Wrap Text
Provisional Summarised Results for the year ended 28 February 2018
Famous Brands Limited
Incorporated in the Republic of South Africa
Registration number: 1969/004875/06
JSE share code: FBR
ISIN: ZAE000053328
PROVISIONAL SUMMARISED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2018
Highlights
Brands
- Strong organic performance in SA business
- Positive local currency growth achieved in the AME region
- Underperformance by GBK business
Logistics
- Improved performance as a result of increased capacity and enhanced efficiencies
Manufacturing
- Strong volume growth
- Revenue up to R7 billion
Up 23%
- Operating profit before non-operational items R890 million
Down 5%
- Operating margin before non-operational items
12.7%
- Headline earnings per share 393 cents
Down 8%
Commentary
Operating environment
Challenging trading conditions persisted in the year under review. Common to all our markets (South Africa, the rest
of Africa, the Middle East and the United Kingdom), the industry featured a highly competitive landscape, limited
discretionary spend and subdued consumer sentiment.
Consistent with this environment, consumers' scrutiny of value intensified, resulting in aggressive pricing pressure
among competitors and further margin squeeze. In general, muted like-for-like sales growth was reported by the industry
across our trading territories.
Group performance
After several consecutive years of intense acquisition activity, management's deliberate strategic focus during the
year was on entrenching sustainable organic growth through growing capability and capacity across our core operations,
Brands, Logistics and Manufacturing operations. The following fundamentals were prioritised: judicious capital allocation
accompanied by high-sweat potential of every capital investment; focus on core competencies, avoiding the influence of
constantly evolving trends and pursuit of only those opportunities that moved the business's needle significantly.
- South Africa
Despite the testing trading conditions, our South African operations performed well across the value chain. The solid
results delivered by our mainstream Leading brands portfolio underpinned a pleasing performance in our Logistics and
Manufacturing businesses, improved efficiencies and strong volume growth respectively.
- Rest of Africa and the Middle East (AME)
In the AME region we pursued our deep and narrow strategy, continuing to invest in and extend our presence in those
markets with proven sustainable potential and exiting those which have consistently underperformed over a lengthy
period.
- United Kingdom (UK)
In the UK market, the food services sector continued to face difficulties, with businesses subject to notably higher
property rates and increased labour and food costs. Despite this, Wimpy reported satisfactory results. While the
Gourmet Burger Kitchen (GBK) operation made some progress in adapting to the challenges experienced in that economy
and industry, and notwithstanding operational improvements reported in the period, impairments recognised in GBK
considerably reduced the carrying value of the business.
Financial results
%
2018 2017 change
Statement of profit or loss and other comprehensive income
Revenue Rm 7 023 5 720 23
Operating profit before non-operational items Rm 890 938 (5)
Operating profit margin % 12.7 16.4 (3.7)
Impairments Rm 373 20
EBITDA before impairment losses Rm 1 093 947 15
Headline earnings per share (HEPS) Cents 393 428 (8)
Statement of cash flows
Cash generated by operations before working capital changes Rm 1 135 932
Working capital changes Rm (12) (137)
Net cash outflow utilised in investing activities Rm (201) (2 257)
Net cash (outflow)/inflow from financing activities Rm (108) 2 424
Cash realisation rate* % 103 84 19
Statement of financial position
Cash and cash equivalents Rm 717 405
Net assets# Rm 4 403 4 651
Net debt^ Rm 2 064 2 450
Net debt/equity % 126 165 39
Total equity Rm 1 632 1 485
Return on equity** % 25 28 (3)
Return on net assets^^ % 20 29 (9)
* Cash generated by operations as a percentage of EBITDA.
# Total assets other than cash and cash equivalents and deferred tax assets, less interest-free trading liabilities.
^ Total interest-bearing borrowings less cash.
** Headline earnings as a percentage of average total equity.
^^ Operating profit before non-operational items as a percentage of average net assets.
The Group's gearing has improved relative to prior year. Debt management is a key priority, and is proceeding
according to agreed financing commitments. In line with the repayment schedule, the Group continues to meet its debt
reduction obligation.
Attainment of strategic imperatives
We made good progress in tightening execution of our vision to be the leading innovative branded franchised and food
services business in South Africa and selected international markets by 2020. With our overriding theme being to focus
on the fundamentals, (our Brands, Logistics and Manufacturing operations), we successfully implemented opportunities to
build scale across our Brands and Manufacturing divisions; leveraged synergies to contain costs across the operations;
pursued constant innovation and improvement to deliver unique customer experiences; up-weighted our human resources
capability and fortified the depth of leadership to achieve our growth ambitions.
While we had forecast higher levels of capital expenditure in line with our goal to open more company-owned restaurants,
particularly in the UK, these plans were put on hold in the short term, in line with our strategy to ensure prudent
capital allocation and pending the improvement of the trading environments in SA and the UK.
Operational reviews
Brands
This portfolio consists of 25 restaurant brands, represented by a network of 2 853 restaurants across South Africa,
the rest of Africa, the Middle East and the United Kingdom. The portfolio is segmented into Leading (mainstream) brands
and Signature (niche) brands, strategically positioned to appeal to a wide range of consumers across the income and
demographic spectrum and across meal preferences and value propositions. The Leading brands are further categorised as
quick service, fast casual and casual dining. Our brand network comprises both franchised and company-owned restaurants.
This division reported revenue of R851 million (2017: R781 million), an improvement of 9%. Operating profit increased
1% to R431 million (2017: R427 million), while the operating profit margin decreased to 50.7% (2017: 54.7%).
Disappointingly, the weak economic environment in all our trading markets dictated against a robust expansion
programme. We opened a net of 182 restaurants during the period (2017: 192) and revamped 248 sites (2017: 231).
System-wide sales rose 8.1% (2017: 11.5%). Significantly, in the subdued economy, while sound like-for-like growth was
reported by some of our brands, most derived improved results from footprint expansion into previously underserviced
markets, attracting new customers and menu price inflation.
- Leading brands portfolio
Solid results were delivered by our mainstream Leading brands portfolio (Steers, Debonairs Pizza, Wimpy, Mugg & Bean,
Fishaways, Milky Lane, Fego Caffé and Wakaberry). During the period, intense focus was directed at upscaling our
delivery offering both through in-house capability and third-party delivery service providers, and all of our brands
enjoyed notably improved levels of participation. Significant resources were also committed to enhancing our capability
in the digital and social media sphere, with the investment recording good returns.
- Signature brands portfolio
Our Signature brands portfolio underperformed our expectations. Investment in this portfolio over recent years has
exerted pressure on margins, but we are satisfied that this impact should be reversed in time when the benefits of
corrective actions start filtering through. During the year we grew the footprint, however the roll-out programme
is behind plan and remains a work in progress, largely determined by the weak economy. We also continued to repair
and rationalise certain of the brands (Europa) and exited others that despite remedial efforts offer no potential
for growth under our stewardship (Giramundo, The Bread Basket, Juicy Lucy, Brewers Guild and McGinty's).
