Chamwe Kaira
Famous Brands has reported weaker profits from its Southern African Development Community (SADC) operations as declining consumer spending in key regional markets such as Botswana and Zambia weighed on performance.
Famous Brands operates more than 3 000 restaurants across 30 countries. In Namibia, its franchises include Debonairs Pizza, Steers, Wimpy, Mugg & Bean, Fishaways and Milky Lane.
The group said its SADC operations, which cover 11 countries, came under pressure during the reporting period as economic conditions weakened across the region.
Revenue from the SADC region declined 6% to R423 million from R451 million previously, while operating profit dropped from R51 million to R29 million. The company linked the decline to weaker discretionary spending by consumers.
Across the broader group, performance was mixed.
The leading brands South Africa division remained the company’s main earnings contributor. Revenue increased 6% to R1 billion, while operating profit rose to R542 million. The growth was supported by higher system-wide sales, menu price increases and the opening of 105 new restaurants.
The supply chain South Africa division also recorded strong growth. Revenue increased 7% to R6.2 billion and operating profit rose 14% to R504 million.
The company said the performance was supported by stronger demand, manufacturing efficiencies and the insourcing of Coca-Cola and frozen retail product distribution. However, margins came under pressure from higher beef and coffee prices, which were not fully passed on to franchise partners and consumers.
Other regions remained under strain. The Africa and Middle East segment recorded a 17% decline in revenue to R59 million and reported a wider operating loss of R35 million.
The signature brands South Africa portfolio remained under pressure as weaker dining-out demand affected sales. Revenue remained largely flat, while the operating loss widened to R11 million.
In the United Kingdom, difficult economic conditions also affected performance. Revenue declined 10% to R119 million, with the segment moving from a profit in the previous year to an operating loss of R10 million.
On capital management, Famous Brands repurchased R46 million worth of issued share capital after year-end under board approval.
The company also said dividend tax in South Africa remains at 20%, with net dividends of 176.36 cents per share for taxable shareholders and 220.45 cents per share for exempt shareholders. Famous Brands has 100.2 million issued ordinary shares.
Management said the group will continue focusing on resilience in a constrained operating environment through cost control, operational efficiencies and support for franchise partners.
The company said capital allocation priorities remain focused on dividend payments, share buybacks, debt reduction and reinvestment into growth initiatives.
