Famous Brands H1 HEPS grew 9.5%

Famous Brands, a leading South African company operating across 18 countries, has recently reported a 9.5% growth in headline earnings per share for the first half of the year. CEO Darren Hele sat down with CNBC Africa to provide insights into the company's performance and future growth strategies. He highlighted the challenges faced during the past year, including a tough first quarter due to election period constraints, but noted an improvement in the second quarter as consumer confidence started to rise post-elections. With the formation of the GNU government, Hele saw a positive trend in consumer mobility, leading to increased sales, especially over school holidays and long weekends. While Famous Brands experienced an increase in headline earnings and revenue, Hele acknowledged that margins faced pressure, particularly in the supply chain and some sub-scale businesses. However, he expressed optimism, citing a recovery in leading brand sales and the abating of cost pressures with load shedding reduction. The company's performance varied across regions, with strong performance in South Africa and SADC, but challenges in Africa, the Middle East, and the UK. Hele discussed the need for market adaptation, noting differences in consumer preferences across geographies. Looking ahead, Famous Brands remains bullish on growth opportunities, with a focus on out-of-home consumption and convenience as key drivers for expansion. Hele emphasized the importance of being where the consumer needs them to be and expressed confidence in new store openings despite demographic challenges in some areas. The company's interim dividend of 9% reflects management's confidence in cash generation and positive performance. When discussing the global landscape, Hele mentioned the need for policy stability and local government action to drive economic development in South Africa. He emphasized the importance of addressing challenges at the grassroots level to unlock significant change and prosperity. Regarding youth employment, Famous Brands participates in the youth employment scheme, offering opportunities for entry-level workers to grow within the organization. Hele underscored the sector's responsibility in addressing youth unemployment and expressed pride in the company's contributions to the YES program. In conclusion, Famous Brands' CEO Darren Hele provided a comprehensive overview of the company's performance, challenges, and growth strategies amidst a backdrop of global uncertainty. With a strong focus on market adaptation, consumer needs, and youth empowerment, Famous Brands continues to navigate the evolving business landscape with resilience and optimism.