TRADING UPDATE
Famous Brands shares fall 2.96%
The owner of Steers, Debonairs and Tashas warns headline earnings for the year will be between 15% and 25% lower
Indigestion over Famous Brands’ full-year trading update continued to weigh on its shares, as the stock fell a further 2.96% to R133 on Wednesday. On Tuesday, the owner of Steers, Debonairs and Tashas warned that headline earnings for the year would be between 15% and 25% lower, taking into account forex and derivative losses on its UK acquisition, Gourmet Burger Kitchen, as well as R50m in professional fees paid to buy the business. Famous Brands said that without the one-offs, which it described as "nonoperational", and increased interest costs from higher debt, headline earnings would be 10% to 24% higher. But some analysts have quizzed the disclosure, with Anchor Capital’s calculations showing a headline earnings range of between -1% and 8%. Anchor analyst Henry Biddlecombe said it was "strange" that Famous Brands had chosen to exclude costs on acquisition financing from normalised headline earnings. It seemed the underlying performance from its local operations was "very weak",...
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