Famous Brands FY numbers - Margins down

30-MAY-17

Famous Brands released their annual results for their financial year to end February 2017. These include Gourmet Burger Kitchen, the UK burger franchise that Famous Brands bought for 1,8 billion Rand during the last financial year. They also bought a potato chip (french fries) plant, Lamberts Bay Foods for 73.5 million Rand. There was also the acquisition of half of Mexican Salsa (nearly 5 million Rand) and half of the Italian restaurant (early stages) Lupa Osteria. Other than Lamberts Bay, I have been to all of these, for some "market research". Of course there was also the purchase of 49.9 percent of "By Word of Mouth", a well known, especially around these parts, catering business.


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Famous Brands 6 month numbers - suspends dividend

25-OCT-16

Famous Brands delivered and served up six month results yesterday. At face value they are decent results, notwithstanding what is always a tough operating environment. The group have successfully transformed themselves into a food production business, along with the old core distribution and franchising front end. Production means that you can control the quality inside of the brands that you have acquired, something that becomes increasingly hard to do across multiple brands and many more stores. The group now has over 2600 stores of your good old favourites, and your new favourites too. The tried and tested Mugg & Bean to Debonairs, alongside the likes of Tashas. I mean, who do you know who doesn't like Tashas?


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Famous Brands trading update - strong earnings growth

11-OCT-16

Famous Brands have released a trading update ahead of their results on the 24th of October. Those should be exciting, we were discussing Kevin Hedderwick the other day, in person he always downplays his role (a good characteristic), those who have dealt with him suggest that he is really good quality. Not just a chap from East London, someone who has certainly changed a mom and pop type business into a professional outfit with multiple irons in the fire. Recognising that there is a food revolution afoot, they also want to control the supply chain from top to bottom. Controlling the quality of all the ingredients will be key to the consumer coming back and back time again. My wife often tells my kids about her dad's saying, it is not how many people come, it is how many people come back. Quite right.


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Famous Brands buys 49.9% of catering group

03-OCT-16

Not an earth shattering announcement this morning, bound to get some Sandton tongues wagging, that is for sure darling. This morning, there was an announcement from Famous Brands that they are acquiring a 49.9 percent stake in a business that you may well know well, if you live up here in Jozi. By Word of Mouth catering. 23 years on, husband and wife team Karen (founder in 1993) and Adrian (joined in 2003) will sell half to Famous Brands. Price? Well, this falls inside of the rules of having to notify the market, less than five percent of the market cap. Current market cap is 16.5 billion Rand, so less than 5 percent of that. Paul knows Karen, she actually runs with him. Eating all that marvellous food means that you HAVE to do lots of exercise, right?


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Famous Brands buys GBK in the UK

02-SEP-16

Before the market opened yesterday, Famous Brands announced that they are expanding their operations in the UK. They are paying 120 million Pounds for Gourmet Burger Kitchen or "GBK", a 75 store premium burger restaurant. These 75 stores will add to the current 83 Famous Brand stores already in the UK. In terms of value for money, GBK had an EBITDA of around 9.6 million pounds for the 12 months ending June 2016, so not cheap but not overly expensive. The question that we were asking in the office, "What exchange rate did they get?". The company locked in an exchange rate of GBP/R 17.54, getting near the strongest levels of the post Brexit Pound crash. On that exchange rate it will cost them around R2.1 billion, Kevin Hedderwick on TV yesterday said Brexit saved them around R800 million, compared to the price they were first looking at paying.


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Famous Brands buys new factory

04-JUL-16

News from Famous Brands this morning, they are buying a tomato paste manufacturer down in the Windy City. That is Port Elizabeth to you and I. The factory was bought in liquidation, Famous Brands also points out that the facility was manufactured for a total cost of around 200 million Rand. There is a shortage of tomato paste in the country, a pretty significant one at that. The country imports between 30 to 35 thousand tons of tomato paste, the company itself is responsible for 1500-2000 tons of that. Michael asked the best question. Sitting here next to me he said, then why did the company go bankrupt? Indeed. Good question, it must have been a pretty nasty experience.


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Famous Brands FY numbers - strong revenue growth

31-MAY-16

Good news, Famous Brands results for the full year hit the screens yesterday morning. The same cycle over and over, the longer you do this, the more you get used to the fact that the company is going to report on the last Monday in May. These of course were for the full year to end 29 February - Famous Brands Reports Impressive 15th Consecutive Year Of Record Results. It is a pretty impressive track record and most especially against the backdrop of a consumer that was supposed to be under tremendous pressure. They are opening two stores a week here in South Africa, three a week across the group, and they refurbished four stores across the group per week of the financial year.


