Taste and Famous Brands: SA’s unappetising fast-food table
Dire trading updates underscore why almost no one sees a reason to buy into the sector right now
Finding an analyst who sees any compelling reason to buy any of SA’s fast-food stocks these days is as rare as spotting a Naspers naysayer. And that was even before two particularly grim updates last week sparked another furious wave of investors selling out. First, Famous Brands — the granddaddy of casual dining in SA which owns Steers, Wimpy, Debonairs and Mugg & Bean — revealed its new purchase, UK-based Gourmet Burger Kitchen (GBK), had made a R15.5m loss for the half-year. This meant its earnings fell by up to 61%. It was a stunning reversal. Famous Brands has a hard-won reputation of not disappointing investors, which is why its stock has risen 486% over the past decade. But as last week’s news hit, its shares tumbled 10.7%. Then Taste Holdings, the ambitious upstart that is rolling out Starbucks and Domino’s Pizza in SA, revealed its loss for the six months to August had widened by 97%, as it ploughed more cash into its superstar brands. The value of Taste’s stock has nearly ...
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