Famous Brands final results February 2017
Revenue increased 33% to R5.720 billion (2016: R4.308 million), gross profit jumped 51% to R2.772 billion (2016: R1.838 billion), profit for the year attributable to owners of Famous Brands lowered to R413.7 million (2016: R527.7 million), while headline earnings per share fell to 428 cents per share (2016: 541 cents per share).
As outlined in this announcement, the Group concluded a number of acquisitions during the year to support its robust growth targets. Consequently, the business's gearing is substantially higher than in prior years and the Board has therefore resolved that no final dividend will be declared for the period. As reported in the interim results announcement, it is anticipated that, subject to future acquisitions, payment of dividends will resume in the 2018 financial year.
Management does not envisage an improvement in the Group's home market economy in the near future, and inevitably the downgrade of the country's sovereign credit rating to sub-investment status will harm business and consumer confidence. In the UK market, continued short-term uncertainty is anticipated as Brexit negotiations proceed.
Notwithstanding this context, the Group will remain strongly focused on growth. Management will assiduously implement opportunities within the business to build scale across the Brands and Manufacturing divisions, while also remaining receptive to prospective acquisitions which align with the Group's vision to be the leading innovative branded franchised and food services business in South Africa and selected international markets by 2020.
Among the key priorities are to leverage synergies and enhance efficiencies across the operations to contain costs. Constant innovation and improvement in the business aimed at delivering unique customer experiences will remain management's firm intent. The acquisition of GBK has been significant in furthering the GroupÆs goal to diversify its earnings and expand its geographical footprint. Management is enthusiastic about the opportunities presented by the business and the UK market.
Higher levels of capital expenditure will be incurred in line with the Group's strategy to open additional company-owned restaurants in the UK and invest in building capacity and scale across the business. This investment includes bolstering the human capital component and fortifying the depth of leadership structures across the business to align with growth ambitions. Management is confident that this investment is prudent and will deliver the anticipated benefits.