Wrap Text
Voluntary Performance Update
FAMOUS BRANDS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1969/004875/06)
Share code: FBR
ISIN code: ZAE000053328
(“Famous Brands” or “the Company” or “the Group”)
VOLUNTARY PERFORMANCE UPDATE
The Group’s results for the year ended 29 February 2020 will be
published on or about 26 May 2020.
In the interim, shareholders are provided with the following
brief voluntary performance update on the business. This update
pertains to the 52 weeks ended 29 February 2020 for the Group’s
South Africa (“SA”) and rest of Africa and Middle East (“AME”)
regions. The United Kingdom (“UK”) operation narrative relates
to the Gourmet Burger Kitchen Restaurants Limited (“GBK”)
business for the 52-week period ended 23 February 2020.
Collectively this reporting period is referred to as the “review
period”.
The challenging trading conditions outlined in the first half
of the year persisted for the balance of the review period,
featuring subdued consumer sentiment and constrained
discretionary spend. In the SA market, margin pressure increased
in the context of an intensely competitive trading landscape and
sustained low food inflation. Furthermore, frequent power
outages and the lack of transformational economic and socio-
political reforms weighed heavily on economic growth and
business and consumer confidence.
BRANDS
The Group’s restaurants trade in three primary markets, SA, AME
and the UK. The brand portfolio is categorised into Leading
(mainstream) and Signature (niche) brands.
SA
Trading performance over the review period - which includes the
traditional peak SA summer holidays - broadly met management’s
expectations, despite the untimely setback caused by load
shedding in December.
The Group’s Leading brands delivered creditable results for the
period. Most of the brands in this portfolio are established
market leaders and their value offering (price, quality and
service) continued to enjoy strong customer loyalty.
On balance, the Signature brands portfolio performed better than
in the prior comparable period, attributable to implementation
of remedial interventions and further rationalisation of under-
performing sites and offerings. Certain brands remain the
subject of critical review, with the goal being to ensure the
portfolio delivers returns which are proportionally aligned with
investment.
Across our Leading and Signature brands, combined system-wide
sales* increased 6.4%, while like-for-like sales** grew by 2.9%.
Independently, Leading brands system-wide sales rose 5.7%, with
like-for-like sales up 3.5%. Signature brands^ system-wide sales
increased 10.6%, while like-for-like sales declined by 0.8%.
Notably, while low menu pricing assisted with customer
retention, it had an adverse impact on inflationary growth.
AME
Our AME operations recorded system-wide sales growth of 4.1% in
Rand terms, a pleasing return on investments made over recent
years.
UK: GBK
Uncertainty regarding the resolution of Brexit persisted during
most of the reporting period, subduing consumer confidence and
spend in the UK market.
GBK’s results for the review period reflect the difficult and
intensely competitive trading conditions, however, management
is satisfied that ongoing and extensive operational improvements
as well as the benefits derived from the Company Voluntary
Arrangement (“CVA”) restructuring programme continue to impact
positively on the business.
System-wide sales (Sterling) declined by 13.9% (attributable to
the closure of restaurants as part of the CVA process), while
like-for-like sales increased by 3.7% compared to the previous
year.
* System-wide sales refer to sales reported by all restaurants across
the network, including new restaurants opened during the period.
** Like-for-like sales refer to sales reported by all restaurants
across the network, excluding restaurants opened or closed during the
period.
# Leading brands’ sales refer to sales of the Leading brands trading
in SA.
^ Signature brands’ sales refer to SA sales as well as sales cross
border only where the brand is a Joint Venture partnership and the
brand is not managed by its AME management team.
SUPPLY CHAIN: MANUFACTURING AND LOGISTICS
Softer pricing at the front-end of the business impacted on this
division’s revenue growth, as stubbornly low food inflation
inhibited opportunities to increase prices; this, together with
the deliberate strategy to entrench the competitiveness of the
supply chain, served to erode profits.
The financial information on which this voluntary performance
update is based has not been reviewed or reported on by the
Group’s external auditors.
12 March 2020
Midrand
Sponsor
The Standard Bank of South Africa Limited
Date: 12-03-2020 08:30:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