- Rest of Africa and AME
This region's revenue grew in local currency terms, but declined in Rand terms. Combined revenue reported rose 1% to
R253 million (2017: R249 million). Operating profit decreased by 10% to R45 million (2017: R50 million), while the
operating margin decreased to 17.6% (2017: 19.9%). System-wide sales grew by 10.0% (2017: 8.3%). The region contributed
9.3% (2017: 9.3%) to the Group's total system-wide Brands division sales.
Our deep and narrow strategy continued to work well for us. We invested further in our strong markets including Zambia,
Malawi and Mauritius and exited those markets and brands that have no prospects of rehabilitation, including The Bread
Basket in Egypt (five sites).
Our four Leading brands in the AME region (Debonairs Pizza, Steers, Wimpy and Mugg & Bean) contributed 91% of revenue.
In total, 21 restaurants were opened and nine revamped during the period, substantially behind target and largely
a function of the sluggish regional economy and limited access to capital and foreign exchange for prospective
franchisees. The Group is represented in 15 countries in the region.
- United Kingdom
Our UK operation comprises Wimpy UK and GBK (acquired effective 7 October 2016). The businesses are managed and
report independently of each other.
During the review period the average ZAR/GBP exchange rate was GBP1:ZAR17.15 versus GBP1:ZAR18.92 in the prior
comparable period.
- Wimpy UK
Revenue in Rand terms reported for the period decreased to R102 million (2017: R105 million), primarily as a
function of foreign currency translation. Operating profit declined by 20% to R15 million (2017: R19 million),
while the operating margin reduced to 15.0% (2017: 18.1%).
Wimpy recorded a 8.6% increase in revenue in Sterling despite closing three restaurants during the period. This
growth is largely attributable to the brand's entry into the delivery market, with higher sales and improved margins
recorded in the preliminary results reported by the 12 participating restaurants. In addition, collaboration with GBK
to leverage purchase volumes achieved lower prices for core products and enabled menu price increases to be contained
to a minimum.
During the period one restaurant was opened. The network comprises 78 restaurants.
- GBK
The Group's results for the year ended 28 February 2018 include the full-year results of GBK for the first time
since the business was acquired in October 2016. GBK's results reported in this announcement are for the 52 weeks
from 26 February 2017 to 25 February 2018.
An operating loss before non-operational items of GBP3.6 million was reported for the period, while the operating
margin declined to (4.2)%. System-wide sales in the UK (excluding Ireland) were 4.9% higher, but after consistently
outperforming the market since 2011, GBK's like-for-like sales growth trended down over the past year, and as from
Q2 2017 the business underperformed the sector. Like-for-like sales (Sterling) decreased 6.8% compared to the
previous period.
During the year 10 restaurants were opened in the UK and two revamped in Ireland. The total network comprises 106
restaurants.
The prevailing adverse economic and socio-political environment in the UK is widely acknowledged, as is the downturn
in the fast casual dining category. Among the major factors are:
- deteriorating consumer confidence in the context of Brexit, which has caused consumers to become more price sensitive
and value conscious;
- difficult market conditions (including the decline in footfall in malls, and online and delivery sales growing at
the expense of eat-in sales); and
- rapid expansion of the competitive set. The number of premium burger restaurants has grown from 213 in 2014 to 401
in 2017 at a CAGR of 23%. With the entry of new participants, first movers have lost their advantage and market
share, as consumers seek out new novelty offerings.
Despite this environment, the GBK operation made progress in meeting the challenges experienced. A number of highlights
were recorded for the period, including the restructuring of our operations team to align resources with the network to
facilitate more management time in restaurants. The business also successfully opened three trial "dark store" concept
stores. (This format trades purely on a delivery customer base and no traditional bricks and mortar shopfront exists.)
Sales have been steady and in line with expectations. In addition, the Ireland business which comprises five company-owned
and one franchised restaurant was fully integrated into the UK business. This unit delivered pleasing results and further
work on menu alignment and supply chain integration will deliver additional efficiencies.
While GBK's disappointing financial performance over the past year is largely attributable to testing trading conditions,
we recognise that fundamental operational improvements need to be made to return the business to profitability. Among the
key strategic imperatives we will undertake in the forthcoming period are:
- focus on customer satisfaction (the quality of food and condition of our restaurants);
- re-establish a leading position in online delivery;
- improve operational standards;
- review our sites to ensure we are optimally aligned with our consumers and reinstitute the restaurant revamp
programme; and
- stabilise and support the leadership. Following the departure of a layer of management, new leaders have been
appointed, which will improve engagement with staff, and re-establish GBK's high performance culture and discipline.
Supply chain
The Group's integrated strategic Supply Chain division comprises its Logistics and Manufacturing operations, which are
managed and measured independently. Revenue grew 9% to R4.3 billion (2017: R4.0 billion), while operating profit
increased 12% to R509 million (2017: R455 million). The operating profit margin improved to 11.8% (2017: 11.4%). The
three-week work stoppage which took place in the Logistics operation and certain Manufacturing plants during the year
impacted on profitability and margins in the short term, but triggered a drive for efficiencies which will enhance the
business.
Logistics
This division grew revenue by 11% to R3.8 billion (2017: R3.4 billion). Operating profit decreased 17% to R104 million
(2017: R125 million), while the operating margin declined to 2.7% (2017: 3.6%).
The Longmeadow distribution centre, commissioned late in 2016, continued to create efficiencies, with the division's
second half performance improving on the first half. During the year, we also commissioned a satellite Logistics
cross-dock facility in Polokwane. Notwithstanding these capacity enhancements, constraints in our Western Cape and Free
State regions still exist and corrective action has been prioritised for the year ahead.
Capital expenditure of R10 million (2017: R32 million) was incurred primarily on fleet upgrades.
Manufacturing
Revenue for the period rose by 24% to R2.9 billion (2017: R2.3 billion). Operating profit grew by 23% to R405 million
(2017: R330 million), while the operating margin declined to 14.2% (2017: 14.3%).
Strong growth was reported by Famous Brands' Cater Chain and Cheese Company, both plants benefiting from significant
capital expenditure investments in the previous year which facilitated take-on of new and previously outsourced products.
When we acquired Lamberts Bay Foods in August 2016, we committed to implement strategies to improve inventory management,
reduce capacity constraints and ramp up production to meet demand. Good progress has been achieved in all respects and
during the review period we successfully turned around the business.
The Manufacturing division incurred capital expenditure of R31 million (2017: R29 million) on machinery, equipment and
plant upgrades.
Associates
The Group holds strategic stakes in the following entities: UAC Restaurants Limited - more popularly known as Mr Bigg's
(49%), By Word of Mouth (49.9%) and Sauce Advertising (35%).
