Famous Brands H1 HEPS rise 140%

Famous Brands, a leading name in the hospitality and restaurant industry, has recently reported a significant 140 per cent surge in headline earnings per share for the first half of the fiscal year. The company recorded a remarkable increase in revenue, climbing to 3 billion rand. Despite the improved earnings, Famous Brands has yet to reach pre-COVID-19 levels. Darren Hele, the CEO of Famous Brands, recently joined CNBC Africa to discuss the key highlights of the results and the actions taken to ensure the business survived the challenges brought about by the pandemic. Hele mentioned that the company drew from the learnings of the past year to navigate through the current wave of lockdowns and restrictions. He emphasized the importance of adaptability and flexibility in the face of unpredictable variables imposed by government regulations. One notable development in the company's performance was the improvement in beta margins, attributed to revenue recovery and the exiting of the GBK business, which had previously weighed down the margins. Despite the challenging trading conditions, Famous Brands has seen a positive trend post-August, with consumers showing adaptability to the changing environment and regulations. The CEO highlighted a shift back to traditional in-store dining, with customers gradually returning to familiar channels like takeout and dine-in services. While the recovery is evident, Hele noted that the company is still missing out on holiday trade and significant foot traffic due to lingering restrictions on mobility. He pointed out that sit-down services typically come at a premium compared to takeout options, influenced by factors like service levels and infrastructure costs. Famous Brands is optimistic about the emerging picture of customer behavior, with a focus on local and suburban markets sustaining the business. However, uncertainties loom over the potential impact of a fourth wave and further restrictions on the industry. Hele expressed concerns over the implications of additional lockdown measures on businesses' ability to survive, particularly in the face of potential alcohol bans and tighter regulations. The company has witnessed a reduction in employee numbers, primarily due to the strategic exit from the GBK business and ongoing challenges in realigning the workforce amidst the evolving landscape. Despite the setbacks, Famous Brands remains resilient and determined to weather the storm, acknowledging the necessity of continuous adaptation and perseverance in the dynamic market environment. As the industry braces for potential challenges ahead, the CEO remains cautiously optimistic about the future outlook, emphasizing the importance of vaccination programs and less stringent restrictions to support the recovery of businesses in the hospitality sector.