Johannesburg - Famous Brands said on Monday that the downgrade of South Africa's sovereign credit rating to sub-investment status would harm business and consumer confidence. Famous Brands said its management does not envisage an improvement in the home market economy in the near future.
Notwithstanding this context, Famous Brands said it will remain strongly focused on growth and scale across the brands and manufacturing divisions through innovation and cost containment. This comes as Famous Brands reported a 33 percent increase in revenue to R5.7 billion for the year ended 28 February, up from R4.3 billion the previous year.
The chain restaurant owner said this strong set of results were attributable to a strategic and integrated business model, dedicated leadership, and unwavering focus on constant innovation in the business's branded food service solutions. This includes 20 weeks of turnover contribution from the GBK business, which was acquired with effect from October 2016.
Famous Brands owns Wimpy, Mugg & Bean, Europa, Tasha's, Steers, Debonairs Pizza, Fishaways, Milky Lane, The Bread Basket, and many others. Famous Brands said the acquisition of GBK had been significant in furthering the group's goal to diversify its earnings and expand its geographical footprint, and that management was enthusiastic about the opportunities presented by the business and the UK market. But in the UK market, Famous Brands said it anticipated continued short-term uncertainty as Brexit negotiations proceed.
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Operating profit before non-operational items increased 18 percent to R938 million compared to R792 million in 2016. Headline earnings per share (HEPS) before non-operational items and additional interest costs were up 13 percent to 613 cents per share. Famous Brands also concluded seven acquisitions during the period and 192 restaurants were opened, bringing the group's total brand network to 2,782 restaurants.
The group recognised an impairment loss of R20 million on the investment made in 2013 in UAC Restaurants Limited in Nigeria. The board resolved that no final dividend would be declared for the period as is anticipated that, subject to future acquisitions, payment of dividends will resume in the 2018 financial year.
AFRICAN NEWS AGENCY