FAMOUS BRANDS LIMITED 
By | SENS- Monday, 28 October 2013 |
| FAMOUS BRANDS LIMITED - Unaudited consolidated interim results for the six months ended 31 August 2013 |
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FBR 201310280004A Unaudited consolidated interim results for the six months ended 31 August 2013 Famous Brands Limited (Famous Brands or the Group) Incorporated in the Republic of South Africa Registration number 1969/004875/06 JSE Share code: FBR ISIN code: ZAE000053328. Unaudited consolidated interim results for the six months ended 31 August 2013 Revenue up 16% to R1 377 million Operating profit up 23% to R254 million Headline earnings per share up 20% to 180 cents Dividends per share up 20% to 130 cents Overview Trading environment The economic climate experienced in the review period remained constrained and the branded food service trading environment fiercely competitive. In addition, heightened industrial action served to create further instability and dampen sentiment in the country. Notwithstanding these subdued conditions, the fast food industry remained relatively buoyant and the incidence of usage continues to grow. Industry statistics* reveal that the percentage of South African consumers aged 16+ who bought fast food over a four week period has increased from 65% (20,4 million) in 2008 to 78% (26,5 million) in 2012. Group performance Famous Brands strong performance in the reporting period is attributable to its unique vertically integrated business model designed to leverage opportunities across its brands, logistics and manufacturing operations, and the deliberate strategy to provide a total food service solution across most LSM categories. The Groups sought-after brands which are strategically populated across the South African landscape, with an ever-growing presence across the rest of Africa, continue to build a loyal following based on their availability, affordability and accessibility. The business model transformation project implemented at the end of the prior period aimed at getting closer to our customers (franchisees) and consumers has delivered encouraging initial results, endorsing the introduction of this intervention. Management is satisfied that this restructuring has positioned the Group to realise its longer-term growth ambitions. Financial results Group revenue increased by 16% to R1,38 billion (2012: R 1,18 billion), while operating profit grew by 23% to R254 million (2012: R207 million). The operating margin rose to 18,4% (2012: 17,5%). Improved profitability was derived from economies of scale achieved across the business and prudent cost containment. The tax rate increased marginally to 28,8% and profit after tax reported for the period rose 23% to R180 million. Basic earnings per share (EPS) and headline earnings per share (HEPS) both increased by 20% to 180 cents per share (2012: 150 cents per share). Diluted EPS rose 22% to 179 cents (2012: 147 cents per share), while diluted HEPS improved by 22% to 180 cents per share (2012: 147 cents per share). Cash generated by operations before changes in working capital increased by 22% to R271 million (2012: R223 million). Working capital absorbed R39 million, resulting in a net cash flow from operating activities of R164 million (2012: R157 million), more than sufficient to service higher dividend payments totalling R143 million. Net capital expenditure of R29 million was incurred on manufacturing capacity expansion and fleet replacement. Borrowings of R117 million, net of cash and cash equivalents of R71 million, represent a mere 4% of equity (2012: 4%). Operational reviews FRANCHISING The Groups footprint as at 31 August 2013 comprised 2 180 restaurants across Africa, the Middle East, India and the United Kingdom (UK). SOUTH AFRICA Total revenue reported by this division increased by 16% to R261 million. Operating profit rose 21% to R158 million, with a strong improvement in the operating margin to 60,7% from 57,9%. System-wide sales (including new restaurants) grew 14,9% while same store sales increased 8,5%. Improved like-on-like sales were reported across the Groups portfolio of 23 brands, (with the exception of three niche brands that are currently undergoing further development), underlining the Groups deliberate total food service solution strategy. The review period featured a slow-down in frequency of visits to Casual Dining Restaurants (CDR), a trend which benefitted Quick Service Restaurants (QSR) as consumers continued to purchase home-meal replacements but with smaller budgets. During the six months expansion of retail property developments was subdued; in this context, 53 (2012: 51) new restaurants were opened across the South African network. Increased expansion activity is forecast for the second half of the year and the Group plans to open a further 115 restaurants within its home market. |
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