- UAC Restaurants Limited
During the period our key focus was on achieving higher levels of operational compliance and reducing historical
debt in the operation. A range of factors had a negative impact on results, including the weak economy, security
challenges in the north and south east of the country and significantly higher electricity tariffs. The devaluation
of the local currency resulted in revamp delays and the cancellation of certain projects. Our programme to repair
the Mr Bigg's network resulted in us closing 17 non-performing sites, bringing the network to 99 restaurants.
Our continued priority focus in the forthcoming period will be on consolidation, building strong local market
identification and regaining a voice among consumers for the Mr Bigg's brand. We remain optimistic that our remedial
efforts will start delivering good results in the forthcoming year.
- By Word of Mouth
In our 2017 report we outlined our goal to enter the premium home meal replacement retail space through high-end
standalone stores offering bespoke products. This goal was achieved in March 2018, with the launch of our first
"Frozen for You" retail store in Dainfern Square, Gauteng. The concept comprises a retail offering (product is
bought in store) or an online component (ordered online and delivered to the customer's door). The premium product
has been favourably received by consumers and pending availability of suitable sites, plans are in place to open
additional retail outlets over the course of the year.
Issues facing our industry
- Drought
In light of the sustained drought in the Eastern and Western Cape it is incumbent on our business to respond
appropriately to the water shortage specifically, but also to improve awareness of all utilities usage across the
Group in all regions. During the review period we introduced programmes in our Western Cape distribution and
manufacturing operations which reduced water consumption by 50%. While the nature of our business requires ongoing
water consumption, we will continue to be receptive and responsive to opportunities to sensitise behaviour and limit
usage wherever practicable.
- Food safety
Our food safety assurance
Our customers' safety and their satisfaction with our products is of primary importance to us, and we treat food
safety as a key priority at all times. In this regard, our limited range of ready-to-eat meat products is manufactured
in a world-class FSSC 22000-certified processing plant and we have strong internal processes to manage any potential
food safety risks to the consumer. Our operations are managed by highly qualified food technologists and specialists
and our manufacturing processes are regularly audited to ensure compliance with relevant regulations and prevention of
potential food contamination.
On 4 March 2018 the Minister of Health made a public announcement regarding the outbreak of Listeriosis in South Africa
and evidence of the Listeria bacteria in the products of certain other local manufacturers.
All the meat served in our restaurants is cooked at high temperatures prior to consumption which mitigates against
the risk of bacterial infection (including Listeria). Furthermore, on 5 March following the Minister of Health's
announcement, management took voluntary precautionary measures to withdraw all other ready-to-eat meat products
(i.e. those not cooked at high temperatures during the cooking process in our restaurants), from the menu with
immediate effect. These products were also immediately isolated at restaurant level across the restaurant network,
thus no ready-to-eat meat products produced prior to 5 March have been sold or consumed by customers in our restaurants.
Management is therefore satisfied that there is no risk to the health or safety of our consumers. In line with the
Group's routine and uncompromising food safety regime all menu items that have been withdrawn will not be reintroduced
until further notice, and only once we are entirely satisfied that the products meet specified internal and external
standards.
Changes to the composition of the Board
With effect from 9 November 2017, Messrs Panagiotis (Peter) Halamandaris, Theofanis Halamandaris and Periklis Halamandaris
retired from the Board. We would like to record our appreciation for their vital contribution to the Company since it was
founded by them in 1971, as well as to the Board over the past 23 years since the business listed in 1994. While they have
retired from the Board, their legacy at Famous Brands will endure.
Other Board changes made during the period were:
- resignation of Mr RM Kgosana, independent non-executive director (effective 29 September 2017);
- appointment of Mr CH Boulle as interim chairman of the Audit Committee (effective 2 October 2017);
- appointment of Mr Nicolaos (Nik) Halamandaris as non-independent non-executive director (effective 9 November 2017);
- appointment of Ms Emma Mashilwane as independent non-executive director (effective 1 December 2017);
- retirement of Mr Kevin Hedderwick, independent non-executive director (effective 16 January 2018). After an
accomplished 18-year career with the Group, Kevin retired during the period. The Board wishes to thank him for the
enormous role he played in building Famous Brands into the business it is today; and
- reappointment of Mr Ian Isdale as Company Secretary (effective 1 March 2018 to 28 February 2019).
Subsequent events
In 2005 the Group acquired Trufruit (Pty) Ltd, to produce fruit juice in various formats for the Group's restaurant
network and third-party customers. The business continued to be managed by the founder, Evan Antel. Subsequent to the
year ended 28 February 2018, and with effect from 1 April 2018, the Group concluded a joint venture agreement with
Mr Antel, whereby a 30% stake in the business was sold back to him. Mr Antel will manage the new entity, Cool Site
Trading (Pty) Ltd. The nature of business will remain unchanged. The transaction outlined will not have a material
impact on the performance of the Group.
Looking forward
The Group's strategic intent is clearly defined: to grow capability, capacity and scale across branded franchised,
manufacturing and food services spaces. To achieve this, we will apply an uncompromising filter to unclutter the
business and advance targeted growth.
- Brands
A further 211 restaurants are planned for opening in the current financial year and 306 revamps are planned.
South Africa
Growth will be driven by our Leading brands. In line with our strategy to allocate investment in proportion to the
anticipated return, we will commit further resources to entrenching our leadership position in the categories we
trade in through supporting sustained groundbreaking campaigns, expanding our home delivery offering and enhancing
our digital and social media presence. We will continue to monitor our site portfolio to ensure our footprint is
optimally aligned with our market.
AME
Our focus will remain on growing the footprint and contribution of our four Leading brands in the region (Debonairs
Pizza, Steers, Wimpy and Mugg & Bean). Priority initiatives will include trialling a delivery capability, strengthening
the marketing function and aligning social media platforms with our SA brands. The Mr Bigg's operation will remain the
subject of ongoing rehabilitation.
UK
Consumer sentiment is likely to remain subdued in the inflationary and uncertain economic and political Brexit
environment. Declining foot traffic in malls will be exacerbated by the oversupply of restaurants as landlords continue
to replace failing retailers with more food offerings; online competition will increase due to the low barriers to entry
and labour supply challenges may arise as tighter immigration rules make it more difficult for operators to hire EU
citizens.
Despite this context, the remedial measures outlined in this report are expected to deliver improvements in the GBK
business. With the new management and intensified oversight of the business in place we are satisfied that we can reverse
recent declines. In the year ahead our focus will be on those key initiatives which will ensure optimal allocation of our
resources and deliver the best return on investment. We are optimistic that improvements will be derived from re-engaging
with our customers and our staff, re-establishing GBK's gold standard, and streamlining and investing in core operations.
We recognise that GBK's contribution to profitability may take longer than initially anticipated, but we remain
optimistic that our long-term investment strategy was sound and that the operation will add value to the Group in time.
- Logistics
We have commenced developing and will implement a logistics upgrade programme to address short, medium and long-term
logistics capacity needs, with immediate focus on the Western Cape and Free State.
