Famous Brands unfazed by rivals
Famous Brands shrugs off competition from the likes of Domino’s and Starbucks to record a 27% increase in revenue.
|||Johannesburg - Famous Brands shrugged off competition from the likes of Domino’s and Starbucks on Thursday as it recorded a 27-percent increase in revenue, from R1.572 billion to R1.998 billion, for the six months to the end of August.
The leading African fast food and casual dining restaurant franchiser - whose brands include Wimpy, Debonairs Pizza, Mugg & Bean, Milky Lane and Steers - sounded less than satisfied with its results, however. It said that a number of internal and external challenges had meant that the pleasing top-line had failed to translate into corresponding growth in operating profit, which was up by 14 percent, from R303 million to R347 million, during the period under review.
The group – which had indicated a change in strategy to take tighter control over brands in June when it acquired of a controlling stake in Retail Group, its master licence partner in Botswana – pointed to subdued economic conditions in its trading markets as well as sub-optimal integration of new supply chain projects into the business.
As for the much-trumpeted arrival on these shores of big global brands, Famous Brands pointed to very good performances at both its Mugg & Bean chain of coffee shops and Debonairs Pizza.
Mugg & Bean, which delivered double-digit growth in the period under review, was singled out for standout performance and excellent growth potential in South Africa and the Rest of Africa, where Famous Brands has operations in 16 countries.
“Management is confident that Mugg & Bean, together with the group’s other bouquet of niche coffee-related brands, will withstand competition from new global entrants,” the statement said, adding: “Debonairs Pizza turned in a stellar performance, reporting both organic and numeric growth. As predicted by management, the much-publicised arrival of new participants in the pizza category has done nothing to slow down the performance of this brand.”
A dividend per share of 190 cents was declared, a 23-percent improvement on 155 cents paid in the corresponding period last year, on headline earnings of 241 cents per share, 14 percent up on 212 cents last time.
ANA