Franchise Brands PLC on Tuesday said it expects to report full-year earnings at the lower end of market expectations, amid ‘challenging’ market conditions in the second half of 2024.
The Macclesfield, England-based international, multi-brand franchisor focused on business-to-business van-based reactive and planned services said trading in its third quarter and fourth quarter to date has continued the ‘resilient underlying demand’ from its first half.
However, Franchise Brands said it does not now expect recovery in project work until next year, due to ‘continued macroeconomic uncertainty and challenging conditions in some markets’.
As a result, the group expects adjusted earnings before interest, tax, depreciation and amortisation for 2024 at the lower end of the market expectations range, citing a company-compiled consensus of £35.7 million to £37.0 million. This would represent between a 19% and 23% growth from £30.1 million last year.
Executive Chair Stephen Hemsley said: ‘Demand for our essential reactive services continues to drive a resilient performance despite softer demand for non-essential work. We expect this deferred work will be required, albeit the exact timing is uncertain and so we are cautiously assuming a recovery beyond the current year.
‘All our integration and de-gearing initiatives remain on track, which will enhance our operational gearing and earnings per share growth, respectively, in future years. Our principal franchise brands have significant growth potential as they grow their small shares of large, fragmented markets, expand their range of services and geographical penetration, and cross-sell to our large customer base.
‘I, therefore, remain confident that our resilient reactive service business will continue to prosper, and that overall system sales growth will accelerate once the macroeconomic environment improves and support the strategic ambitions set out at the Capital Markets Day held earlier this year.’
Shares in Franchise Brands were down 8.0% at 168.00 pence each in London on Tuesday afternoon.
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