Famous Brands says it has done ok


Famous Brands says it has done ok

Published Date: 2019-09-12 | Source: Stephen Gunnion | Author: Stephen Gunnion

Famous Brands says it has done ok

The restaurant group says its first-half results will be satisfactory, with revenue in line with expectations.

Famous Brands says it will delivery 'satisfactory' first-half results as difficult trading conditions persist across its operations in SA and the UK due to subdued consumer sentiment and spend. The group said the six months to end-August were also characterised by intense competitor activity, which resulted in pressure on its margins.

In a voluntary performance update, the restaurant group said revenue was in line with management's expectations, with growth across the Brands division in SA and Africa and the Middle East (AME). However, it said its Supply Chain division fared less well and its Manufacturing businesses reported a marginal decline in sales. Although its Logistics business grew revenue, profits were negatively impacted by lower export sales, the relocation of its facility in the Free State, higher fuel costs and the reallocation of internal costs to the division.

In SA, Leading Brands grew sales by 6% over the period, with like-for-like sales up 4%. Signature Brands, which includes fancier restaurants like Tasha's, grew sales by 14% as more outlets were opened. Like-for-like sales increased by 1.4%. In AME, system-wide sales improved by 10.3%.

Results from Gourmet Burger Kitchen were in line with management's projections. It said the upmarket burger chain continued to benefit from operational improvements and the Company Voluntary Arrangement (CVA) restructuring programme that was completed over the past year. A CVA allows companies in distress to pay off their debts over a period of time by reaching a voluntary agreement with creditors, including negotiating lower rentals with landlords.

Softer sales and persistently low food inflation negatively affected its Supply Chain business, while Manufacturing lost a major client at Lamberts Bay Foods, resulting in a 39% decline in sales at the plant.

The group said it would issue a trading statement if necessary. Under the JSE's listing requirements, if there is a variance of 20% or more in profit, companies have to alert the market. Its results are scheduled for release on 28 October.

Its shares fell 0.1% to R77.80.

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