Manufacturing
Further investment in our meat, cheese and coffee plants will be made, aimed at improving efficiencies and enhancing
capacity. Following a successful pilot trial in three of our plants, we will also be rolling out a standardised system
and approach to managing all facilities, which will leverage additional efficiencies.
Prospects
Trading conditions are expected to remain challenging. Intense competition will remain a key feature, while sustained
demand from consumers for value will continue to squeeze margins.
A degree of optimism is evident in South Africa following recent leadership changes in government, the strengthening of
the local currency, the decline in interest rates and stabilisation of our credit rating status. However, consumers'
discretionary spend will remain constrained with the recent VAT increase to 15%, low wage increases, personal
indebtedness and high levels of unemployment persist in our economy.
We are optimistic about our AME operations and recognise that with time and patience we will derive good returns from
investments made over recent years.
In the UK market, operational improvements introduced in the GBK business are expected to have a positive impact on
performance, although we are mindful that the headwinds facing that economy and category specifically will remain
challenging.
We, the Board and management are resolute in our growth strategy to focus on the three key pillars of the business, namely
Brands, Logistics and Manufacturing. Our priority will be to ensure that the projects we expend the most energy and
effort on deliver a proportional return on investment. Our resilient business model, high performance culture and
steadfast focus on the fundamentals of our business will continue to serve us well.
Dividend
Following the acquisition of a number of businesses in the 2017 financial year, undertaken to meet robust growth targets,
the Group's gearing is substantially higher than in prior years. In the interim results announcement published on
30 October 2017, it was advised that the Board and management were reviewing the options available to ensure that the
allocation of capital reserves would optimise the return on investment for shareholders in the future. In this light and
following a capital structure review to ensure appropriate levels of debt and prudent capital allocation practices, the
Board has resolved that no dividend is declared for the period under review.
A live webcast of the Group's results presentation will be held at 11:30 (SAST) on 24 May 2018.
To pre-register link to: http://themediaframe.eu/links/famousbrands180524.html
On behalf of the Board
SL Botha DP Hele
Independent Chairman Chief Executive Officer
24 May 2018
Audit opinion
These summarised consolidated financial statements for the year ended 28 February 2018 have been derived from the
audited consolidated financial statements of Famous Brands Limited for the year ended 28 February 2018, on which the
auditors, Deloitte & Touche, have expressed an unmodified audit opinion.
A copy of the auditor's report, together with the accompanying financial information, can be obtained from the
company's registered office. The auditor's report and the audited consolidated financial statements are available
on the company's website (www.famousbrands.co.za).
The information as set out in this announcement has not been audited.
The Board of Directors of Famous Brands takes full responsibility for the preparation of this provisional report and
for ensuring that the financial information has been correctly extracted from the underlying financial statements.
Summarised consolidated statement of financial position
as at 28 February 2018
2018 2017
Note R000 R000
ASSETS
Non-current assets 3 983 129 4 315 513
Property, plant and equipment 5 1 339 789 1 397 601
Intangible assets 6 2 547 845 2 818 755
Investments in associates 80 926 83 083
Deferred tax 14 569 16 074
Current assets 1 922 662 1 570 940
Inventories 436 102 454 656
Current tax assets 99 132 38 174
Trade and other receivables 670 440 649 290
Cash and cash equivalents 716 988 428 820
Total assets 5 905 791 5 886 453
EQUITY AND LIABILITIES
Equity attributable to owners of Famous Brands Limited 1 505 598 1 383 509
Non-controlling interests 126 429 101 805
Total equity 1 632 027 1 485 314
Non-current liabilities 3 014 460 3 407 380
Borrowings 14 2 513 489 2 740 744
Derivative financial instruments 32 370 196 469
Lease liabilities 86 355 80 122
Deferred tax 382 246 390 045
Current liabilities 1 259 304 993 759
Non-controlling shareholder loans 7 500 22 130
Derivative financial instruments 159 555 23 381
Lease liabilities 11 125 6 548
Trade and other payables 770 720 790 891
Provisions 7 32 851 -
Shareholders for dividends 2 221 2 221
Current tax liabilities 8 068 10 109
Borrowings 14 267 071 114 853
Bank overdrafts 193 23 626
Total liabilities 4 273 764 4 401 139
Total equity and liabilities 5 905 791 5 886 453
Summarised consolidated statement of profit or loss and other comprehensive income
for the year ended 28 February 2018
2018 2017 %
Note R000 R000 change
Revenue 7 023 095 5 720 363 23
Cost of sales (3 254 591) (2 948 744)
Gross profit 3 768 504 2 771 619 36
Selling and administrative expenses (2 878 246) (1 833 571) 57
Operating profit before non-operational items 890 258 938 048 (5)
Non-operational items 9 (372 592) (120 755)
Operating profit including non-operational items 517 666 817 293 (37)
Net finance costs (251 345) (131 557)
Finance costs (304 687) (184 389)
Finance income 53 342 52 832
Share of profit of associates 3 906 4 314
Profit before tax 270 227 690 050 (61)
Tax (206 876) (235 246)
Profit for the year 63 351 454 804 (86)
Other comprehensive income, net of tax:
Exchange differences on translating foreign operations* 21 440 (245 603)
Pre-tax exchange differences on translating foreign operations 22 754 (252 681)
Tax effect on translating foreign operations (1 314) 7 078
Movement in hedge accounting reserve* (3 920) (2 704)
Effective portion of fair value changes of cash flow hedges (5 445) (3 867)
Tax on movement in hedge accounting reserve 1 525 1 163
Total comprehensive income for the year 80 871 206 497
Profit for the year attributable to:
Owners of Famous Brands Limited 21 618 413 747 (95)
Non-controlling interests 41 733 41 057
63 351 454 804
Total comprehensive income attributable to:
Owners of Famous Brands Limited 39 138 165 440
Non-controlling interests 41 733 41 057
80 871 206 497
Basic earnings per share (cents)
Basic 8.1 22 414 (95)
Diluted 8.1 22 413 (95)
* This item may be reclassified subsequently to profit or loss.
Summarised consolidated statement of changes in equity
for the year ended 28 February 2018
2018 2017
R000 R000
Balance at the beginning of the year 1 485 314 1 550 599
Issue of capital and share premium 13 635 6 121
Share-based payment charge to profit or loss 26 600 26 306
Put-options over non-controlling interests* 42 716 (73 233)
Total comprehensive income for the year 80 871 206 497
Payment of dividends (17 182) (227 512)
Non-controlling interest arising on business combination - 1 033
Change in ownership interests in subsidiaries 73 (2 929)
Contingent consideration - (1 568)
Balance at the end of the year 1 632 027 1 485 314
* Related to put-options forfeited during the year (2017: related to put-options raised on
non-controlling interests).
