Famous Brands sees sharp rise in half-year profit

Famous Brands CEO Darren Hele.

Picture: Daylin Paul

Aftertax profit was boosted by a R121m once-off gain - R141m from a rand hedge on its £120m acquisition of UK chain Gourmet Burger Kitchen, which was reduced by a R20m write down of an investment in Nigeria.

No interim dividend was declared to help reduced debt following a string of acquisitions done during the reporting period. Famous Brands paid a R1.90 interim dividend in the matching period.

As of August 31, the group operated 2,626 restaurants in numerous countries. It opened 75 new restaurants during the reporting period, 64 of which were in SA.

"Having undergone an extensive corporate identity revamp, both Wimpy and Steers reported pleasing double-digit growth, reflecting customers' positive response to their contemporary new image," CEO Darren Hele said in the results statement.

Its rest of Africa and Middle East division contributed 9.7% of the group's sales, up from 9.5% in the matching period.

Regarding its R20m write down of its Nigerian investment UACR which trades as Mr Bigg's, Hele said a number of outlets were closed. "Opportunities to open additional restaurants remain constrained in the current economy, further tempering management's outlook for this business in the short term," he said.

During the review period, the group exited its three restaurants in Tanzania and the Democratic Republic of Congo given those markets' lack of viability.

Its logistics division reported a 24% increase in revenue to R1.66bn while operating profit grew 14% to R49m.

In September, the group commissioned its new Long Meadow primary distribution centre in Gauteng to warehouse dry goods.

Its manufacturing division reported a 53% jump in revenue to R1.3bn and 64% profit growth to R166m.

Recently acquired Lamberts Bay Foods only contributed a month's revenue to this total and its Coega concentrate tomato paste plant is only expected to be completed in February.