| Fri 24 Feb 2006, 10:00 | | Famous Brands Relishes Exceptional Quarter |
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FBR
FBR
Famous Brands Relishes Exceptional Quarter
Famous Brands Limited
(Incorporated in the Republic of South Africa)
(Registration number 1969/004875/06)
Share code: FBR ISIN code: ZAE000053328
("Famous Brands")
FAMOUS BRANDS RELISHES EXCEPTIONAL QUARTER
- Stellar performance across operating divisions
- System wide retail sales up 21%
- Like-on-like retail sales up 14%
- Food Services division turnover up 42%
- Establishment of Catering Services division to achieve strategic intent
Johannesburg, 24 February 2006: Potency of the group"s brands, optimisation of
capex and acquisitions, and the favourable economic climate combined to ensure
that Famous Brands delivered its best ever performance over the recent holiday
season.
System wide retail sales (including new restaurants) rose 21%, while likeonlike
retail sales grew 14% across the franchise network over the quarter 01 November
2005 to 31 January 2006 compared with the prior year.
Kevin Hedderwick, Chief Operating Officer, says: "Without exception, each of
the group"s brand"s improved like-on-like sales and system wide turnover: Strong
like-on-like sales support management"s view that there is sustainable robust
growth potential in the home meal replacement sector."
He comments: "Sales growth at Debonairs Pizza, Steers and Wimpy is off a high
base and therefore particularly noteworthy. Debonairs Pizza"s likeonlike sales
increased 26% and system wide sales grew 35%. This phenomenal performance can
be attributed to a range of factors: the massive growth of the category
generally as pizza establishes itself as a way of life - a hitherto unknown
phenomenon amongst black consumers; the convenience factor offered by virtue of
home delivery and the "sociable" element associated with pizzas, which promotes
the concept of "sharing".
Organic turnover growth was boosted by the opening of a further 33 restaurants
across the network, bringing the total to 1 163 restaurants. Of the stores
opened, 9 were Steers, 5 Debonairs Pizza"s (including 1 in Nigeria), 11 Wimpy"s,
4 FishAways and 4 House of Coffee restaurants.
Hedderwick comments: "The exponential growth of the emerged middle class and
the evolving trend of out of home consumption continue to present new markets.
The group will, for example, open 4 restaurants in the Jabulani Mall currently
under construction in Soweto. The aspirational nature of our brands continues
to afford leverage in securing good sites in prime shopping centres."
The vigorous performance delivered by the Franchise operation accelerated growth
in the Food Services division. Sales for the quarter improved 42%, with the
highest turnover ever recorded for the group"s butchery and bakery facilities in
December. Trufruit and Baltimore also reported highest ever sales in December.
Year on year sales of fruit juice and ice cream are up 65% and 49% respectively.
Integration of the manufacturing component of the Wimpy business is now well on
track. In-house production of Wimpy"s mustard sauce is underway. Capex
investment in the group"s butchery and bakery has been commissioned and with
effect from February, is now on-stream. Burger patty production is currently in
trial and it is anticipated that the group will be producing 50% of its patty
requirement by April and 100% by May. Production of hamburger rolls and Wimpy
relish is scheduled for 1 April, with the final component, Wimpy tomato sauce,
scheduled for production in September.
The strong out of home consumption boom and the expansion of the food services
sector per se also provides major growth potential for the group outside of the
existing franchise network customer base.
Hedderwick says: "Our strategic intent is to grow our position as the leading
branded QSR / casual dining franchisor in Africa using this platform to
diversify into an integrated food and beverage company. Accordingly, we have
compartmentalised the group"s divisions to best effect that intent: the Food
Services division will continue to focus on supplying our franchise business,
while in parallel, we have established a Catering Services division which will
focus specifically on the vast opportunity presented by independent, external
customers in the food services sector, including amongst others, the hospitality
sector."
"In addition to our manufacturing component, we have extensive warehousing and
distribution infrastructure which provides us with much sought after route to
market. The food services sector has potential to be a major category, and we
are tremendously excited about the opportunities afforded," he says.
Hedderwick concludes: "Continued compound growth at these levels will be
challenging, but we are confident that Famous Brands is now optimally structured
to exploit opportunities across the group, in the franchise, food services,
retail and catering services businesses."
FOR FURTHER INFORMATION
Kevin Hedderwick Paris Papageorgiou Del-Maree English
Chief Operating Officer Group Financial Investor Communications
Director
Famous Brands Famous Brands
Office: 011 651 5812 Office: 011 651 5902 Office: 021 670 2025
Mobile: 083 300 2530 Mobile: 082 453 7042 Mobile: 083 395 8608
Date: 24/02/2006 10:00:09 AM Produced by the JSE SENS Department