Summarised consolidated statement of cash flows
for the year ended 28 February 2018
2018 2017
R000 R000
Cash generated before working capital changes 1 135 121 931 852
Working capital changes (12 201) (136 590)
Decrease/(increase) in inventories 18 768 (91 118)
Increase in trade and other receivables (12 730) (16 033)
Decrease in trade and other payables (18 239) (29 439)
Cash generated from operations 1 122 920 795 262
Net interest paid (207 440) (84 628)
Tax paid (274 386) (214 715)
Cash available from operating activities 641 094 495 919
Dividends paid (17 182) (227 164)
Net cash inflow from operating activities 623 912 268 755
Cash utilised in investing activities
Additions to property, plant and equipment (192 588) (282 440)
Intangible assets acquired (38 531) (40 807)
Proceeds from disposal of property, plant and equipment 29 171 10 004
Net cash outflow on acquisition of subsidiaries (2 589) (1 897 991)
Net cash outflow on acquisition of associate - (50 573)
Dividends received from associate 3 149 4 550
Net cash outflow utilised in investing activities (201 388) (2 257 257)
Cash flow from financing activities
Borrowings raised - 2 484 979
Borrowings repaid (106 667) -
Underwriting and participation fees paid on borrowings raised - (62 073)
Repayment of amounts due to non-controlling shareholders (14 630) (2 315)
Proceeds from issue of equity instruments of Famous Brands Limited 13 635 6 121
Acquired from non-controlling interests in subsidiaries - (2 929)
Net cash (outflow)/inflow from financing activities (107 662) 2 423 783
Net increase in cash and cash equivalents 314 862 435 281
Foreign currency effect (3 261) (35 971)
Cash and cash equivalents at the beginning of the year 405 194 5 884
Cash and cash equivalents at the end of the period* 716 795 405 194
* Comprises cash and cash equivalents of R717 million (2017: R429 million) and bank overdrafts of R0.2 million
(2017: R24 million).
Primary (business units) and secondary (geographical) segment report
for the year ended 28 February 2018
2018 2017 %
Note R000 R000 change
Revenue
Brands* 851 021 780 887 9
Supply Chain 4 327 642 3 983 297 9
Manufacturing 2 850 530 2 300 418 24
Logistics 3 779 812 3 415 746 11
Eliminations (2 302 700) (1 732 867) 33
Corporate** 10 878 2 800
South Africa 5 189 541 4 766 984 9
International 1 833 554 953 379 92
United Kingdom (UK) 1 580 947 704 182 125
Rest of Africa and Middle East (AME) 252 607 249 197 1
Total 7 023 095 5 720 363 23
Operating profit before non-operational items
Brands* 431 170 426 755 1
Supply Chain 509 114 454 671 12
Manufacturing 405 171 330 103 23
Logistics 103 943 124 568 (17)
Corporate (49 873) (48 463)
South Africa 890 411 832 963 7
International (153) 105 085 (100)
UK (44 671) 55 468 (181)
AME 44 518 49 617 (10)
Total 890 258 938 048 (5)
UK (68 592) -
Impairment 5 (68 592) -
Corporate (758 315) (483 244)
Non-operational items, excluding impairment 9 - (100 755)
Impairment 6 (304 000) (20 000)
Net finance costs (251 345) (131 557)
Share of profit of associates 3 906 4 314
Tax (206 876) (235 246)
Profit for the year 63 351 454 804 (86)
* Previously categorised as Franchising and Development.
** Includes restaurant development revenue generated through a non-wholly owned subsidiary established during the
year under review.
Statistics and ratios
2018 2017 %
R000 R000 change
Basic earnings per share (cents)
Basic 22 414 (95)
Diluted 22 413 (95)
Headline earnings per share (cents)
Basic 393 428 (8)
Diluted 392 426 (8)
Ordinary shares (000)
in issue 99 977 99 862
weighted average 99 872 99 842
diluted weighted average 100 231 100 092
Operating profit margin (%) 12.7 16.4
Net/debt equity (%) 126 165
Net asset value per share (cents) 1 632 1 487
Notes to the summarised consolidated financial statements
for the year ended 28 February 2018
Famous Brands Limited (the "company") is a South African registered company. The summarised consolidated financial
statements of the company comprise the company and its subsidiaries (together referred to as the Group) and the
Group's interest in associates.
1. Statement of compliance
These summarised consolidated financial statements have been prepared in accordance with the framework concepts
and the measurement and recognition requirements of International Financial Reporting Standards (IFRS) and its
interpretations adopted by the International Accounting Standards Board in issue and effective for the Group at
28 February 2018, and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and
Financial Reporting Pronouncements as issued by Financial Reporting Standards Council, and as a minimum contains
the information required by IAS 34: Interim Financial Reporting, the JSE Listings Requirements, and the Companies
Act of South Africa.
2. Basis of preparation
The summarised consolidated financial statements do not include all the information and disclosures required for
the full set of audited consolidated financial statements, and should be read in conjunction with the full set of
the audited Annual Financial Statements, which are available on our website at www.famousbrands.co.za.
The Group's audited Annual Financial Statements and the summarised consolidated financial statements as at and for
the year ended 28 February 2018 were prepared on the going concern basis. The accounting policies applied in the
presentation of the summarised consolidated financial statements are in terms of IFRS and are consistent with those
applied for the year ended 28 February 2017, except for new standards that became effective for the Group's financial
period beginning 1 March 2017, refer note 3.
The consolidated financial statements were prepared on the historical cost basis, under the supervision of
Kelebogile (Lebo) Ntlha, Group Financial Director.
3. Changes in accounting policies
The Group has adopted all the new, revised or amended accounting standards which were effective for the Group from
1 March 2017, none of which had a material impact on the Group.
2018 2017
R000 R000
4. Capital expenditure and commitments
Invested 231 119 326 274
Property, plant and equipment 192 588 285 467
Intangible assets 38 531 40 807
Authorised, not yet contracted* 205 648 426 163
Property, plant and equipment 178 346 419 760
Intangible assets 27 302 6 403
* Authorised capital expenditure has reduced in line with the revised GBK store roll-out
plan.
2018 2017
R000 R000
5. Property, plant and equipment
Opening balance 1 397 601 286 448
Additions 192 588 285 467
Acquired in business combinations - 992 605
Government grant - (2 992)
Foreign currency translation 21 102 (64 489)
Disposals (21 496) (5 091)
Depreciation (181 414) (94 347)
Impairment (68 592) -
Closing balance 1 339 789 1 397 601
Impairment
An impairment of R69 million (2017: Rnil) was recognised during the year under review related to various categories
of property, plant and equipment at a GBK restaurant level.
To determine the impairment to be processed, the affected property, plant and equipment was valued using value-in-use
calculations at a site level. The recoverable amount for sites where impairment indicators were identified was determined
to be R18 million. The key assumptions used in calculating the recoverable amount include the discount rate and the
long-term growth rate. The long-term (beyond 10 years) growth rate is 2.2%, but some sites with leases expiring in
less than 10 years have varied growth rate assumptions which range between 3% and 6%. The discount rate used in measuring
value-in-use was 5% per annum. Refer to page 3 for events leading to the impairment. Judgement has been exercised in
determining which stores to impair. Should other stores' performance not be in line with that forecast, additional
impairments may arise. Similarly, if impaired stores perform better than expected, the impairment recognised may be
reversed.
