Johannesburg - Gold Brands Investments, the owners of the Chesa Nyama fast food franchise, on Friday made a lacklustre debut on the JSE’s alternative exchange (AltX).
After a fun-filled ceremony to mark the listing, Gold Brand Investments shares opened at R2 a share on Friday morning. But the shares soon plummeted and closed down almost 45 percent at R1.12 a share.
Gold Brands Investments chief operating officer Stelio Nathanael said the listing would improve the company’s access to additional capital for future growth.
“We will be raising funds for investment in two new distribution centres in Limpopo and KwaZulu-Natal. Our store network has grown tremendously and we need distribution centres in these provinces to service our stores frequently,” Nathanael said.
Containing costs
Gold Brands chief executive, Praxia Nathanael, said that by establishing new distribution centres in KwaZulu-Natal and Limpopo, the company would bring supply chain closer to its franchisees.
“Containing supply chain costs is critical to maintaining the great value for money, which we deliver to franchisees and consumers. As we have grown, and with stores in KwaZulu-Natal and Limpopo doing well, the costs of distribution from the central kitchen and distribution centre in Centurion are rising,” she said.
She said the company was looking to expand its brands further into the rest of Africa, especially in Botswana, Zimbabwe, Zambia, Namibia, Swaziland and Mozambique.
Gold Brands currently has 300 stores and is looking to add another 100 before the end of this year.
“At the moment, we have 85 paid-up applicants who are waiting for suitable sites,” Stelio Nathanael said.
The company’s other brands include One plus One Pizza, Chicken Wild Wings, as well as Black Steer.
Gold Brands plans to open three new Black Steer stores this month and plans to have a total of 25 stores by year end.
Before opening Chesa Nyama in 2012, the Nathanaels had founded The Fish & Chips Company in 2009, which was later acquired by JSE-listed Taste Holdings.
The listing on Friday comes shortly after Circle Food Group acquired a 41.02 percent stake in Gold Brands in a R100 million transaction.
Circle Food Group’s major shareholder is Circle Capital Ventures, a black-owned investment holding company chaired by Hlumelo Biko.
The Nathanaels, who are founders of Gold Brands, also own 41.02 percent.
The company’s suppliers and franchisees own the remaining 17.96 percent.
Speaking after the listing, Biko said the Circle Food Group was focused on food distribution and retail.
“Outside of Gold Brands, we have three other brands, which we will launch soon. We firmly believe that modern African cuisine needs to be sold in both quick service restaurants like Chesa Nyama and in a sit-down environment. That is what has attracted us to Chesa Nyama,” Biko said.
Biko said the company was supportive of Gold Brands’ aspirations to grow in South Africa and internationally.
“One of the reasons for the listing is to have funds for future growth in South Africa,” Biko said.
“We believe that the Chesa Nyama brand has legs to grow beyond South Africa,” he added.
BUSINESS REPORT