Publications
Food franchisor Famous Brands has been hard hit by Covid-19 with a 121% decrease in headline earnings per share, the group said on Tuesday.
The Johannesburg-based group ran at a loss in its year to end-February financial results, after restaurants were shut down during the height of the Covid-19 lockdown.
Famous Brands' portfolio comprises of leading or mainstream brands such as Steers, Debonairs, Fishaways and Milky Lane and signature or niche restaurants such as Vovo Telo, Europa and Turn 'n Tender.
The group also has restaurants in Africa and the Middle East and owns Wimpy UK, which were all affected by Covid-19 lockdowns.
Group revenue for the period declined by 35% to R5 billion while the group's operating profit margin declined to a record 3.8%.
"The announcement of the Covid-19 pandemic in March 2020 coincided with the first month of our financial year, and its impact has been felt across the entire 12 months, in varying degrees. While we are accustomed to trading in tough conditions, nothing in our long history compares to the hardship as a result of the pandemic," said CEO Darren Hele.
The South African Brands division reported a 42% decline in revenue to R567 million. Leading brands delivered weaker results where system-wide sales declined by 28.6%.
"Consistent with recent years and in line with general market trends, the quick service brands, being Steers, Debonairs Pizza, Fishaways and Milky Lane outperformed the casual dining brands, namely Wimpy and Mugg & Bean," Hele said
Its signature brands' system-wide sales declined by 53.7%, affected by the alcohol bans and curfews. The Africa and Middle East region had a system-wide sales decline of 22.9%.
During 2020 the Famous Brands board decided to cease financial assistance to the Gourmet Burger Kitchen (GBK) business.
In October 2020, the GBK business was placed under administration in accordance with UK insolvency legislation. The Group’s investment in GBK was impaired in full (at R1.5 billion, net of tax).
The group awaits the finalisation of the process by the administrator. There are no further operating losses impacting the group's results from the date on which GBK entered administration, the group said.
