Famous Brands warns shareholders of severe indigestion from UK deal
Shares in the restaurant franchiser fell after the group said it intended to book an R874m impairment on the R2.1bn Gourmet Burger Kitchen acquisition
Shares in restaurant franchiser Famous Brands fell 6.5% to R95.37 on Monday morning after the group said it intended to book an R874m impairment on the R2.1bn UK acquisition it made in 2016.
Famous Brands said it expected to report on October 29 that it fell into an interim loss of up to R6.23 per share for the six months to end-August from earnings per share of R1.71 in the matching period.
Its interim headline earnings per share (HEPS), which would exclude the R874m pretax impairment of Gourmet Burger Kitchen, would increase by between 3% and 14%, the trading statement said.
Gourmet Burger Kitchen would contribute a £2.6m operating loss to the group’s interim results, three times more than the matching period’s £872,000 loss.
In August, Famous Brands said its South African, rest of Africa and middle east operations grew sales by 7.1%.
“There has been no change to the information provided in the voluntary performance update,” Famous Brands said in Monday’s statement.