AFRICA—Famous Brands Limited has announced a major rollout in southern Africa for its brands Steers, Debonairs Pizza, Fishaways, Mugg and Bean, and Wimpy.
The company said in results for the year ended 29 February 2024 that it plans to implement its leading brands restaurant rollout plan in South Africa, the Southern African Development Community (SADC), and also in Cote d’Ivoire, Ethiopia, Kenya, Nigeria, Mauritius, Saudi Arabia, and the United Arab Emirates.
“This includes boosting our drive-thru presence as new sites become available. We will continue investing in consumer-facing technology and improving our home delivery capabilities. Furthermore, we will safeguard the sustainability of our franchise partners by continuing to offer a lower royalty rate for sales generated during load shedding,” the company said.
The company said South African consumers face several challenges in 2024, including political uncertainty, water shortages, an electricity crisis, elevated food and fuel prices, and higher interest rates.
“Despite this background, consumers are more resilient and spend time at restaurants or ordering takeaway meals. Restaurants and takeaways offer affordable indulgent moments as a reprieve from their daily challenges. The landscape favors established networks over independent operators,” it said.
The board declared a final dividend of 164 cents per share, bringing the total dividend for the year to 302 cents per share.
The SADC market includes Angola, Botswana, Eswatini, Lesotho, Namibia, Malawi, Mozambique, Zambia, and Zimbabwe.
The group operates in Cote d’Ivoire, Ethiopia, Kenya, Nigeria, Mauritius, Saudi Arabia, and the United.
“Furthermore, we will safeguard the sustainability of our franchise partners by continuing to offer a lower royalty rate for sales generated during load shedding. In the medium term, we will evaluate opportunities to divest from non-core assets,” the company said.
“We seek optimal disposal options of such assets to unlock shareholder value. We will maintain a well-managed debt profile and continue to provide attractive returns to shareholders.”
Meanwhile, growth in the delivery channel slowed across all brands, with the collect ordering and drive-through channels continuing to perform strongly. As such, the group opened five new drive-through restaurants during the period.
Leading brands’ system-wide sales improved by 6.4%, while like-for-like sales increased by 4.3%. Famous Brands said these solid results could be attributed to the well-established brands, value offerings, careful management of menu price increases, and access to alternative power solutions.
Casual dining restaurants, namely Wimpy and Mugg & Bean, performed better than quick service restaurants such as Steers, Debonairs Pizza, Fishaways, and Milky Lane. This was partly because they tended to be in shopping centers where landlords could provide alternative power solutions to minimize downtime during power outages.
The signature brands portfolio, which includes restaurants such as Lupa Osteria, Mythos, Salsa, Vovo Telo, and Paul, experienced mixed performance owing to increased load-shedding, the closure of non-performing restaurants, and consumers with low disposable incomes.
Like-for-like sales were up by 6% in this category, while system-wide sales were up by 2.5%. However, the operating profit margin declined to 1.9% from 4%.
Sign up to receive our email newsletters with the latest news updates and insights from Africa and the World HERE