Sensitivity analysis
An increase/(decrease) of 1% in the discount rate would result in a decrease/(increase) in the impairment charge of
R15 million (R18 million). An increase/(decrease) in the long-term growth rate of 1% in the forecast profits will
result in a decrease in the impairment charge of R6 million (increase R6 million).
6. Intangible assets
Opening balance 2 818 755 1 095 888
Additions 38 531 40 807
Acquired in business combinations - 1 888 402
Foreign currency translation 21 920 (186 787)
Disposals (5 963) (3 955)
Amortisation (21 398) (15 600)
Impairment (304 000) -
Closing balance 2 547 845 2 818 755
Impairment
The GBK business acquired in the prior period was assessed as a cash-generating unit. The goodwill amounting to
R40 million (2017: R342 million) and brand name amounting to R1.38 billion (2017: R1.37 billion) which arose on
the acquisition of the business was allocated to this cash-generating unit's carrying amount for the purpose of
its impairment assessment. The recoverable amount of the cash-generating unit was determined on the basis of fair
value less cost to sell, which amounted to R1.9 billion. The fair value used in determining the recoverable amount
of the cash-generating unit is based on an income approach valuation method including a present value discounting
technique using level 3 inputs. Key assumptions used in the valuation includes the probability that the
cash-generating unit will achieve the set profit forecasts which includes like-for-like growth rates, the discount
rate and the store roll-out plan.
Like-for-like growth rates have been based on past performance adjusted for current and expected economic conditions.
The discount rate is determined based on current market rates and observable input, adjusted for risk associated
with the business. The future profits were forecast over a period of 10 years applying like-for-like sales growth
rates which start at 0% increasing to 3% over the 10-year period. A long-term growth rate of 2.2% per annum was
set for the years subsequent to the forecast. A discount rate of 8.0% (2017: 9.3%) was applied.
An impairment of R304 million was recognised during the current year for the cash-generating unit. The impairment
was recognised as a result of the unexpected poor GBK performance and continued subdued market in the UK.
Sensitivity analysis on fair value less costs to sell
- An increase (decrease) of 1% in the discount rate will result in a decrease (increase) in the recoverable amount
of R299 million (R393 million).
- A decrease (increase) in the like-for-like growth of 1% in the forecast sales will result in a decrease (increase)
in the recoverable amount of R637 million (R663 million).
- An increase (decrease) of 1 store per year in the roll-out plan results in an increase (decrease) in the
recoverable amount of R59 million (R53 million).
Changes in key assumptions as well as the actual cash flows achieved compared to those forecast can result in further
impairments in the GBK business. The model is reliant on a certain level of economic recovery post-Brexit.
2018 2017
R000 R000
7. Provisions
Opening balance - -
Amounts raised during the year 32 851 -
Closing balance 32 851 -
The provisions relate to property-related expenses at GBK restaurant level.
The provision has been made for the lower of the costs of closure or the cost of continued operation of certain
stores in GBK. This amounted to R33 million (2017: Nil). The key assumptions in determining the provision include
the expected time until the lease can be assigned and the discount to standing rent which will have to be paid
in order to attract an assignee.
Judgement has been exercised in determining which stores require property-related provisions. Should other stores'
performance not be in line with that forecast, additional provisions may be required. Similarly if the identified
stores perform better than anticipated, the provision raised may be reversed.
8. Basic and headline earnings per share
2018 2017
Gross Income Gross Income
amount tax Net amount tax Net
R000 R000 R000 R000 R000 R000
8.1 Basic earnings per share
Profit attributable to equity holders
of Famous Brands Limited 21 618 - 21 618 413 747 - 413 747
Basic and diluted earnings 21 618 - 21 618 413 747 - 413 747
Basic earnings per share (cents)
Basic 22 414
Diluted 22 413
2018 2017
Gross Income Gross Income
amount tax Net amount tax Net
Note R000 R000 R000 R000 R000 R000
8.2 Headline earnings per share
Basic earnings 8.1 21 618 - 21 618 413 747 - 413 747
Adjustments: 370 881 479 371 360 12 829 268 13 097
Profit on disposal of property, plant and
equipment (1 711) 479 (1 232) (958) 268 (690)
Gain on bargain purchase - - - (6 213) - (6 213)
Impairment 372 592 - 372 592 20 000 - 20 000
Headline earnings and diluted headline earnings 392 499 479 392 978 426 576 268 426 844
Headline earnings per share (cents)
Basic 393 428
Diluted 392 426
2018 2017
R000 R000
9. Non-operational items
Impairment* 372 592 20 000
Arising from business acquisitions - 100 755
Derivative loss on call option utilised to hedge purchase price - 33 253
Foreign exchange loss on initial recognition of investment - 23 295
Professional fees - 50 420
Gain on bargain purchase - (6 213)
372 592 120 755
* The impairment is not deductible for tax purposes. This has impacted the Group's
effective tax rate.
10. Related-party transactions
The Group entered into various sale and purchase transactions with related parties, in the ordinary course
of business, on an arm's length basis. The nature of related-party transactions is consistent with those
reported previously.
11. Financial instruments
Accounting classifications and fair values
The table below sets out the Group's classification of each class of financial assets and liabilities, as well
as a comparison to their fair values. The different fair value levels are described below:
Level 1: quoted prices (adjusted) in active markets for identical assets or liabilities that the Group can access
at the measurement date.
Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly or indirectly.
Level 3: unobservable inputs for the asset or liability.
2018 2018 2017 2017
Carrying Fair Carrying Fair
amount value amount value
Level R000 R000 R000 R000
Financial assets
Loans and receivables:
Trade and other receivables 568 514 568 514 518 116 518 116
Cash and cash equivalents 716 988 716 988 428 820 428 820
1 285 502 1 285 502 946 936 946 936
Financial liabilities
Measured at amortised cost:
Trade and other payables 599 941 599 941 648 162 648 162
Shareholders for dividends 2 221 2 221 2 221 2 221
Lease liabilities 7 446 7 446 6 290 6 290
Non-controlling shareholder loans 7 500 7 500 22 130 22 130
Borrowings 2 780 560 2 780 560 2 855 597 2 855 597
Bank overdraft 193 193 23 626 23 626
Fair value through profit or loss:
Derivative financial instruments (put options
over non-controlling interests) 3 176 186 176 186 211 239 211 239
Derivative financial instruments (foreign currency
swaps and foreign exchange contracts) 2 1 028 1 028 102 102
Designated as hedge items
Derivative financial instruments (interest-rate swaps) 2 14 711 14 711 8 509 8 509
3 589 786 3 589 786 3 777 876 3 777 876
Level 3 sensitivity information
The fair values of the level 3 financial liabilities of R176 million (2017: R211 million) were determined by
applying an income approach valuation method including a present value discount technique. The fair value
measurement includes inputs that are not observable in the market. Key assumptions used in the valuation of
these instruments include the probability of achieving set profits targets and the discount rates applied.
