Here’s how nicely your favourite rapid meals chain is doing in the cutting-edge financial system
Famous Brands on Wednesday (29 May) mentioned a marginal (2%) upward push in sales for the 12 months ended February 2019 to R7.2 billion. Gross profit declined 5% to R3.6 billion while running profit before non-operational gadgets also decreased by 5% to R849.7 million.
Famous Brands is home to numerous casual-dining and fast meals chains in South Africa, including Steers, Wimpy, Debonairs, Mugg & Bean, Tashas, Salsa, Mythos, and Turn n Tender. It additionally owns Gourmet Burger Kitchen (GBK) within the United Kingdom. Headline income according to percentage dropped 19% to 319 cents in line with proportion, the group said, highlighting economic and political uncertainty in its primary markets, both domestically, within the lead as much as the national government elections, and inside the UK.
“Across those markets, the trading surroundings became characterized by way of limited patron discretionary spend and bad sentiment, even as eager competitor hobby intensified margin strain. In South Africa, susceptible monetary conditions have been exacerbated with the aid of u. S .-particular dangers,” Famous Brands said. Technological improvements persevered to purpose a strategic shift inside the enterprise, the maintaining institution stated, “evidenced by way of the speedy boom of online ordering and door-to-door delivery offerings in our sector”. The board declared a gross dividend of one hundred cents (2018: nil) in step with everyday proportion.
Famous Brands stated that it has a portfolio of 25 restaurant manufacturers, represented by a network of 2,871 operations throughout South Africa, the relaxation of Africa and the Middle East (AME), and the United Kingdom. The enterprise is segmented into Leading manufacturers and Signature brands, strategically located to attract a wide range of purchasers throughout the income and demographic spectrum and across meal alternatives and value propositions.
The Leading manufacturers are categorized as short providers, speedy informal, and casual eating. “Our community incorporates 2,761 franchised and 110 business enterprise-owned operations,” it stated. Revenue grew by 5% to R895 million. Operating profit rose by 10% to R476 million while the running profit margin expanded to 53.2% (2018: 50.7%). “Given the subdued monetary environment, our enlargement program changed into measured and conservative. We opened 162 eating places (2018: 182) and made over, relocated, or converted 260 websites (2018: 248),” the organization stated.
Among its leading manufacturers, Debonairs Pizza grew marketplace share in a sturdy category, whilst Wimpy received proportion again, arresting the decline skilled inside the previous yr. Steers and Mugg & Bean retained their marketplace share, and Fishaways did properly to maintain steady, it said. “Across those manufacturers, our key attention in the course of the duration became to maintain to improve the enjoyment and carrier for our clients. Over 850 of our SA eating places have now enabled online ordering via net or app. We additionally introduced driver-tracking generation and increased our shipping presenting to over 2 000 drivers on all principal shipping platforms,” Famous Brands stated.
Signature manufacturers portfolio
The organization stated that its Signature brands ‘below-accomplished control’s expectations’ remain the challenge of critical evaluation. “System-wide sales growth turned into derived ordinarily from new eating places, at the same time as like-for-like income declined,” it said. Famous Brands stated that consistent with its strategy to apply a ‘brutal clear out to unclutter the commercial enterprise,’ it continued to rationalize this portfolio to put it for an increase aggressively.
It consequently exited the following agencies all through the reporting period: 14 on Chartwell (one eating place); Thrupps (5 shops closed because of a method evaluation with the aid of companion Total); O’ Hagan’s ( restaurants); The Bread Basket; and the Made pilot assignment trialed with Edgars. It said that 32 new eating places had been opened across the portfolio, and four were made over. “During the evaluate length, we acquired the stability of the forty-nine % shareholding inside the Mythos joint task partnership, wherein the group already owned a controlling stake,” it said.
Looking ahead, the organization stated that it’s far unlikely that nearby or international trading situations will improve materially inside the brief period, “but the efforts made this yr to restructure our business to withstand damaging situations ought to hold us in desirable stead”. The group said its goal is to open 187 restaurants in the new economic 12 months, while 308 revamps deliberate. “This program will but be determined through an improvement in trading situations,” it confused.