Fast food joint founders grad­u­ally eas­ing out – but share­hold­ers needn’t worry

Finweek English Edition - - COMPANIES & MARKETS - SIKONATHI MANTSHANTSHA sikonathim@fin­week.co.za

JOHN LEE HALA­MAN­DRES is a busy man. So busy is he that he’s graced the sell­ers’ side of the ac­com­pa­ny­ing ta­ble at least fort­nightly since mid-2008. In that time the non-ex­ec­u­tive di­rec­tor of fast food restau­ra­teur Fa­mous Brands has pock­eted at least R11,3m af­ter sell­ing 473 500 shares. This time he’s sold an­other 30 000 shares for R960 000. Of­fer­ing no rea­son for any of the trans­ac­tions, Hala­man­dres was this time joined by an­other Fa­mous Brands non-ex­ec­u­tive, Perik­les Hala­man­daris (they’re all Hala­man­daris broth­ers, the for­mer’s name be­ing mis­spelt by the Home Af­fairs Depart­ment when he first ar­rived in South Africa from Greece) with a R16m sale of 500 000 shares.

To­gether with two other Hala­man­daris broth­ers, the duo not only con­trol the Mugg & Bean and Wimpy chains (among many) but also dom­i­nate its board and are joint con­trol­ling share­hold­ers of the com­pany they founded a few decades ago. Af­ter a se­ries of cor­po­rate ac­tions, Fa­mous Brands has grown into a R1,67bn rev­enue com­pany from less than R500 000 in 2005. Prof­its have soared to R191 600 in fi­nan­cial 2010 from R53 000 in 2005. In­vestors have also been looked af­ter well, with div­i­dends of be­tween 18c and 114c/share/year paid over the same pe­riod.

As it an­nounced last week, be­ing the win­ner of the re­tail Soc­cer World Cup Fa­mous Brands’ share­hold­ers can ex­pect an­other gen­er­ous pay­out in the in­terim pe­riod to Au­gust af­ter a 24% sales growth dur­ing the tour­na­ment. Fa­mous said its June/July sales equalled 83% of its De­cem­ber 2009 turnover, a peak trad­ing month when South Africans nor­mally spend freely.

In­vestors don’t have to read much

into the sell­ing spree by the Hala­man­daris broth­ers. They both re­signed their ex­ec­u­tive po­si­tions a few years ago af­ter en­sur­ing the group was on a sus­tain­able growth tra­jec­tory. John re­signed from the CE’s seat in 2001, a post he’d held since 1997, af­ter spend­ing 28 years with the com­pany. Perik­les was re­spon­si­ble for off­shore ex­pan­sion be­tween 1994 and 1999 be­fore set­ting off to con­cen­trate on his own pri­vate ven­tures. His ef­forts de­liv­ered Wimpy UK, among oth­ers. How­ever, fam­ily needs had to again come first as he was called back to the board in 2001.

For the sec­ond week run­ning, Trea­cle Pri­vate Eq­uity has bought a sub­stan­tial num­ber of shares in in­for­ma­tion se­cu­rity and in­for­ma­tion risk man­age­ment com­pany Se­cureData Hold­ings. Com­pany chair­man Rudolph Pre­to­rius and non-ex­ec­u­tive di­rec­tor Njab­ulo Mthembu are the ben­e­fi­cia­ries of the 1,9m shares Trea­cle bought last week and the 600 000 acquired the pre­vi­ous week. Trea­cle paid 81c and 80c for the re­spec­tive lots. An­other 430 000 shares were bought in Jan­uary at 75c each. Those served to notch up Trea­cle’s Se­cureData stock stake past the 30% mark. That makes Trea­cle the largest share­holder in the com­pany, fol­lowed at a dis­tant sec­ond by an­other pri­vate eq­uity fund op­er­ated by RMB with 17,35% of the stock.

How­ever, the value Trea­cle sees in the share seems still a long way off. The cur­rent price of 90c/share puts Se­cureData on a his­tor­i­cal earn­ings mul­ti­ple of 28,67times its in­terim 0,8c/share profit.


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