Franchise Brands (AIM:FRAN), the AIM-listed platform of B2B franchise businesses spanning water, waste and drainage services, reported pre-tax profit up 42% to £8.4m in the six months to 30 June, against £5.9m a year earlier.
System sales, the group's preferred growth measure, rose 6.7% to £229.2m, while statutory revenue climbed 7.4% to £75.6m.
Adjusted EBITDA increased 6.5% to £18.5m and adjusted earnings per share rose 8.9% to 4.81p, with the US arm of Filta International the standout performer, helped by an elevated used cooking oil price and expanded services, while System sales growth recovered across the UK and Europe.
Adjusted net debt fell £9.2m to £52.9m, cutting leverage to 1.5 times adjusted EBITDA from 1.8 times a year earlier, as cash conversion held at 81%. The board proposed an interim dividend of 1.25p per share, up 9% from 1.15p.
"With macroeconomic conditions remaining volatile, we are prudently not assuming any tailwinds from improvements in market conditions in H2 2026", said Stephen Hemsley, executive chairman.
The company said its strategic initiatives, including simplifying the group around its three core B2B franchised businesses, underpin confidence that full-year performance will be in line with market expectations of £35.9m to £38m in adjusted EBITDA.
News Intelligence what this means for the company
Franchise Brands delivered H1 profit growth of 42% to £8.4m and System sales growth of 6.7% to £229.2m, while cutting leverage to 1.5x adjusted EBITDA from 1.8x and raising its interim dividend 9%. The US Filta business drove outperformance, though management is guiding conservatively for H2, assuming no tailwinds from macroeconomic improvement.
The combination of accelerating profit, deleveraging, and dividend growth signals improving operational momentum and cash generation, though management's cautious H2 guidance and volatile macro backdrop temper the outlook beyond current market conditions.
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