Famous Brands delivers encouraging interim results

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The integrated food services business saw revenue increase to 1.3 billion rand for the six months ending 31 August 2013 from 1.1 billion rand for the same period in 2012.

“The economic climate experienced in the review period remained constrained and the branded food service trading environment fiercely competitive. In addition, heightened industrial action served to create further instability and dampen sentiment in the country. Notwithstanding these subdued conditions, the fast food industry remained relatively buoyant and the incidence of usage continues to grow,” said Famous Brands’ chief executive Kevin Hedderwick.

“The business model transformation project, implemented at the end of the prior period, has delivered encouraging initial results. Management is satisfied that this restructuring has positioned the group to realise its longer-term growth ambitions.”

Operating profit rose 23 per cent from 206 million rand in the 2012 interim period to 253 million rand in 2013 and profit for the period was up from 146 million rand to 180 million rand.  

“The operating margin rose to 18.4 per cent. Improved profitability was derived from economies of scale achieved across the business and prudent cost containment,” said Hedderwick. 

Profit before taxation increased by 24 per cent from 204 million rand in 2012 to 252 million rand in 2013, diluted headline earnings per share rose 22 per cent from 147 cents to 180 cents and total dividends per share was up 20 per cent to 130 cents in 2013.

“Prevailing trading conditions are likely to persist for the foreseeable future. Consumer disposable income will continue to be constrained, and competition amongst industry participants is likely to accelerate. Margin pressure will remain a feature as fuel and food inflation continues to rise,” Hedderwick said.

“Management is mindful that a continued focus on product innovation, value, quality, service, trading formats and break-through communications will be critical in retaining its market leadership position, and is satisfied that the appropriate teams and structures are in place to do so.”