INTERNATIONAL - Famous Brands told shareholders that it will write down as much as R449 million against its Gourmet Burger Kitchen (GBK) in the UK which will decrease its earnings per share by more than a fifth.
The announcement was made in a mandatory note to shareholders on Thursday morning.
In 2016, Famous Brands bought GBK for R2.1 billion but so far, the investment has not shown any benefits for the company.
The company has since blamed Brexit and other financial setbacks in the UK as the reason for GBK's poor performance.
The impairments will see a decrease of at least 20% in its earnings per share compared to the previous year, Famous Brands said.
Most of the write-down is in intangible assets, but Famous Brands is also reevaluating the value of GBK's property, plant and equipment, and making a nearly R50 million provision for "property related expenses" it did not further explain.
After the announcement, the company's share price dropped more than 8%.
- BUSINESS REPORT ONLINE