Famous Brands issues cryptic statement, after warning of Gourmet Burger Kitchen loss
Famous Brands issued a cryptic statement on Friday morning after warning the market on Thursday evening that the loss from its R2bn UK acquisition, Gourmet Burger Kitchen, had more than tripled.
"Famous Brands is giving consideration to strategic options relating to a subsidiary that may have a material impact on the price of the company’s share price," was all Friday morning’s statement said.
On Thursday at 5.40pm, Famous Brands issued a "voluntary performance update" saying Gourmet Burger Kitchen would contribute a loss of £2.24m (about R42m at Friday morning’s exchange rate of R18.71 to the pound) to its interim results for the six months to end-August.
Gourmet Burger Kitchen’s loss in the first half of Famous Brands’ 2017 financial year was £680,000.
Famous Brands did not provide an earnings forecast, but said it expected to report on October 29 that, thanks to its South African and rest of Africa and Middle East (AME) operations, its interim results "will be stronger than those reported in the prior comparable period".
In SA, Famous Brands said, sales grew 6.7%. Excluding new outlets, sales grew 2.8%.
The group segments itself into "leading brands" — Steers, Debonairs Pizza, Wimpy, Mugg & Bean, Fishaways, Milky Lane, Fego Caffé and Wakaberry — and "signature brands" Europa, Giramundo, The Bread Basket, Juicy Lucy, Brewers Guild and McGinty’s.
"Leading brands’ system-wide sales rose 6.6%, with like-for-like sales up 3.6%. Signature brands’ system-wide sales increased 7.5%, while like-for-like sales declined by 2.9%," the trading statement said.
In its AME outlets, sales grew 10.9% measured in rand.