FAMOUS BRANDS LIMITED - Trading statement

Trading statement

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”)

Trading statement

In terms of paragraph 3.4 (b) of the JSE Limited (“JSE”) Listing
Requirements, companies are required to publish a trading statement as
soon as they have reasonable certainty that the financial results for the
next period to be reported upon will differ by at least 20% from those of
the previous corresponding period.

Famous Brands is currently finalising its annual results for the twelve
months ended 28 February 2017, which will be released on the Stock Exchange
News Service (“SENS”) of the JSE on 29 May 2017.

In the announcement published on the Stock Exchange News Service (“SENS”)
of the JSE on 1 September 2016, shareholders were advised that the Company
had acquired the entire issued share capital of Gourmet Burger Kitchen
(GBK) Restaurants Limited in the United Kingdom(UK) (“the acquisition”)
for an acquisition consideration of GBP120 million. GBK, which comprised
97 company-owned restaurants at the end of the review period, is widely
known as the market leader in the premium burger category in the UK.

Once-off non-operational items related to the acquisition impacted upon
the Company’s results for the year under review as follows:

  -   A realised derivative loss of R33 million on the call option that
      was utilised to hedge the purchase price of the acquisition. (As a
      result of the Rand strengthening against the British Pound since the
      date of the hedge, this realised derivative loss reversed the
      unrealised derivative gain of R141 million reported in the interim
      results announcement published on SENS on 24 October 2016);
  -   A realised foreign exchange loss of R23 million arising from the
      unfavourable movement in the ZAR:GBP exchange rate between the
      acquisition payment date and the effective date; and
  -   Professional fees related to the acquisition of R50 million.

As previously disclosed in the interim results announcement on 24 October
2016, the Company realised an impairment loss of R20 million on the
investment made in 2013 in UAC Restaurants Limited in Nigeria.

In addition, finance costs increased compared to the prior corresponding
period as a result of increased interest-bearing borrowings.

Accordingly, headline earnings per share (“HEPS”) compared to the
corresponding prior period are expected to be between 15% and 25% lower,
being 460 cents per share and 408 cents per share (2016: 541 cents per
share). Basic earnings per share (“EPS”) compared to the corresponding
prior period are expected to be between 17% and 26% lower, being 439 cents
per share and 389 cents per share (2016: 529 cents per share).

HEPS, before non-operational items and increased interest costs arising
from increased funding (as detailed above), compared to the corresponding
prior period are expected to be between 10% and 24% higher, being 594 cents
per share and 669 cents per share (2016: 541 cents per share). Basic EPS,
before non-operational items and increased interest costs arising from
increased funding, compared to the corresponding prior period are expected
to be between 10% to 24% higher, being 594 cents per share and 670 cents
per share (2016: 541 cents per share).

The financial information on which this trading statement is based has
not been reviewed or reported on by the Company’s external auditors.

Midrand
16 May 2017

Sponsor
The Standard Bank of South Africa Limited

Date: 16/05/2017 04:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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