An increase/(decrease) of 1% in the discount rate would result in a decrease/(increase) of R3 million (2017:
R7 million). An increase/(decrease) of 10% in the profit forecasts would result in an increase/(decrease) of
R17 million.
Movements in level 3 financial instruments carried at fair value
The following table illustrates the movements during the year of level 3 financial instruments carried at fair
value:
2018 2018 2017 2017
Carrying Fair Carrying Fair
amount value amount value
R000 R000 R000 R000
Put options over non-controlling interests:
Carrying value at beginning of the year 211 239 211 239 124 821 124 821
Initial recognition in equity for new acquisitions - - 73 233 73 233
Unwinding of discount 13 481 13 481 14 813 14 813
Derecognition in equity (42 716) (42 716) - -
Remeasurements (5 818) (5 818) (1 628) (1 628)
Carrying value at end of the year 176 186 176 186 211 239 211 239
2018 2017
R000 R000
12. Business combinations
Summary of cash outflow on acquisition of subsidiaries
BC Hospitality (Pty) Ltd (Lupa Osteria) - 3 958
Chilango (Pty) Ltd (Salsa Mexican Grill)* 2 589 4 985
Lamberts Bay Foods Limited - 73 530
GBK Restaurants Limited (GBK) - 1 815 518
Total cash outflow on acquisition of subsidiaries 2 589 1 897 991
* Relates to contingent consideration.
12.1 Purchase price allocation
There were no business combinations during the year under review. Details of the fair value of identifiable net
assets acquired in the prior year are set out below:
Salsa Lamberts Gourmet
Lupa Mexican Bay Burger
Osteria Grill Foods Kitchen*
2017 R000 R000 R000 R000
Acquisition date 1 May 2016 31 May 2016 1 Aug 2016 7 Oct 2016
Interest acquired 51% 51% 100% 100%
Fair value of assets and liabilities acquired
Property, plant and equipment - 2 566 48 188 941 813
Intangible assets - - 16 277 1 495 809
Inventory - 137 38 361 25 034
Trade and other receivables - 34 36 932 122 622
Provision for doubtful debt - - - (14 332)
Receivables from shareholders - - - -
Cash and cash equivalents 42 1 197 8 11 275
Current tax assets - - 1 314 -
Borrowings - - - (427 301)
Deferred lease liabilities - - - -
Deferred tax - - (16 218) (315 146)
Trade and other payables 89 (1 952) (45 110) (375 471)
Bank overdraft - - (3 538) -
Current tax liabilities (5) - - (2 130)
Amounts due to shareholders - - - -
Net assets acquired 126 1 982 76 213 1 462 173
Non-controlling interests measured at their share
of the fair value of net assets (62) (971) - -
Amount capitalised 64 1 011 76 213 1 462 173
Goodwill/(bargain purchase price gain) 3 936 7 760 (6 213) 364 620
Purchase price 4 000 8 771 70 000 1 826 793
Contingent consideration - (2 589) - -
Cash and cash equivalents (42) (1 197) 3 530 (11 275)
Cash outflow on acquisition of subsidiary 3 958 4 985 73 530 1 815 518
* Transaction costs related to the GBK acquisition are disclosed in non operating items (refer note 9).
12.2 Goodwill and gain on bargain purchase
There was no goodwill arising from the year under review. Goodwill recognised in the prior year arose from
anticipated scale and merger benefits related to franchising, manufacturing and logistics capability.
Gain on bargain purchase arising from the Lamberts Bay Foods acquisition is attributable to fair value adjustments
relating to Property, plant and equipment and Intangible assets.
12.3 Performance of acquired businesses
There were no businesses acquired during the year under review. The table below sets out the performance of
businesses acquired in the prior year.
Salsa Gourmet Gourmet
Lupa Mexican Lamberts Burger Burger
Osteria Grill Bay Foods Kitchen Kitchen
2017 R000 R000 R000 R000 GBP000
Results since acquisition to reporting date
Revenue 3 768 15 029 165 721 598 848 35 241
Operating profit/(loss) 95 3 678 (339) 36 926 2 173
Proforma results from beginning of the
reporting period to the reporting date
Revenue 3 971 19 498 271 429 1 532 785 81 014
Operating profit/(loss) 173 4 535 (4 765) 67 015 3 542
13. UK business segmental results
The table below sets out the performance of the UK business segment in GBP and ZAR respectively.
2018 2017 % change
Revenue £000 92 064 40 722 126
Operating (loss)/profit £000 (2 689) 3 217 (184)
Operating (loss)/profit margin* % (2.9) 7.9 (11)
Revenue R000 1 580 947 704 182 125
Operating (loss)/profit R000 (44 671) 55 468 (181)
Operating (loss)/profit margin* % (2.8) 7.9 (11)
* The difference in operating margin is due to translation of property-related expenses at
transaction date rate versus average rate.
14. Borrowings
Interest rate 2018 2017 2018 2017
Currency Maturity date Nature Margin % Rate % % R000 R000
Unsecured
Long-term borrowings 2 513 489 2 740 744
Short-term portion of borrowings 267 071 114 853
2 780 560 2 855 597
Interest is paid quarterly in arrears.
The company has unlimited borrowing
powers in terms of its Memorandum of
Incorporation.
Terms of repayment
Syndicated facility: 3-year bullet ZAR Sep 19 variable 2.35 3-month 7.16 7.36 720 000 720 000
JIBAR
Syndicated facility: 4-year bullet ZAR Sep 20 variable 2.55 3-month 7.16 7.36 720 000 720 000
JIBAR
Syndicated facility: 5-year amortising ZAR Sep 21 variable 2.45 3-month 7.16 7.36 853 333 960 000
JIBAR
2 293 333 2 400 000
Syndicated facility: revolving credit* GBP 11 Oct 19 variable 2.15 3-month 0.52 0.34 422 799 485 553
LIBOR
Syndicated facility: revolving credit* GBP 11 Oct 19 variable 2.15 1-month 0.49 65 046 -
LIBOR
Transaction costs (37 727) (55 035)
Interest accrued 37 109 25 079
2 780 560 2 855 597
Maturity analysis - capital
Payable within one year 267 071 114 853
Payable between two and five years 2 513 489 2 740 744
2 780 560 2 855 597
* Relates to the £30 million facility referred to below.
Sensitivity analysis
A change of 1% in interest rates at the reporting date would have increased/(decreased) profit or loss by
R28 million (2017: R10 million).
Interest risk management
The Group utilises interest rate swap contracts to hedge its exposure to the variability of cash flows arising from
unfavourable movements in interest rates.
