Finweek English Edition - - INVESTMENT -

If we look specif­i­cally at the Ze­bro’s trans­ac­tion, the first and most ob­vi­ous point is that other chicken brands have re­ally bat­tled to break the stran­gle­hold that Nando’s and KFC have on the sec­tor. The R17m price tag over 40 out­lets would sug­gest this is a low-mar­gin busi­ness, so the ques­tion will be whether or not Taste can ex­tract op­er­at­ing syn­er­gies. One hopes that it is not sim­ply try­ing to buy earn­ings by mak­ing mul­ti­ple ac­qui­si­tions. The com­pany presently trades on a price-to-earn­ings mul­ti­ple of around 26 times, which looks ex­pen­sive rel­a­tive to the more ma­ture Spur and Fa­mous Brands of­fer­ings. Hav­ing said that, Taste is clearly ramp­ing up growth and does ap­pear to have some abil­ity to sweat its as­sets.

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