand.

• Strategic focus on de-leveraging after the Pirtek acquisition, with active disposal of non-core businesses and a conservative share buyback program to accelerate debt repayment.

• Progressive dividend policy maintained, with dividends increasing annually since IPO.

• Decision to remain listed on AIM due to cost and regulatory considerations; no current intention to transfer listing to the Main Market.

Financial highlights

• System sales grew by 2% year-over-year to £435.0m, with Filta International in the U.S. delivering standout growth (system sales up 13%, adjusted EBITDA up 21% in local currency).

• Adjusted EBITDA was flat at £35.2m, with strong performances from Willow Pumps (EBITDA up 15%) and Filta International.

• Adjusted net debt reduced to £55.6m (1.6x EBITDA), with £15.8 million of debt repaid during the year.

• Finance expense reduced by 25% due to debt repayment, lower base rates, and renegotiated bank facilities.

• Cash conversion at 98% (up from 94%).

Outlook and guidance

• Trading outlook for 2026 is optimistic, with resilient demand and strong U.S. performance expected to continue.

• Anticipated improvement in European growth rates, driven by infrastructure spend in Germany and house building in the U.K.

• H2 2026 expected to be stronger due to macro catalysts and benefits from integration and cross-selling initiatives.

• No significant acquisitions planned until at least 2028, prioritizing debt repayment and IT integration.

• Board expects FY2026 performance within current analyst forecast range.