Famous Brands issues warning

Restaurant group Famous Brands expects a sizeable drop in earnings for the six months ended 31 August 2023.

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The Famous Brands group, which is valued at around R6.5 billion on the Johannesburg Stock Exchange (JSE), is the franchisor for several well-known South African eateries, including among others Steers, Debonairs, Wimpy and Mugg & Bean.

In a trading update statement on Monday, 9 October for H1 2024, the group said it continued to see an improvement in its revenue performance, primarily due to further improvements across its value chain.

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“However, the high levels of sustained load shedding, related cost pressures and a challenging economic environment impacted the group’s profitability,” the statement read.

The statement added that the group expects headline earnings per share to be between 178 cents and 221 cents per share.

This represents a change of between -17% and 3% compared to the same period in 2022.

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Meanwhile, the reported basic earnings per share (BEPS) is expected to be between 174 cents and 225 cents per share.

That represents a decrease of between -33% and -13% from the comparable period in 2022.

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“The reduction in BEPS is predominantly due to the Gourmet Burger Kitchen Limited (GBK) liquidation dividend of R75 million received in August 2022,” the group said.

“Excluding the GBK liquidation dividend, the reported BEPS would have been between 180 cents and 217 cents per share for August 2022.”

Famous Brands confirmed it would publish its results on SENS on or near Tuesday, 24 October 2023.

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The company’s global footprint of franchised stores totalled 2 824 stores as of 2022.

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