FAMOUS BRANDS LIMITED - Famous Brands defies retail slump to deliver strong quarterly results

Famous Brands defies retail slump to deliver strong quarterly results

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 Group”)




          FAMOUS BRANDS DEFIES RETAIL SLUMP TO DELIVER
                     STRONG QUARTERLY RESULTS


Johannesburg, Wednesday, 19 June 2013:   Famous Brands has reported
robust results across the Group’s business - encompassing its
branded franchise network, logistics, and manufacturing operations -
for the quarter March to May 2013. System-wide franchise sales
increased 16.8%, comprising a 16% improvement in South Africa and a
27.2% improvement in sales in the rest of Africa region. Like-on-
like sales grew 9.6%, with South Africa and the rest of Africa
operations delivering growth of 9.3% and 13.2% respectively. he
average weighted menu price increase was 4.25% illustrating the real
growth achieved.

Famous Brands CE Kevin Hedderwick comments, “These results derive
from our extensive portfolio of brands turning in a strong first
quarter performance, underpinned by our growing logistics and
manufacturing capability.”

He says, “Our ‘gorilla’ brands all performed exceptionally well with
most of them recording comparable year-on-year double-digit growth,
notwithstanding the sheer size of these individual businesses and
the fact that their growth comes off a huge base. He adds, “It was
not just our brands which talk to mainstream South Africa that
delivered stellar results, but also the likes of tashas at the
premium niche end of the spectrum, which produced astonishing
growth, turning in a 22% rise in sales versus the prior year.”

During the quarter 34 new restaurants were opened. Hedderwick
notes, “Of the 30 restaurants opened in South Africa, 18 are in new
emerging markets. We are especially pleased with our entry into
these markets where we were previously under-represented and where
our brands are viewed as aspirational. his penetration into new
emerging markets is part of a deliberate strategy to make our brands
available, accessible and affordable.”

“While a moratorium on new liquor licences had hampered the Gauteng
roll-out of the revamped Keg brand, the Group successfully launched
its flagship Keg & Thistle in Durban – the original home of the
brand; two further restaurants, the Keg & Goose in Krugersdorp and
the Keg & Copperfield in Lusaka, will open in June and July
respectively, providing encouraging evidence that our Keg brand is
gaining some momentum,” he says.
New restaurant openings across the brand portfolio will ramp up in
the second quarter of 2013, with 46 restaurants planned.

The Group also recently announced that it would be opening its first
Steers restaurant in Clapham, London, and Debonairs Pizza restaurant
in Mumbai, India.   Hedderwick says that while the Group’s primary
focus is on the African continent, where there is a strong business
case and obvious demand for their brands (such as Clapham and
Mumbai), international markets will be considered. “We’ve long
considered exporting Steers to the UK, fuelled by the constant
requests from expatriates living in London craving a taste of home.
Having researched the market we believe that the timing of this
launch is right, and that our flame-grilled offering will create as
much excitement and recognition in the UK as in South Africa.”

Hedderwick notes that in the current socio-economic environment the
food services industry continues to evolve.   He elaborates on the
key trends shaping the sector at present:

-   A shifting consumer profile (the black middle class has grown
    from 1.6 million people in 2004 to 4.2 million, and their
    disposable income has increased by 35%);

-   Value is ‘the new black’ (the competitive trading environment and
    general economic downturn has trained consumers to look for value
    – which they perceive as price, quality, relevance and
    convenience); and

-   Convenience matters (a lot). Consumers are no longer eating
    three traditional meals a day – these are fragmenting into
    nibbles and bites at non-traditional times – with snacks
    accounting for one in five eating occasions.  Accessibility and
    speed are paramount.

Hedderwick adds, “Particularly strong drivers of growth in the
industry are breakfast and coffee - with ‘all-day’ breakfasts
identified as a key future trend; while coffee is no longer seen as
a meal accompaniment, but is increasingly being purchased as a snack
meal.”

Expanding on the quarterly results, Hedderwick says, “Growth in our
other components of the business was also impressive. The Supply
Chain delivered a 20.8% increase in sales with the Logistics
division contributing  15.8% of that improvement  and   the
Manufacturing division recording growth of 34.6%, including the new
Famous Brands Coffee Company contribution (23.2% excluding the
coffee business).

Hedderwick states, “There is a range of opportunities which we plan
to capitalise on in the period ahead. Amongst those is to unlock
the potential of our new acquisitions including Turn ‘n Tender, The
Famous Brands Great Bakery Company (The Bread Basket’s specialist
bakery facility), Famous Brands Choice Meats Company and of course
growing the volumes and range out of our Coega Cheese company.”
“Additionally, we are enthusiastic about the potential to grow our
presence on the African continent. The rest of Africa is fast
becoming the playground for opportunistic investors and with more
than 12 years’ experience in the region, we believe our strategy to
deepen our presence in specifically targeted markets will continue
to serve us well,” says Hedderwick.

He concludes, “In the current doom-and-gloom environment, I am
encouraged by these results and believe they set the tone for the
Group’s performance for the balance of the current fiscal year.”



This announcement has not been reviewed or reported on by the
Group’s external auditors.

ends


NOTES TO EDITORS
The Group’s brand portfolio at 31 May 2013 comprised 2 175
restaurants.  The Group also manufactures and supplies its
franchisees and the retail trade with a wide range of meat, sauces,
spices, cheese, bakery, ice cream, fruit juice, mineral water,
coffee and other hot beverage products.


For further information:
Kevin Hedderwick                       Del-Maree English
Chief Executive, Famous Brands         Investor Communications
Telephone: 011 651 5812                Mobile: 083 395 8608



Sponsor
The Standard Bank of South Africa Limited

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