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Famous Brands acquires 51% stake in Mythos

09-NOV-15

We had an announcement from Famous Brands this morning of a new brand added to their stable - Famous Brands Savours Greek Cuisine Acquisition - Advancing the Group's Presence in Evening Casual Dining Category. The casual dinning area is something that Famous Brands have been talking about for the last 18 months, it also allows them to spend some of the the R126 million cash sitting on their balance sheet. I think you can expect more acquisitions like this going forward. Referring to the consumer this is a key line from the announcement ""Mythos's target audience is upper-LSM consumers, a market segment which has consistently proved its resilience in the current weak economic conditions. The research derived from our other premium brands illustrates that customers with robust disposable income remain enthusiastic spenders."


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Interim results, great revenue growth

23-OCT-15

Famous Brands released their interim results to end August 2015 yesterday, the market embraced the higher dividend and better revenues, the stock was up 3 percent by the close of trade. Revenues for the half increased a very healthy 27 percent to just shy of 2 billion Rand. Operating profits and Headline Earnings (241 cents) increased by "only" 14 percent. The dividend as we mentioned increased 23 percent to 190 cents, payable Monday 7 December. Famous Brands boosts your Xmas budget!


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Famous Brands buys into Botswana

23-JUN-15

The second stock was Famous Brands, who will Acquire 51% of Retail Group (Pty) Ltd, Botswana. This is not a huge acquisition but it does give them more control of the operations in Botswana and more importantly it gives their (Famous Brands) huge amount of cash a place to work a bit harder. In their recent results they had R 126 million sitting in cash on the balance sheet.


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Famous Brands full year numbers

25-MAY-15

One of our core holdings and one of my favourite companies (because their products taste so good) Famous Brands released their full year results this morning - Summarised Results For The Year Ended 28 February 2015. They had a solid year with revenue up 16% to R 3.3 billion (not huge in the grand scheme of things), HEPS up 15%, the dividend is up 18% and they added 258 new restaurants bringing the total to 2545.


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Famous Brands, logistics company

09-DEC-14

Another note on that Famous Brands acquisition that was announced yesterday. I was asked a bunch of questions by a delightful journalist from Moneyweb, Sungula Nkabinde. It became clear to him that this business was all about logistics. Group revenue was 2.83 billion Rand. The supply chain segment accounts for 2.15 billion Rand. The rest of the business, the parts that you know better has the front end store presence, the royalties earned from the franchise owners sales. If they, being Famous Brands, can squeeze more out of the production and storage process, that has a huge impact on margins. The money is made in making the products that are then sold onwards to the franchise owners, making it clear that quality will be controlled. No matter where you eat that meat product, you can taste the "sameness" each and every time. That is what people want, the same taste across the country and in this case, across the world.


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Famous Brands beefing up supply chain

08-DEC-14

Last little bit of company news today, Famous Brands shares have rocketed to above 110 Rand a share again (more than that, as high as 115 ZAR), on the news that they are acquiring a stake (75 percent - controlling stake) in a business called Cater Chain Food Services, from a set of brothers John and Roy Tem-Tem. As per the Cater Chain website in the about us section, the company is a red meat production business, again as per their website capable of producing 400 tons of frozen, fresh and processed products each and every week. Wow. That is a lot of meat for the hungry. Latest technology, check it out -> Production plant. The SENS release says slightly different things, it says 900 tons of beef, lamb, mutton, chicken, bacon and ham. This is where you make the money, the storage space for burger patties, you can take a turn again on the same cheaper burger. Provided of course that the same burger is sold at the same price, to the end consumer. Great move, the market approves.


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6 Month Interim

27-OCT-14

Famous Brands have released their interim numbers to August 2014 this morning. Revenue up 14 percent to 1.57 billion Rands (same store sales up 3.4 percent), operating profits up 19 percent to 303 million Rand, which all translates to headline earnings of 212 cents per share (up 18 percent) and the dividend up 19 percent to 155 cents. Very generous with their payments, remembering that this company is completely ungeared, very little debt. In fact they have a debt to equity ratio of a mere 2 percent, 25 million Rand in total, much criticism could be levelled at the team for have a "lazy balance sheet". It is not that the company is not afraid of taking the risks, they are trading under cautionary currently, it could be a sizeable acquisition, all that could change quickly. For that we will have to wait.


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More Mugg & Beans for Total

17-SEP-14

This morning we received an announcement from Famous Brands who have entered into another interesting and innovative deal.


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