Famous Brands interim revenue slumps 48%, hurt by Covid-19 pandemic
JOHANNESBURG - Restaurant franchisor Famous Brands on Monday reported a 48 percent drop in interim revenue to R2 billion and a 240 cents headline loss per share for the six months to August 31, citing the Covid-19 pandemic.
The company, whose brands include Steers, Mugg & Bean, Debonairs Pizza and Fishaways, among many others, said its half-year performance was influenced by the progression of the pandemic and related government restrictions on economic activity in the group’s trading markets.
“Across the geographies in which we operate, the negative financial impact of the pandemic and resultant restrictions has been extremely severe,” it said.
The board did not declare an interim dividend, saying while the company would be able to service its obligations in the foreseeable future, it was prudent to preserve cash to facilitate balance sheet flexibility.
Famous Brands said during Covid-19 lockdowns, its South Africa and United Kingdom operations were entirely shut, with the exception of the South African retail division.
The gradual easing of restrictions in the second half of the interim period enabled the group to re-open parts of the business in compliance with regulations, but significant components remained in hibernation until July.
“Approximately 95 percent of the group’s store network has re-opened, with a small balance temporarily closed. More significant, is the negative impact the pandemic has had on new store openings, which is a key driver of brand momentum,” said Famous Brands.
“In general, aligned with travel restrictions and social distancing measures, the most acute impact has been on our restaurants situated on transit routes, in major malls and those reliant on tourist trade; in comparison, local convenience sites and restaurants in neighbourhood shopping centres fared better.”
Looking ahead, the company noted that the annual ’Black Friday’ shopping extravaganza in November and the holiday season towards the end of December were historically the industry’s peak trading period, but said it was difficult to accurately predict consumer behaviour or spend in the months ahead.
“The school holidays will be both later and shorter than previously, international tourism is likely to be muted, and domestic travel and leisure activities will be constrained by reduced disposable income,” it added.
Famous Brands said it remained concerned about the weak state of the economy which, together with the financial and psychological impact of Covid-19, would constrain consumer discretionary spending and sentiment.
“However, management is cautiously optimistic, barring any further unforeseen events, that the second half of the current financial year will deliver stronger growth than the first half,” it added.
– African News Agency (ANA)