Wrap Text
Unaudited Condensed Consolidated Interim Financial Results for the Six Months ended 31 August 2026 and Cash Dividend Declaration
Famous Brands Limited
Incorporated in the Republic of South Africa
Registration number: 1969/004875/06
JSE share code: FBR | A2X share code: FBR | ISIN code: ZAE000053328
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2026 AND CASH DIVIDEND DECLARATION
Famous Brands declares increased dividend supported by free cash flow.
Salient features
Free cash flow
R459 million
up 108%
Dividend per share
170 cents
up 4.9%
Revenue
R4.3 billion
up 2.3%
Operating profit
R375 million
down 4.7%
Headline earnings
per share (HEPS)
228 cents
down 3.2%
Financial performance
Revenue growth was supported by sustained demand for our Leading Brands portfolio and the expansion of our franchise network, which ultimately
benefited Supply Chain. Continued pressure in Signature Brands and weaker performance in some markets outside South Africa, especially Botswana,
constrained overall growth and profitability.
Operating profit declined by 4.7% to R375 million (2025: R393 million), while the Group maintained a disciplined focus on costs, with cost growth
contained below inflation; however, this was insufficient to fully offset the impact of subdued front-end growth. The operating profit margin
declined to 8.6% (2025: 9.3%). Headline earnings per share decreased by 3.2% to 228 cents (2025: 236 cents), while basic earnings per share decreased
to 181 cents (2025: 236 cents). Free cash flow generation has been accelerated, given the optimisation of the balance sheet, scheduled debt repayment
and the completed investment decade.
Six months Six months % change
ended ended (2025
31 August 31 August versus
Salient features Unit 2026 2025 2026)
Statement of profit
or loss
Revenue R'm 4 336 4 240 2.3
Operating profit R'm 375 393 (4.7)
Operating profit margin % 8.6 9.3 -
Basic earnings per share
(BEPS) Cents 181 236 (23.4)
Headline earnings per
share (HEPS) Cents 228 236 (3.2)
Statement of cash flows
Cash generated by
operations R'm 564 472 19.5
Net cash outflow
utilised in investing
activities R'm (36) (142) 75
Net cash outflow from
financing activities R'm (181) (65) (179)
Free cash flow* R'm 459 221 108
Statement of financial
position
Cash and cash
equivalents R'm 351 331 6.2
Net debt** R'm 881 1 104 (20.2)
Net debt/equity Times 0.65 0.84 -
Return on capital
employed (ROCE)*** % 34 34 -
* Cash generated from operations, less income tax paid and net capital expenditure.
** Total interest-bearing borrowings, including lease liabilities, less cash.
*** Operating profit divided by capital employed (which is calculated as the sum of total equity and interest-bearing debt net lease liabilities).
Capital allocation
Gearing
The Group's total borrowings at 31 August 2026 were R1.0 billion (2025: R1.1 billion), and finance costs on borrowing decreased by 18% from the prior
period, supported by capital repayments and beneficial pricing of the debt facility. The Group continues to benefit from its R1.7 billion debt
refinancing arrangement, concluded in December 2025. In response to increased market volatility and potential interest rate hikes, the Group
reconsidered its approach to interest-rate hedging and implemented interest rate swaps to mitigate volatility in finance charges.
Share buyback
In January 2026, Famous Brands announced the implementation of the Group's first share buyback programme. During the period under review, the Group
spent R57 million on the programme.
Capital expenditure
We reduced our capital expenditure by 73% to R38 million (2025: R140 million). We allocated capital in line with the Group's strategy, including
investment in consumer-facing technology in Leading Brands in South Africa and enhancing our Manufacturing and Logistics infrastructure.
Sale of 21% shareholding interest in Retail Group (Pty) Ltd
In line with our capital-light expansion approach outside South Africa, Famous Brands has entered into a transaction to reduce its shareholding
in Retail Group (Pty) Ltd (Retail Group) in Botswana from 51% to 30%. The transaction, expected to be completed by 28 February 2027 and will see
our existing Botswana-based partners acquiring this shareholding, following implementation of the transaction and fulfilment of all conditions
precedent, including the required regulatory approvals. On loss of control, Famous Brands will derecognise the assets, liabilities and any related
non-controlling interest put option liability of Retail Group, and recognise any resulting gain or loss in profit or loss. Retail Group will cease
to be a consolidated subsidiary of Famous Brands and will be equity-accounted as an associate.
We will continue to receive master licence fees from this market under the same arrangement as currently in place.
For the interim reporting period, Retail Group is classified as a disposal group held for sale. A goodwill impairment loss of R41 million has been
recognised in profit for the period, arising from the expected loss of control of the majority shareholding.
Dividend
The Board declared an interim dividend of 170 cents per share (2025: 162 cents), reflecting the Group's continued strong cash generation and sound
financial position. The dividend will be paid from profits for the review period, amounting to a total of R170,3 million. In terms of dividends tax
legislation, the following additional information is disclosed:
Event dates
Declaration date Wednesday, 21 October 2026
Last day to trade "cum dividend" Monday, 14 December 2026
Shares commence trading "ex-dividend" Tuesday, 15 December 2026
Record date Friday, 18 December 2026
Payment of dividend Monday, 21 December 2026
Those shareholders of the Group who are recorded in the Company's register as at the record date will be entitled to the dividend.
