**Summary of Franchise Brands PLC Interim Results for H1 2025**
**Financial Highlights**
**System Sales** Increased by 2.5% to £209.4 million (H1 2024: £204.2 million).
**Statutory Revenue** Rose by 0.2% to £70.4 million (H1 2024: £70.2 million).
**Adjusted EBITDA** Declined by 1.7% to £17.4 million (H1 2024: £17.7 million).
**Profit Before Tax** Grew by 9.6% to £11.7 million (H1 2024: £10.7 million).
**Adjusted EPS** Increased by 7.8% to 4.42p (H1 2024: 4.10p).
**Adjusted Net Debt** Reduced by £8.7 million to £62.0 million (H1 2024: £70.7 million), with leverage decreasing to 1.8x (H1 2024: 2.1x).
**Cash Conversion Rate** Improved to 83% (H1 2024: 71%).
**Interim Dividend** Proposed at 1.15p per share, a 5% increase (H1 2024: 1.10p).
**Operational Highlights**
**Resilient Performance** Despite challenging macroeconomic conditions, all key divisions achieved record system sales.
**Strategic Initiatives** Progress on integration, diversification of customers and services, and Group-wide IT initiatives (One Finance, One Works Management, One CRM) on track for completion by year-end.
**International Growth** Filta International performed strongly, with good traction on the FiltaMax growth initiative.
**Efficiency Gains** Reduction in lower-value jobs and increase in higher-value jobs, alongside cost control measures.
**Outlook**
**H2 2025** Similar conditions to H1, with resilient demand for essential services but weak macroeconomic background.
**Adjusted EBITDA** Expected to be at a similar level to 2024.
**Adjusted EPS** Anticipated to increase due to debt repayment, lower interest costs, and margin improvements.
**Cash Flow** Strong generation supports deleveraging and investment in future growth.
**Management Commentary**
Executive Chairman Stephen Hemsley highlighted the Group’s resilience in challenging conditions, benefiting from international diversification and strong cash generation. He emphasized progress on strategic initiatives, including integration and technology upgrades, positioning the Group for future growth.
**Dividend and Capital Allocation**
Interim dividend increased by 5% to 1.15p per share.
Focus on debt reduction, maintaining a progressive dividend policy, and organic expansion.
No significant acquisitions planned until debt is substantially repaid, expected by 2028.
**Strategic Developments**
Transitioned to the FTSE AIM UK 50 Index, a step towards a future Main Market listing.
Launched a share purchase program via the Employee Benefit Trust to mitigate dilution and enhance shareholder returns.
**Conclusion**
Franchise Brands PLC demonstrated resilience in H1 2025, achieving record system sales and improving profitability despite macroeconomic challenges. Strategic initiatives and strong cash flow position the Group for continued deleveraging and future growth.
| Metric | H1 2025 (£'000) | H1 2024 Restated (£'000) | Change (£'000) | Change (%) |
|---|---|---|---|---|
| System Sales | 209,368 | 204,164 | 5,204 | 2.5% |
| Statutory Revenue | 70,371 | 70,223 | 148 | 0.2% |
| Adjusted EBITDA | 17,417 | 17,719 | (302) | (1.7%) |
| Profit Before Tax | 11,693 | 10,671 | 1,022 | 9.6% |
| Adjusted EPS (p) | 4.42 | 4.10 | 0.32 | 7.8% |
| Basic EPS (p) | 2.21 | 1.94 | 0.27 | 13.9% |
| Adjusted Net Debt (£'000) | 62,049 | 70,718 | (8,669) | (12.3%) |
| Leverage (x) | 1.8 | 2.1 | (0.3) | (14.3%) |