Wrap Text
Famous Brands Trades Vigorously In Traditionally Sluggish Quarter
FAMOUS BRANDS LIMITED
(Incorporated in the Republic of South Africa)
(Previously Steers Holdings Limited)
(Registration number 1969/004875/06)
Share code: FBR & ISIN code: ZAE000053328
* Like-on-like retail sales up 14% across total network
* Restaurant openings to exceed target of 80
* Debonairs Pizza to open 200th restaurant
* FishAways to open 50th restaurant
* Baltimore Ice Cream turnover up 40%
* Trufruit Juice Company turnover up 25%
Johannesburg, 26 August 2005: Famous Brands" quarterly business review
reveals strong retail growth for restaurants across the group"s brand
portfolio network, well up on the prior year comparative period and ahead of
inflation.
Across the group"s mainstream brands, Steers, Wimpy and Debonairs Pizza,
like-on-like (which excludes new restaurants) retail sales growth was in
excess of 15% on average. In July, Debonairs Pizza delivered its highest
ever retail turnover since opening in 1991, and Steers reported retail sales
that have only once ever been exceeded (in December 2004 - typically a peak
trading period). 32 restaurants have been opened across the brand network
over the past five months. Debonairs Pizza is scheduled to open its 200th
restaurant shortly. Significantly, the group"s FishAways brand has also
delivered a strong performance, and based on growing consumer demand, will
open its 50th restaurant within the next two months.
Chief Operating Officer, Kevin Hedderwick says: "May to end July is
traditionally a fairly sluggish trading period, although we do derive some
benefit from the tail-end of the Easter holidays and the July school
holidays. However, this strong performance from our brands must be
attributed to a range of factors, rather than simply seasonal success. The
strong economic influence wielded by the emerged middle class and the demand
for convenience continues to drive the group"s growth."
Hedderwick elaborates: "We have also complemented the advantages gained
from operating in a buoyant macro economic environment by driving key
strategic imperatives. Our philosophy of "renovation and innovation"
continues to be vigorously, pursued via ongoing upgrades of the individual
retail footprints of our restaurants, whilst ensuring that new menu
offerings serve to surprise and delight. In addition, investment in strong
electronic media campaigns has boosted sales."
Whilst Gauteng remains the group"s core market based on population size,
strong growth was experienced in KwaZulu Natal, the Western Cape, and
surprisingly, the Eastern Cape. Hedderwick attributes this to brand
relevance, product offering and value for money, which customers recognise
and are rewarding the company for.
"Particularly encouraging," says Hedderwick, "is the success of new
restaurants opened in and on the fringes of traditional black areas. These
restaurants have exceeded our expectations and we are optimistic regarding
further new store openings in traditional black areas."
Hedderwick notes that despite the successes achieved by the group,
management is always cognisant that the brands operate in a highly
competitive environment. He says the group is mindful that "affordability,
accessibility and availability" are key to maintaining category leadership.
In terms of recent acquisitions, Hedderwick reports that Baltimore
(manufacturers and distributors of ice cream) and Trufruit (manufacturers
and distributors of fruit juice) have been integrated into the group"s
supply chain and have both delivered turnover improvements of more than 40%
and 25% respectively, based primarily on the enhanced volumes achieved from
supplying product into Famous Brands" franchise network.
With regard to the acquisition of Wimpy, Hedderwick notes that to date capex
of R12 million has been invested in resources and technology to facilitate
integration of the food services supply side of the business, with a further
R10 million budgeted. He notes that the integration has been slower than
originally anticipated: "We still have some way to go before realising the
full benefits of backward integrating the Wimpy food services supply
business, but early indications are positive. We anticipate full
integration within the next two years, which will double the food services
division turnover.
Hedderwick notes: "Based on the past five months we believe we have good
reason to be bullish regarding the remainder of the year, which includes our
peak holiday trading period."
He concludes: "As greater numbers of the population enter the mainstream
economy, and South Africans adopt the global tendency to view Quick Service
Restaurants and casual dining as a way of life, rather than a luxury, we
will continue to prosper in this market."
ends
NOTES TO EDITOR
* Famous Brands" portfolio includes: Steers, Wimpy, Debonairs Pizza,
FishAways, House of Coffees, Brazilian, Whistle Stop and Pouyoukas Foods.
* Famous Brands franchise network currently comprises 1 113 restaurants.
* JSE share code: FBR
FOR FURTHER INFORMATION
Kevin Hedderwick Paris Papageorgiou
Del-Maree English
Chief Operating Officer Group Financial Director
Investor Communications
Famous Brands Famous Brands
Office : 011 651 5812 Office : 011 651 5902
Office: 021 670 2025
Mobile : 083 300 2530 Mobile : 082 453 7042
Mobile: 083 395 8608
Date: 26/08/2005 11:10:10 AM Supplied by www.sharenet.co.za
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