Famous Brands surges after it flags return to profit

The share price of Famous Brands, owner of Steers, Wimpy and Mugg & Bean, surged more than 10% at one stage on Wednesday after it said lockdown restrictions and last July’s unrest did not derail its return to full-year profit.

Headline earnings per share (Heps) from continuing operations are expected to rise 504%-639% to as much as 392c for the year to endFebruary, the group said in an update.

But this profit measure, which excludes some one-off items, is still below pre-pandemic levels.

JSE listing rules require companies to alert the market when they become aware that their earnings will be at least 20% higher or lower than the previous period’s.

The group’s share price leapt as much as 10.13% in response.

By the JSE’s close, the share price had gained just 1.71% to R59, giving the group a market value of just more than R5.9bn.

Earnings per share from continuing operations are expected to rise 325%-375%, recovering from a R1.1bn hit in the previous year after another writedown for Gourmet Burger Kitchen in the UK, an unprofitable hamburger chain that went into a form of business rescue and was later sold.

The company owns 19 restaurant brands and has 2,773 restaurants in SA, Africa, the Middle East and the UK.

It has a food-making division and sells branded goods such as Steers barbecue sauce in groceries.

In a previous voluntary trading update, Famous Brands said the year that ended in February 2022 had been challenging as it still faced various levels of Covid-19-related restaurant trading restrictions.

The difficult conditions were worsened by widespread civil unrest in July last year and some franchises were badly affected, it said.

During the period, Famous

Brands lost franchise revenue from stores closed as a result of the riots and looting when 109 of its stores were vandalised.

Famous Brands previously reported that, for its 2022 year, its leading brands division increased sales about 35.8%.

These brands include Mugg & Bean, Debonairs, Wimpy, Steers and Fishaways.

Sales at signature brands including restaurants such as Mythos, Vovo Telo, Turn n’ Tender, Fego Cafe and House of Coffees rose 55.1%.

Sales of those in the rest of Africa and the Middle East rose 19.8%.

The group will announce its results on May 31.