Franchise Brands Returns to Stronger Growth as US Filta Business Drives First-Half Results

Franchise Brands PLC has returned to stronger growth in the first half of 2026, helped by an excellent performance from Filta International in the US and improving momentum across the UK and Europe.

The business generated record system sales across all three of its core business-to-business divisions. Revenue, adjusted profit and earnings per share also moved higher, while strong cash generation helped reduce debt and supported a 9% increase in the interim dividend.

Management remains cautious about volatile economic conditions, but expects the full-year result to be in line with market expectations.

You can read the original company announcement for the complete financial statements.

Franchise Brands' key figures

Metric	H1 2026	H1 2025	Change
System sales	£229.2 million	£214.9 million	6.7%
Statutory revenue	£75.6 million	£70.4 million	7.4%
Adjusted EBITDA	£18.5 million	£17.4 million	6.5%
Adjusted profit before tax	£12.6 million	£11.7 million	7.8%
Profit before tax	£8.4 million	£5.9 million	42%
Adjusted EPS	4.81p	4.42p	8.9%
Basic EPS	3.20p	2.21p	45.0%
Adjusted net debt	£52.9 million	£62.0 million	Down £9.2 million
Cash conversion	81%	83%	Down 2 percentage points
Interim dividend	1.25p	1.15p	9%

System sales represent sales made to end customers by franchise partners, together with revenue from directly operated businesses. Franchise Brands treats this as an important measure because it shows the level of activity across the wider network, rather than just the revenue recognised in its own accounts.

Filta International leads the growth

Filta International was comfortably the standout performer. System sales increased by 20% to £60.8 million, while adjusted EBITDA rose by 40% to £5.0 million.

The division benefited from higher volumes and prices for used cooking oil, known as UCO. UCO sales increased by 54% to £12.5 million, supported by a 16% rise in volume and a 36% increase in price.

That commodity benefit deserves attention because cooking oil prices can be volatile. However, the underlying franchise operation also performed well. Excluding UCO and corporate franchises, system sales increased by 13% in local currency.

The broader FiltaMax programme is expanding the range of services offered by franchise partners. FiltaClean Pro, launched in March, had already attracted 66 franchise partners by the end of the half, representing 56% of the North American network.

This suggests growth was not solely dependent on a favourable commodity price. The challenge will be maintaining momentum if the UCO price becomes less supportive.

Progress across the core UK and European businesses

Pirtek Europe recorded a more modest 2% increase in system sales to £99.4 million. Adjusted EBITDA also rose by 2% to £9.7 million.

Performance varied considerably by geography. UK and Ireland system sales increased by 3%, while Benelux grew by 2% in local currency. Germany and Austria declined by 2% in local currency as industrial and manufacturing markets remained difficult. France fell by 12% in local currency and continued to face challenging conditions and aggressive price competition.

Cost control partly offset those pressures. Pirtek's administrative expenses fell by £0.6 million to £11.3 million, helping its adjusted EBITDA-to-system-sales margin improve slightly to 9.8%.

Water and Waste Services produced 6% system sales growth to £58.0 million, although adjusted EBITDA declined by 2% to £5.6 million.

Metro Rod was the main source of growth in the division, with system sales up 10% to £43.6 million. Average order value increased by 18%, despite job numbers falling by 8%, as the company shifted towards larger and more technically demanding work.

That sales growth did not fully translate into profit. Metro Rod's adjusted EBITDA slipped by 2% to £4.1 million, reflecting lower royalty rates on some fast-growing services and higher allocated IT costs.

Cash generation is strengthening the balance sheet

The cash flow performance is one of the more encouraging parts of these results.

Adjusted cash generated from operations increased to £15.0 million from £14.5 million. Cash conversion was 81%, meaning the company converted most of its adjusted EBITDA into adjusted operating cash.

Adjusted net debt fell to £52.9 million from £62.0 million a year earlier, while leverage reduced from 1.8 times adjusted EBITDA to 1.5 times. The lower debt burden, alongside reduced base rates and a lower lending margin, helped cut the finance charge by 16% to £2.6 million.

The average interest rate on UK bank facilities declined to 5.4% from 7.0%. Continued deleveraging should therefore improve financial flexibility and reduce the amount of profit absorbed by interest payments, assuming operational cash generation remains strong.

Investors can find further background on the company on the Franchise Brands PLC share page and compare these numbers with its resilient 2025 full-year results.

Why statutory profit rose much faster than adjusted profit

Profit before tax increased by 42%, considerably faster than the 7.8% growth in adjusted profit before tax.

Part of that difference came from a share-based payment credit. Some options granted in 2023 had performance conditions that were not met, causing 2.2 million options to lapse in May 2026.

The accounting reversal helped statutory profit after tax rise by 44% to £6.1 million and basic EPS increase by 45% to 3.20p. Investors should therefore avoid treating all of the statutory earnings increase as recurring operational progress.

Adjusted EPS, which strips out share-based payments and other specified items, increased by a more representative 8.9% to 4.81p.

Dividend rises as management remains cautious

The proposed interim dividend is 1.25p per share, up 9% from 1.15p. It is due to be paid on 25 September 2026 to shareholders on the register at the close of business on 11 September 2026.

Management is not assuming any economic tailwinds in the second half. Markets exposed to industrial and construction activity remain subdued, and the company described macroeconomic conditions as volatile.

Even so, Franchise Brands expects its full-year performance to be in line with market expectations. The disclosed range for 2026 adjusted EBITDA is £35.9 million to £38.0 million, compared with £18.5 million delivered in the first half.

What investors should watch next

These results contain a healthy combination of organic sales growth, cost control, lower interest expense and debt reduction. Filta International is performing particularly well, while Metro Rod is successfully moving towards higher-value services.

There are still weak spots. European industrial demand remains difficult, the French Pirtek operation is under pressure, the B2C franchise base is shrinking, and some divisional sales growth has not yet translated into higher EBITDA. Filta's exposure to UCO pricing is another source of variability.

The next test is whether the One Franchise Brands strategy can produce broader margin improvement. Administrative expenses, including group overheads, increased by only 1% and declined from 11.7% to 11.1% of system sales, which is an encouraging early sign.

For shareholders, the central attraction is becoming clearer: a predominantly franchised, cash-generative model capable of funding investment, reducing leverage and increasing dividends. Delivering full-year expectations without relying on better economic conditions would provide stronger evidence that the operational improvements are becoming embedded.