‘No buyer’s remorse’
It wasn’t a dud deal, says Famous Brands
It was Famous Brands’ big buy — a R2.1bn purchase. It seems as if an awful mistake was made, but was it?
For months, Famous Brands has been warning that its purchase of the Gourmet Burger Kitchen (GBK) in the UK for R2.1bn last year was going to eat badly into its profits. But Famous Brands’ results, released this week, show the burger outlet has been even more unhealthy for the group than many suspected. Pre-tax profit for the six months to August fell 48% to R269m — dragged down by the £872,000 loss recorded by GBK thanks to its soaring costs, tougher competition and Brexit, which crunched British consumer spending. Investors weren’t charmed. Famous Brands’ share price has now lost 12.8% over the past month — a drop of nearly R1.5bn in value.Its fare is not cheap by SA standards — a 170g classic GBK burger in London will set you back £6.95 (about R130), but that’s less than one would spend on a Nando’s chicken burger and chips, which goes for £7.95 (R148). Hele believes GBK will turn profitable again next year, even though he expects the air of uncertainty hovering over consumers to ...
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