Famous Brands operating profit up 12.6%

Famous Brands, a leading name in the food industry, has recently reported a 3.2 per cent increase in full-year revenue to R8.3 billion despite facing challenges such as a drop in dining out at restaurants and takeaway sales. Headline earnings per share also saw a significant rise, almost four times the pace of revenue, reaching R5.20 in the year to February. Darren Hele, the CEO of Famous Brands, shed light on the difficulties experienced during the reporting period in a recent interview with CNBC Africa. He highlighted the tough trading conditions faced by the company, attributing them to a combination of economic constraints and high food inflation over the last few years. These factors forced ticket prices up and made it more challenging for consumers to access the market, especially for indulgent and discretionary spending like dining out. However, with food inflation easing, there is optimism for improvement in the future. Hele also discussed the competitive dynamics within the market, acknowledging the fierce competition in the food industry. While Famous Brands has not seen a significant loss in market share, consumer spend has been under pressure. He mentioned specific challenges in certain segments, such as the fish and burger space, but noted a positive trend in the ice cream industry. The company has adapted by introducing value offerings to cater to changing consumer preferences and spending habits. Regarding external markets, Hele expressed optimism about the growth potential in the Southern African Development Community (SADC) region. Despite facing pressures related to currency fluctuations and economic conditions in markets like Botswana and Malawi, Famous Brands continues to invest in expanding its presence in the region. The CEO emphasized the profitability of the SADC market and highlighted ongoing efforts to open more restaurants in Botswana. In the Africa and Middle East (AME) market segment, Famous Brands has encountered some challenges, with the division currently operating at a loss. Hele attributed this to the need for greater scale and growth in the region. The company is focusing on driving growth and market share in these areas, particularly in markets like Egypt where new ventures are being explored. While losses are expected in the near future, Famous Brands remains committed to establishing a stronger presence in the AME region. Overall, Famous Brands faces tough competition and economic uncertainties in its core markets, but shows promise in expanding its footprint in external markets. The company's strategic investments and focus on adapting to changing consumer behaviors position it well for future growth and profitability.