Franchise Brands Announces £10m Share Buy-Back Amid Record Sales and In-Line EBITDA

Filta International (North America): standout growth

Filta International’s core franchise business in North America delivered a strong year, with System sales up 7%. Used cooking oil sales rose 20%, driven by an 11% increase in volume and an 8% increase in price. Management also reports good progress with the FiltaMax growth initiative and expanding the range of services – helpful for broadening the revenue base and pricing power.

B2C division: in line despite recruitment challenges

The consumer-facing division traded in line with management expectations, even as franchisee recruitment and retention remained tough. That’s not surprising in a cautious consumer environment. Stability here is a decent outcome.

Cash flow and debt – deleveraging continues

Cash generation in 2025 allowed the Group to repay £15.5 million of its term loan and revolving credit facility. Adjusted net debt fell to £55.2 million at 31 December 2025 (31 December 2024: £65.1 million). Adjusted net debt is the covenant metric, and the Group is “comfortably within” its banking covenants.

This matters for two reasons. First, it supports the credibility of the buy-back – returning cash while still paying down debt. Second, it sets up operational gearing when growth normalises. The franchise model naturally scales well when volumes improve, and a leaner balance sheet amplifies that effect.

Outlook – resilience now, optionality for recovery

Management remains cautious on the macro, especially in the UK, and still sees project and discretionary work as the weak spot. The US remains supportive. There’s a potential tailwind in Germany from expected infrastructure spending, with confidence possibly returning in H2 2026.

For investors, the near-term setup looks like: steady demand in essential reactive/planned services, continued integration and efficiency from “One Franchise Brands” and Group-wide IT initiatives, and upside if discretionary projects unfreeze. The comment on “inherent operational gearing” is a reminder that the franchise platform can deliver sharper profit recovery than headline sales alone when conditions improve.

Key numbers snapshot

System sales (Group)	Up 2% (record level)
Adjusted EBITDA guidance	In line with market expectations of £33.8m to £35.3m
Pirtek System sales	Up 1%
Water & Waste Services System sales	Up 1%
Filta International (North America) System sales	Up 7%
Used cooking oil sales	Up 20% (volume +11%, price +8%)
Debt repayment in 2025	£15.5m (term loan and RCF)
Adjusted net debt (31 Dec 2025)	£55.2m (31 Dec 2024: £65.1m)
Share buy-back programme	Up to £10m (subject to consents)
Prior EBT share purchase programme	Up to £5m; c.£2.6m invested to date

My take – positives, watch-outs and why it matters

• Positives: Record System sales, EBITDA in line, strong North America, deleveraging and a new £10m buy-back. That is a confident, balanced update.
• Execution: “One Franchise Brands” and Group-wide IT are doing the quiet work – driving efficiency and cross-brand selling. Integration progress should support margins as volumes recover.
• Capital allocation: Repaying £15.5m of debt while announcing a buy-back suggests robust cash generation. The EBT involvement helps mitigate option dilution.
• Watch-outs: Project and discretionary work are still soft, particularly in the UK. Franchisee recruitment and retention remain challenging in B2C. Timing of recovery in Europe is uncertain, even if Germany improves in H2 2026.
• Big picture: The franchise model’s operational gearing means modest sales growth can translate into better profit growth when the cycle turns. If macro headwinds ease, earnings could accelerate from a stronger, integrated base.

What to watch next

• Formal launch and pace of the buy-back once consents are secured.
• Further debt reduction alongside the buy-back – net debt trajectory through 2026.
• Progress on FiltaMax and broader service expansion in North America.
• Signs of improvement in project work in the UK and Europe; any early confirmation of German infrastructure-led demand in H2 2026.
• Delivery of “One Franchise Brands” and Group-wide IT benefits in cost and sales productivity.
• Franchisee recruitment and retention trends in B2C.

Footnotes

Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, impairment losses, exchange differences, share-based payment expense and non-recurring items.

Current market expectations for Adjusted EBITDA in FY2025 are £33.8 million to £35.3 million.