Facilities
Total ZAR overdraft facility in place: R80 million (2017: R190 million). Unutilised portion at year-end: R80 million
(2017: R166 million).
Total GBP borrowings facility in place: £30 million (2017: £30 million). Unutilised portion at year-end: £nil
(2017: £nil).
Guarantees
Famous Brands Limited, Famous Brands Management Company (Pty) Ltd, Mugg and Bean Franchising (Pty) Ltd, Venus
Solutions Limited, Famous Brands UK Limited, GBK Franchises Limited, Lamberts Bay Foods Limited, Famous Brands
Logistics Company (Pty) Ltd, GBK Restaurants Limited, Gourmet Burger Kitchen Limited and GBK Retail Limited have
guaranteed in terms of the syndicated loan agreement:
- Punctual performance by the Group of amounts due in the syndication agreement.
- Immediate payment of amounts due which the Group has not paid.
- To indemnify the finance parties against any cost, loss or liability it incurs as a result of the Group not
paying amounts that are due.
Borrowing restrictions
There are certain restrictions on the financial activities of other covenant subsidiaries within the Group,
who are not obligors, such as restrictions on the ability to raise additional financing.
Underwriting and Participation fees
The unamortised portion of underwriting and participation fees paid have been recognised in the above long-term
borrowings balance. The amortised portion is included within finance costs.
15. Capital management
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going
concern, to provide sustainable returns for shareholders, benefits for other stakeholders and to maintain,
over time, an optimal structure to reduce the cost of capital.
The capital structure of the Group consists of cash and cash equivalents, borrowings (note 14) and equity as
disclosed in the statement of financial position. There are no externally imposed capital requirements.
Financial covenants
The Group's borrowings (refer note 14) are subject to the following financial covenants, which the Group is
in compliance with:
2018 2017
Gross debt/EBITDA* <3.00 <3.25
Interest cover >3.25 >3.00
Free cash flow to debt service >1.20 >1.20
* EBITDA excludes non-operational items.
Gearing
The Group's gearing ratio is set out below:
2018 2017
R000 R000
Borrowings 2 780 560 2 855 597
Bank overdrafts 193 23 626
Cash and cash equivalents (716 988) (428 820)
Net debt 2 063 765 2 450 403
Equity 1 632 027 1 485 314
Gearing ratio** 126% 165%
** Calculated as net debt divided by equity.
Shareholder spread
16. Contingent liabilities
- The Company and its South African subsidiaries have issued an unlimited suretyship in favour of FirstRand Bank
Limited to secure the banking facilities entered into by certain subsidiary companies.
- Guarantees issued by banks in favour of trade creditors totalled R7 million (2017: R9 million).
- The Group's borrowings are unsecured, no pledges have been issued.
- Refer to note 14 for other guarantees and facilities in the Group.
17. Subsequent events
In 2005 the Group acquired Trufruit Pty Limited, to produce fruit juice in various formats for the Group's
restaurant network and third-party customers. The business continued to be managed by the founder, Evan Antel.
Subsequent to the year ended 28 February 2018, and with effect from 1 April 2018, the Group concluded a joint
venture agreement with Mr Antel, whereby a 30% stake in the business was sold back to him. Mr Antel will manage
the new entity, Cool Site Trading Pty Limited. The nature of business will remain unchanged.
2018 2017
% of % of
Number total % of Number total % of
of share- share- Number issued of share- share- Number issued
holdings holdings of shares capital holdings holdings of shares capital
1 - 10 000 6 690 94.17 3 826 686 3.83 10 326 95.10 10 780 911 10.80
10 001 - 50 000 270 3.80 6 095 321 6.10 359 3.31 7 806 411 7.82
50 001 - 100 000 42 0.59 3 003 218 3.00 56 0.52 3 803 295 3.81
100 001 - 1 000 000 82 1.15 26 744 202 26.75 104 0.96 30 157 526 30.20
Over 1 000 000 20 0.28 60 308 008 60.32 13 0.12 47 314 292 47.38
Total 7 104 100.00 99 977 435 100.00 10 858 100.00 99 862 435 100.00
Distribution of shareholders
Individuals 5 816 81.87 24 716 778 24.72 8 424 77.58 29 742 785 29.78
Insurance companies 10 0.14 328 100 0.33 12 0.11 203 682 0.20
Investment trusts 555 7.81 9 259 598 9.26 1 333 12.28 11 577 385 11.59
Other companies and corporate bodies 723 10.18 65 672 959 65.69 1 089 10.03 58 338 583 58.42
Total 7 104 100.00 99 977 435 100.00 10 858 100.00 99 862 435 100.00
Shareholder type
Non-public shareholders 9 0.13 10 908 120 10.91 17 0.16 34 703 520 34.75
Directors and associates 9 0.13 10 908 120 10.91 13 0.12 23 450 356 23.48
Government Employees Pension Fund (holders > 10%) - - - - 4 0.04 11 253 164 11.27
Public shareholders 7 095 99.87 89 069 315 89.09 10 841 99.84 65 158 915 65.25
Total 7 104 100.00 99 977 435 100.00 10 858 100.00 99 862 435 100.00
Fund managers greater than 5% of the issued shares
Coronation Fund Managers 14 448 186 14.45 6 075 661 6.08
Public Investment Corporation 9 022 596 9.02 8 839 996 8.85
LGM Investments 8 367 790 8.37
Total 31 838 572 31.84 14 915 657 14.93
Beneficial shareholders greater than 5% of the
issued shares (excluding directors)
Government Employees Pension Fund 10 230 408 10.23 11 253 164 11.27
Coronation Fund Managers 8 492 531 8.49
LGM Investments 7 755 676 7.76
Halamandaris Theofanis Mr 7 017 598 7.02
Total 33 496 213 33.50 11 253 164 11.27
Total number of shareholdings 7 104 10 858
Total number of shares in issue 99 977 435 99 862 435
Administration
Directors
NJ Adami, SL Botha (Independent Chairman), CH Boulle, N Halamandaris, JL Halamandres,
DP Hele (Chief Executive Officer), ET Mashilwane, K Ntlha (Financial Director),
BL Sibiya, T Skweyiya
Company Secretary
IWM Isdale
Registered office
478 James Crescent, Halfway House, Midrand, 1685
PO Box 2884, Halfway House, 1685
Telephone: +27 11 315 3000
Email: investorrelations@famousbrands.co.za
Transfer secretaries
Computershare Investor Services Proprietary Limited
Registration number: 2004/003647/07
Rosebank Towers, 15 Biermann Avenue
Rosebank, 2196, South Africa
PO Box 61051, Marshalltown, 2107
Sponsor
The Standard Bank of South Africa Limited
Registration number: 1969/017128/06
Auditors
Deloitte & Touche
Contact information
Tel: +27 11 315 3000
investorrelations@famousbrands.co.za
companysecretary@famousbrands.co.za
Website address: www.famousbrands.co.za
Date: 24/05/2018 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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