Famous Brands (JSE: FBR): Africa's Leading Vertically Integrated Restaurant Operator With Rising Earnings

Famous Brands Ltd (JSE: FBR) is Africa’s leading quick-service and casual dining restaurant franchisor operating franchised, master license and Company-owned restaurants. They have a vertically integrated business model and supply chain consisting of Manufacturing, Logistics and Retail operations.

The Company recently reported some preliminary earnings: Famous Brands flags earnings rise despite load-shedding worries (The fast-food group says SA’s weak economy and increased power cuts have dimmed growth prospects across its entire value chain). In addition: Famous Brands says earnings could jump almost half after lifting of Covid-19 restrictions

OVERVIEW:

Famous Brands listed in 1994 with one brand and a limited supply chain. Today the enterprise consists of, among others, 2,824 restaurants and about 3,968 employees in three geographic regions. South African and selected African market brands are supported from South Africa by the Company’s Manufacturing, Logistics and Retail operations. To service these markets, they have a fleet of trucks and 10 manufacturing facilities.

Famous Brands boasts an extensive, vertically integrated business model comprising Brands, Manufacturing and Logistics. The portfolio comprises Leading (mainstream) brands, Signature (niche) brands, Retail brands, Other brands, and associate companies.The Leading brands portfolio is segmented into Quick Service and Casual Dining brands:
- Our Leading Quick Service brands are those that prioritise take away and delivery offerings. While these restaurants offer limited sit-down options, there focus is on quick service. The portfolio offers a wide range of menu options including burgers, pizza, chicken, fish and desserts.
- Our Leading Casual Dining restaurants brands are those that offer patrons a full-service, sit-down experience. The menu offering consists of casual breakfasts, light meals and evening dining.
Several of our Signature brands are JV partnerships with the founders of the respective brands.

Vertically integrated business model / supply chain:Supply Chain

Cover Story: Man Who Built Famous Brands (CNBCAfrica) Youtube 17:31 Min

Famous Brands flags earnings rise despite load-shedding worries (Business Day) May 2023
- The group said in Thursday’s trading statement for the year to end-February 2023 that it expects headline earnings per share (Heps) to increase between 27% and 47% compared to the prior financial year. Heps is a measure of profit that excludes one-off items.
- Basic earnings per share are expected to increase 55%-75% when compared to the prior comparable year thanks mainly to a R75m liquidation dividend from Gourmet Burger Kitchen (GBK), the UK subsidiary it placed into administration in late 2020 due to the impact of the Covid-19 pandemic.
- Famous Brands said the improvement in group earnings was mainly due to an increase in sales of its leading brands as well as good logistics revenue.
Famous Brands says earnings could jump almost half after lifting of Covid-19 restrictions (News24)
NOTE: Famous Brands is scheduled to publish its results for the year to end-February on or about May 22 (Trading Statement for the year ended 28 February 2023).
P/E (Google Finance): 14.00 / P/E (Yahoo! Finance): 13.93 (no forward P/E)
Dividend Yield (Google Finance): 4.91% / Forward Dividend & Yield (Yahoo! Finance): 1.93%

1 YEAR CHART:

LONG TERM CHART:

ADDITIONAL RESOURCES:

Website
Investor Relations
Our Investment Case
Cover Story: Man Who Built Famous Brands (CNBCAfrica) Youtube 17:31 Min
Trading Statement for the year ended 28 February 2023
Famous Brands flags earnings rise despite load-shedding worries (Business Day) May 2023
Famous Brands says earnings could jump almost half after lifting of Covid-19 restrictions (News24)

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Famous Brands (JSE: FBR): Africa’s Leading Vertically Integrated Restaurant Operator With Rising Earnings

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