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In today's blog we take a look at one of South Africa's biggest food franchise groups, Famous Brands and their declining margins (and share price) over recent years.
Its signs of a tough operating environment with consumers reigning in their expenditure, and more competitors entering the Fast Food and casual dining market in South Africa. |
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Which Brands belong to Famous Brands? Well a couple of famous ones actually.
Below we name a few of Famous Brands most well known brands:
The image below shows FBR's revenue and operting profit history. While revenue has gone up by 33% over the last financial year, their operating profit has gone up to but by a far lower percentage, suggesting profit margins are under pressure.
- Steers
- Wimpy
- Debonairs Pizza
- Fishaways
- Tashas
- Mugg & Bean
- Turn 'n Tender
- Salsa Mexican Grill
- Vovo Telo
- Milky Lane
- Keg
- NetCafe
- The Bread Basket
- Gourmet Burger Kitchen (in the UK. Which is bleeding them money right now)
The image below shows FBR's revenue and operting profit history. While revenue has gone up by 33% over the last financial year, their operating profit has gone up to but by a far lower percentage, suggesting profit margins are under pressure.
The image below shows headline earnings per share and operating margins achieved over the lat couple of years. While the earnings/ profit per share has increased steadily over time, its growth is far less than the growth in turnover, again pointing to possible decline in margins of the business
When looking at the graphic above (the right hand side one), it is clear that the margins achieved by Famous Brands has been declining for a number of years now, and is currently sitting at the lowest level in 6 years. And this is reflected in Famous Brand's share price, as the share price history below shows.
Percent change: