Johannesburg - Gold Brands Investments, the owners of the Chesa Nyama fast food franchise, has lost its shine after its value almost halved since it listed on the JSE AltX to much fanfare in February.
Gold Brands has failed to meet market expectations as it traded at 93c a share on Friday compared with R2 a share when it debuted on the JSE last year, and on Friday blamed the slowdown in the economy.
The company reported a R8.9 million profit and R235.5m revenue for the year to February on Friday, while basic earnings a share and headline earnings a share were 10.25c, respectively. No dividend was declared.
Gold Brands, which started in 2012 with one Chesa Nyama at Wits University in Johannesburg, has grown into a franchise chain of 331 stores across five brands. Chief executive Praxia Nathanael said the weak economy had been the company’s biggest drawback.
“The economy has seen a drastic decline in domestic consumer spend for individual consumers and in an attempt to combat the slowdown in consumer spending we have had to absorb many of the costs and be innovative in our menu ideas to ensure consumer affordability, without losing focus on product quality,” the company said.
Despite economic difficulties, its much larger competitors, including fast food owners Famous Brands, with the Debonairs Pizza brand, and Taste Holdings with the Starbucks brand, were expanding.
“We are a baby company next to many of them (Taste Holdings and Famous Brands). We listed on the JSE AltX, not on the main board. Our strategy is different to both of them. They are targeting a different market. We have our own space in the market. They have history,” she said.
Nathanael said she was optimistic that once the market saw the results the share price would see an upturn.
The results were published a day after the JSE warned Gold Brands that its listing would be suspended if it failed to submit provisional financial reports in three months stipulated in the JSE listing requirements.
“We only listed in February. This is our first set of results. We were a bit late, but we have been hectically busy.
“Straight after listing, we went into an audit. We are trying to ensure everything is right. The auditors did not want to publish the results until they were 100 percent,” she said, referring to the late results.
Other than Chesa Nyama outlets, Gold Brands also operates 1+1 Pizza, Opa!Pitaland, Chicken Wild Wings and Blacksteer.
The first Chesa Nyama was opened in Menlyn Shopping centre in Pretoria this year.
“We have continued to see good growth in our Chesa Nyama Brand reaching a milestone of 300 stores, with 41 signed up new applicants who we are in the process of identifying sites for,” Nathanael said.
The company acquired the Blacksteer brand last March and to date 19 new Blacksteer stores have been opened.
1+1 Pizza operates 15 stores, and the company believed its superior product was well placed to becoming one of the leaders in the pizza industry. Collectively Opa!Pitaland and Chicken Wild Wings have 10 operating stores currently.
A new addition to our portfolio is “Hot Chicks”, which was opened in May with two more planned in the near future.
BUSINESS REPORT