Listing option to help Nando’s spread wings
WHEN former US president Barack Obama visited South Africa in 2013, he commented that in the US they could see the reach of South African culture, pointing to the fact that there was a Nando’s outlet just a couple of blocks from the White House.
Now, the fast-food franchise group, opened in Rosettenville, Johannesburg, by Fernando Duarte and Robbie Brozin in 1987, could be a step closer to realising its global brand ambitions, if it decides to publicly list.
This week, Bloomberg and the Telegraph reported that Nando’s was in the early stages of planning a share sale.
The group dismissed the reports, denying that it was planning to list on the London Stock Exchange.
When asked for an interview, Nando’s Southern Africa CEO Geoff Whyte said he was in the UK “with a back-to-back schedule”.
The LSE would not comment on whether it had received an application from Nando’s to list.
A listing could still be on the cards as it would help the group raise cash to fund further expansion and provide a means for current investors to cash out some or all of their holdings.
Nando’s now has 1 200 outlets in 21 countries.
De Wet Schutte, an analyst at Avior Capital Markets, said the argument for listing was that it would enable access to capital for aggressive investment. Schutte said that unlike its South African peers Famous Brands and Taste Holdings, Nando’s was focused on a core product.
“It is very much on track to become a global brand which is what Famous Brands does not have. [Nando’s is] more in the space of the Burger Kings and McDonald’s of this world . . . a one-branded type entity.”
The brand has a faithful following among high-profile sportspeople and celebrities, including former Formula One world champion Lewis Hamilton, former British prime minister David Cameron, soccer star David Beckham and musician SOME LIKE IT HOT: A Nando’s restaurant in Soho, London Ed Sheeran.
Schutte said Nando’s had a slightly premium franchise feel to it, which is where many of the millennial trends are heading.
According to CNN, Nando’s has outlets in 21 countries including Australia, India, Malaysia and Qatar. The company started operating in the US in 2008 when it opened a store in Washington, DC.
It now has 38 restaurants in the US.
Investment analyst Chris Gilmour said Nando’s listing would make a lot of sense, and the capital raised would take the franchise to the next level. He added that the company had demonstrated through its growth that there was an appetite for its product.
He said that a listing was an opportunity for investors, such as billionaire Dick Enthoven who originally backed Nando’s, to cash out. Nando’s traded on the JSE until it was delisted in 2003.
Nando’s is more in the space of the Burger Kings and McDonald’s of this world