MARC HASENFUSS: Hot in the Famous Brands kitchen
Quick flash at the goings on at three companies: Famous Brands, Lewis and Advanced Health
No, thank you. I’ll not be nibbling at food conglomerate Famous Brands just yet, as trading conditions in the next few months may still prove unsavoury. The biggest uncertainty, for me, is how much flavour the profit recipe will lose through paying up to buy Gourmet Burger Kitchen (GBK) from Nando’s Group. One can only hope the company directors’ medium-to long-term confidence in GBK is not misplaced. Ironically, the deal was struck not long after rival Spur Corp retreated from the UK, where traction was elusive.With Famous Brands’ gearing levels tighter and a further deterioration in trading conditions likely, it is no surprise the interim payout was skipped. Would there perhaps be an appetite for a rights issue? Probably not, at least while the share price remains brittle. Is there any chance of Famous Brands selling off more marginal brands and low(er)-margin operations? It seems unlikely at this juncture.