Franchise Brands PLC (AIM:FRAN) has said its underlying profits and revenues will be ahead of market expectations this year as its two largest businesses, Metro Rod and Filta, continue to trade well.
Filta is seeing strong activity in North America, the franchise group said, driven by the elevated price of cooking oil, which is boosting demand for its Filta Fry process that can double its useful life.
Franchisees recycling cooking oil has generated additional income while the pound's weakness against the US dollar has also given a translation boost.
Metro Rod, a B2B drain services business, is seeing the reward of expansion into pumps and maintenance, Franchise Brands said.
On the consumer-facing side, Franchise Brands said it is facing headwinds in recruitment and retention due to the tight UK labour market.
in a statement, Stephen Hemsley, the company's executive chairman, commented: "I am very pleased with our performance in Q3 and year-to-date which gives us confidence in exceeding current market expectations for the full year.
“This performance has been driven by an excellent performance from the transformational acquisition of Filta and the continued strong momentum at Metro Rod. It demonstrates the strength of our growth strategy and quality of our franchise networks.
"Our technology-enabled business is highly profitable and cash generative, with a strong ungeared £100mln balance sheet.”
Consensus market expectations for the financial year ending 31 December 2022 are for revenue of £92.9mln, underlying profit (adjusted EBITDA) of £14.3mln and adjusted EPS of 7.31p.