Financial Mail - Investors Monthly - - Opening Bell - Marc Hasen­fuss

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.

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