Gourmet can’t beef up Famous Brands
Analysts ‘quite shocked’ as update adds insult to injury for an already overpriced acquisition
Famous Brands has joined the ranks of local restaurateurs buckling under the weight of global names. The group said on Wednesday that its beefy investment in UK premium burger company Gourmet Burger Kitchen (GBK) would eat into its interim earnings. As a result, the group had taken the decision to scale back on opening new stores. Famous Brands warned on Wednesday that its results for the six months to end-August would be weaker than those reported a year ago. In the trading update for the five months to July, it said GBK would take longer than initially expected to become profitable. "The trading update was quite shocking," said Mergence investment analyst Nolwandle Mthombeni. "It revealed that of the 12% sales growth reported for GBK, like-for-like sales decreased by 2.6%, which means the stores they acquired are materially underperforming. "This just added insult to injury to an already overpriced acquisition and the market is likely taking a view that it wasn’t a great acquisiti...
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