Famous Brands 'should ditch GBK'
Analyst says SA owner should rid itself of UK brand's drag on profits
Famous Brands, Africa's leading quick-service and dining franchisor, should accept defeat and let go of its UK business, Gourmet Burger Kitchen (GBK), says an analyst - if it can find a buyer, that is. The company, which owns the Steers, Debonairs Pizza and Wimpy fast-food brands, is reeling from the overambitious acquisition. Famous Brands bought GBK in 2016 for £120m (R2.2bn), which is now regarded as far too steep a price. The group's share price has fallen 34.7% since it bought GBK. This week the company warned shareholders in a trading update that for the year ended February 28 2019, headline earnings would decline between 16% and 33%. The group expects operating profit in SA to remain the same, while losses in its UK burger business would grow to £4.6m, compared with £3.7m from the prior reporting year. GBK's woes in the UK market are exacerbated by widespread economic and political uncertainty stemming from Brexit as well as subdued consumer confidence and muted discretionary...
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