Famous Brands, the owner of Steers, Wimpy, and Mugg & Bean, increased its headline earnings by 9.5% to R218.7 million for the six months ending 31 August 2024.

The group also raised its dividend by 9% to 150 cents per share.

The group said Wednesday (23 October) that it has made significant investments in its property and infrastructure to support its growth and operational efficiency.

The group invested R91 million in capital expenditure during the interim period, focusing on enhancing its manufacturing and logistics infrastructure.

A notable portion of this investment, R12 million, was allocated to the construction of cold storage facilities at the Midrand Campus, with a total of R24 million invested to date.

The group’s total borrowings as of 31 August 2024 stood at R1,148 million, down from R1,265 million in the previous year.

This reduction is part of Famous Brands’ ongoing commitment to debt management, having repaid R127 million of borrowings since August 2023.

The group has also secured a specific debt facility for the development of its new cold storage facilities, which will create some short-term pressure but is expected to enhance long-term operational efficiency.

Financial Highlights:

Despite a slight decrease in revenue from R570 million to R563 million, operating profit improved by 5.6% to R232 million. The group’s operating profit margin also saw an increase to 41.2%.

The performance of the Leading Brands portfolio remained strong, while the Signature Brands portfolio faced challenges due to lower consumer discretionary income.

Signature brands include Vovo Telo, Mythos, Paul, Salsa Mexican Grill and Turn ‘n Tender.

Famous Brands’ manufacturing revenue remained stable at R1.6 billion, with growth from price inflation offset by lower volumes. The company achieved a 10.3% increase in operating profit to R150 million, driven by improved yield and operating efficiencies.

Logistics revenue remained flat at R2.5 billion, with operating profit decreasing to R34 million due to economic pressures and a shift to lower-value product categories.

Looking ahead, Famous Brands remains cautiously optimistic about the economic recovery. The company plans to continue supporting its franchise partners and investing in consumer-facing technologies.

With a solid pipeline of promotional activities and plans to open 89 new stores in the second half of the 2025 financial year, Famous Brands is well-positioned to navigate the fluctuating market environment and drive sustainable growth.

 It currently has 2 552 restaurants in South Africa, nine logistics sites and 11 manufacturing sites

“We continue to invest and leverage technology to enable growth and enhance consumer experiences in meeting their ever-evolving needs,” the group said.

“We are investigating smart restaurant configurations and sustainable solutions to help our franchise partners understand best practice energy efficiency management and cost savings.”