Famous Brands, the owner of popular franchises Steers and Wimpy, has announced a remarkable increase in its full-year dividend by more than 80%. The company's earnings also rose by over a third, driven by the lifting of Covid-19 restrictions, which saw South Africans returning to restaurants in large numbers.
While Famous Brands acknowledged the positive trend of improved foot traffic and dwell times in shopping centers, supporting its restaurant locations, it also cautioned that consumers were facing pressures within a competitive environment. The company highlighted the need to vie for a "share of wallet" against competitors.
Load shedding, a persistent challenge in South Africa, impacted all divisions of the company. Famous Brands, which also owns Debonairs and Mugg & Bean, cited elevated inflation both locally and globally, as well as weak economic growth and high unemployment as additional country-specific hurdles.
The company's revenue experienced a significant 15% rise to R7.4 billion, surpassing pre-Covid levels, while operating profit increased by 37% to R861 million. Headline earnings per share and dividends per share also climbed by 37% and 82% respectively.
CEO Darren Hele highlighted the successful revenue recovery and improved cash generation from operations, emphasizing prudent cost control measures amidst inflation, load shedding, and input cost increases.
The removal of Covid-19 restrictions in June 2022 had an immediate positive impact on restaurant and retail sales, boosting volumes for both the manufacturing and logistics divisions, according to Hele.
Despite ongoing macro-economic challenges, Famous Brands expressed optimism, identifying growth opportunities and innovation in trading formats, technology, and product development. The company unveiled plans to open three drive-through restaurants in South Africa, with a continued focus on expanding this format in the upcoming financial year, as it aligns with consumers' increasing demand for convenience and security.
Furthermore, Famous Brands intends to invest in delivery technology to enhance last-mile efficiency, recognizing the critical role of partnerships with third-party platforms.
Famous Brands' robust financial performance reflects its successful recovery from the impact of Covid-19, while also addressing the challenges posed by load shedding and competitive dynamics. With a focus on growth, innovation, and customer convenience, the company remains committed to delivering value to its stakeholders in the ever-evolving restaurant industry. #FamousBrands #DividendIncrease #RestaurantIndustry #PostCovidRecovery #EarningsSurge #FoodService #CasualDining #FinancialPerformance #BusinessGrowth #LoadSheddingChallenges #SouthAfricanEconomy #FranchiseNews #InvestmentOpportunities #DiningExperience #InnovationInFoodIndustry
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