GOLD BRANDS INVESTMENTS
Share price: 105c JSE code:
SELL GOLD BRANDS INVESTMENTS (GBI), a fledgling fast food franchiser, snuck onto the JSE’s AltX board last month. No new capital was raised at listing, which is either an admission of a lack of interest by institutional investors or complete confidence in the company’s cash-generating abilities.
To date the market has not shown much of a craving for GBI, and punters will probably refrain from sampling until at least the first set of audited financials are published. There are a handful of brands in GBI, but the immediate prospects revolve mainly around Chesanyama outlets. The prime movers of GBI developed and grew The Fish & Chips Company brand (now owned by Taste), which means that the chances of building a sprawling presence for Chesanyama should probably not be discounted. Chesanyama, however, is pitched at the lower end of the consumer market, where it faces huge competition from the many competitors selling meals for under R30. In this segment margins are thinner than the finest carpaccio, and any operational snags can drag profit down. Even experienced quick food experts like Spur have, via Captain DoRegos, battled in this low end segment. It will be telling if GBI’s existing store base can fund the planned Chesanyama expansion as well as acquisitions.
For now, there are simply not enough flavours for the discerning investor’s palate, and the free float’s just a sliver.