Famous Brands profit plunges as it struggles to digest Gourmet Burger Kitchen
The company plans to exit some of its second-string brands where turnaround plans have not worked
Famous Brands, owner of Steers, Debonairs Pizza and Wimpy, reported its net profit in its 2018 financial year plunged to less than seventh of the prior year’s as it battled to digest its £120m acquisition of UK chain Gourmet Burger Kitchen (GBK). Shareholders have not received a dividend since 2016, and Famous Brands said in its results for the year to end-February, released on Thursday morning, that it was skipping a dividend again while it whittled down its debt. The acquisition of GBK more than doubled the UK’s revenue contribution to R1.6bn from R704m, helping the group’s overall revenue grow 23% to R7bn. But the combination of GBK with its British Wimpy outlets switched the UK’s contribution into an operating loss of R45m from an operating profit of R55m, dragging the group’s overall operating profit down by 5% to R890m. Finance costs nearly doubled, to R305m, while "nonoperational items" cut net profit by a further R373m. These were R121m in the prior year. These costs contrib...
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