Picture: ISTOCK
Picture: ISTOCK

FAMOUS BRANDS

DiamondNow that SAA is neck-deep in the Dudu, with a financial future that is looking ever more likely to feature a long walk off a short plank, wise travellers are choosing alternative carriers to whisk them up north. It may be a reaction to the somewhat erratic quality of our political leadership or it may be a complete coincidence, but more and more seem to be packing the corporate swag bag and the thermal underwear and hunting for acquisitions in slightly more robust currencies than the beloved ZAR.

The latest to join the party is the hyperactive Famous Brands, fresh from saving the country from a tomato paste crisis, now sticking a couple of billion rand onto the table at the UK’s Gourmet Burger Kitchen (GBK).

This may seem like a reasonably large bill, but it is considerably less than it would have been before the British people decided to take the quixotic decision to blow a loud raspberry at their continental cousins and vote for Brexit, thus tanking the pound and offering considerably more value for your good SA buck.

The higher end of the UK burger market is a crowded space, replete with back stories of mates who decided to throw off the corporate yoke, grow improbable moustaches and dedicate themselves to dishing the perfect pattie out of a van in the back of Hoxton. GBK ticks most of the boxes, and offers the discerning punter a buffalo burger whose main constituent is farmed by none other than the once speedy Jody Scheckter.

It’s a new space for Famous Brands, but it could prove to be a great fit.

Vital numbers on September 5 2016

Share price (R)153.00
Market cap (Rbn)15.28
P:e ratio28.28
Earnings yield (%)3.54
Dividend yield (%)2.65

 

MR PRICE

DogWhen you own a share, you want the experience to be like a good day at a test match, where you enjoy the sun and the occasional refreshing libation, and stir yourself from time to time to applaud the wristiness of a cover drive, but certainly don’t suffer any undue palpitations in the coronary department. The last thing you need is for your investment to jump out at you with a nasty surprise on the downside

The market didn’t hold back in expressing what it felt about Mr Price’s trading update. The company admitted that the winter season had been the most difficult it had experienced in more than a decade.

Kicking off the problems was the unseasonably mild weather, which meant that the mothers of the nation resisted the urge to go out and buy young Kobus a warm vest and a nice woolly jumper just in case he got in a bit of a draught, notwithstanding the fact that the aforementioned Kobus is now weighing in at 120kg and has enough hair on his chest to stuff a sofa.

Then there was the impact of higher unemployment and low economic growth, killing off the consumer’s ability to go out and make a discretionary purchase, especially in the back end of the month when the loot had already been spent.

These are all contributory factors, of course, but there’s also a strong possibility that old Mr P is struggling to compete with its livelier rivals in an increasingly crowded market, and it had better sharpen up its act quick smart if it doesn’t want to go the way of the Diplodocus.

Vital numbers on September 5 2016

Share price (R)162.97
Market cap (Rbn)41.92
P:e ratio15.41
Earnings yield (%)6.49
Dividend yield (%)4.09

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