Famous Brands on Wednesday (29 May) pronounced a marginal (2%) upward thrust in revenue for the 12 months ended February 2019 to R7.2 billion.
Gross income, however, declined 5% to R3.6 billion, even as working income earlier than non-operational gadgets also reduced 5% to R849.7 million.
Famous Brands is home to numerous casual-eating and rapid 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) in the United Kingdom.
Headline profits according to share dropped 19% to 319 cents in step with proportion, the group stated, highlighting monetary and political uncertainty in its foremost markets, both locally, inside the lead up to the national authorities elections, and in the UK.
“Across those markets, the trading environment turned into characterized by way of confined customer discretionary spend and negative sentiment, whilst keen competitor pastime intensified margin pressure. In South Africa, weak monetary situations had been exacerbated by using us of a-particular risks,” Famous Brands said.
Technological advancements endured to cause a strategic shift within the enterprise, the conserving group stated, “evidenced utilizing the rapid growth of online ordering and door-to-door delivery services in our quarter.”
According to every day share, the board declared a gross dividend of a hundred cents (2018: nil).
Famous Brands stated that it has a portfolio of 25 restaurant brands, represented with a community of two,871 operations across South Africa, the relaxation of Africa and the Middle East (AME), and the UK.
The commercial enterprise is segmented into Leading manufacturers and Signature brands, strategically placed to attract a huge range of consumers throughout the income and demographic spectrum and across meal alternatives and value propositions.
The Leading manufacturers are labeled as a quick carrier, speedy casual and informal dining. “Our network contains 2,761 franchised and 110 organization-owned operations,” it said.
Revenue grew by 5% to R895 million. Operating profit rose using 10% to R476 million, while the working income margin expanded to fifty-three .2% (2018: 50.7%).
“Given the subdued financial environment, our expansion program turned into measured and conservative. We opened 162 eating places (2018: 182) and remodeled, relocated, or transformed 260 websites (2018: 248),” the institution said.
Among its main manufacturers, Debonairs Pizza grew market share in a strong category, whilst Wimpy received back to share, arresting the decline skilled inside the previous year.
Steers and Mugg & Bean retained their marketplace percentage, and Fishaways did well to hold constant, it stated.
“Across those brands, our key consciousness at some stage in length became to preserve to enhance the enjoy and service for our customers. Over 850 of our SA restaurants have now enabled online ordering thru the internet or app. We also brought driving force-monitoring era and extended our transport providing to over 2 000 drivers on all major transport structures,” Famous Brands said.
Signature manufacturers portfolio
The organization stated that its Signature manufacturers ‘under-performed control’s expectations’ remain the issue of vital review. “System-wide income boom became derived broadly speaking from new restaurants, whilst like-for-like income declined,” it said.
Famous Brands said that in line with its approach to applying a ‘brutal clear out to unclutter the enterprise,’ it endured aggressively rationalizing this portfolio to place it for the boom.
It, therefore, exited the following agencies all through the reporting duration: 14 on Chartwell (one restaurant); Thrupps (5 shops closed because of a method evaluate by way of partner Total); O’ Hagan’s ( restaurants); The Bread Basket; and the Made pilot project trialed with Edgars.
It said that 32 new eating places were opened throughout the portfolio, and four had been revamped.
“During the evaluate duration, we obtained the stability of the 49% shareholding in the Mythos joint project partnership, wherein the institution already owned a controlling stake,” it stated.
Looking in advance, the group stated that it’s miles not going that local or international buying and selling conditions will improve materially in the quick-time period, “but the efforts made this year to restructure our commercial enterprise to face up to damaging situations have to preserve us in suitable stead”.
The organization stated it aims to open 187 eating places in the new economic yr, even as 308 revamps are deliberate. “This program will but be determined by means of development in trading situations,” it pressured.