In terms of dividends tax legislation, please note the following:
- The local dividend tax rate is 20%.
- The net local dividend amount is 136 cents per share for shareholders liable to pay the dividends tax and 170 cents per share for shareholders
exempt from paying the dividends tax.
- The issued share capital of Famous Brands is 100 202 284 ordinary shares.
- Famous Brands' tax reference number is 9208085846.
Operational review
Important definitions
System-wide sales refer to sales reported by all restaurants across the network, including new restaurants opened during the year. Like-for-like
sales refer to sales reported by all restaurants across the network, excluding restaurants opened or closed during the year.
Brands
Leading Brands - SA
Leading Brands SA revenue increased by 2.5% to R508 million (2026: R496 million) due to 2.7% growth in system-wide sales, while like-for-like
sales grew by 0.8%. Growth was supported by the strong brand portfolio, compelling value propositions, measured menu price increases and
continued franchise network expansion. The operating profit increased to R241 million (2025: R238 million). We opened 36 new restaurants,
including smaller formats and drive-thrus, to meet consumer demand for convenience.
Signature Brands - SA
Signature Brands' revenue decreased by 8.4% to R95 million (2025: R103 million), while the operating loss was R9 million (2025: (R7 million)).
Like-for-like sales decreased by 0.9%, while system-wide sales decreased by 5.1%. Management has taken a range of corrective actions to restore
the Signature Brands portfolio to profitability, including management changes and cost reductions.
Southern African Development Community - SADC
(Angola, Botswana, DRC, Eswatini, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Zambia and Zimbabwe)
The SADC region delivered a mixed performance, with revenue growth in several markets, but continued poor performance in Botswana. Revenue
declined by 18% to R183 million (2025: R224 million). Operating profit declined by 78% to R5 million (2025: R24 million). Botswana's system-wide
restaurant sales fell by 14.8%, and like-for-like sales declined by 13.5% versus the prior period. Botswana's subdued economic environment, driven
by weakness in the diamond sector, continues to pressure consumer demand.
Rest of Africa and the Middle East - AME
(Cote d'Ivoire, Egypt, Ethiopia, Kenya, Kuwait, Malaysia(1), Nigeria and Sudan)
Revenue in AME decreased by 78% to R7 million (2025: R33 million) due to tough trading conditions and a portfolio that remains subscale. The
decline in AME revenue is also due to the conversion from Company-owned stores to a franchise model in Kenya and Mauritius. The operating loss
was R14 million (2025: (R19 million)), including the R3 million loss on disposal of the business. The Group is reshaping its AME portfolio to
improve performance, including rationalising the cost base, addressing country-specific operational challenges and brought under the management
of Leading Brands.
United Kingdom - UK
Weak economic conditions in the UK continue to constrain eating-out demand. Revenue for the UK declined by 19% to R53 million (2025: R65 million).
The operating loss was R3 million (2025: operating profit R1 million). The operating margin was (6.2%) (2025: 2.2%). We have taken measures to
reduce the UK cost base.
(1) Malaysia, as the only country in Southeast Asia, is managed and reported under the AME region.
Supply chain - SA
Revenue increased by 5.5% to R3.1 billion (2025: R3.0 billion), reflecting slower demand across the franchise network. Revenue growth benefited
from higher case volumes related to the insourcing of Coca-Cola and frozen retail product distribution. Operating profit increased by 13% to
R230 million (2025: R203 million), despite lower manufacturing volumes. The operating profit margin was 7.3% (2025: 6.8%).
Looking forward
We remain focused on executing our strategy with discipline as operating constraints persist. Our franchise partners continue to demonstrate
agility and a strong commitment to reinvesting in our brands, supported by a solid pipeline of new restaurant openings and healthy revamp activity.
Maintaining operational efficiency and cost discipline, including careful consideration of our investment decisions and timing, will protect
earnings quality and support sustainable growth. We will continue to balance shareholder distributions, share buybacks, debt repayment and
investment in the growth of the business.
On behalf of the Board
Chris Boulle Darren Hele
Chairman Chief Executive Officer
Midrand
21 October 2026
A live webcast of the Group's interim results presentation will be held on Wednesday, 21 October 2026 at 10h30 (SAST)
To pre-register, link to: https://www.corpcam.com/FamousBrands21102026
Full announcement and forward-looking statements disclaimer
The contents of this short form announcement are the responsibility of the Board and have not been reviewed or reported on by the Group's external
auditors. Shareholders are advised that this short form announcement represents a summary of the information contained in the full announcement,
published on https://senspdf.jse.co.za/documents/2026/jse/isse/fbr/HY26.pdf and on Famous Brands' website at www.famousbrands.co.za on 21 October 2026
and does not contain full or complete details of the financial results. Any investment decisions by investors and/or shareholders should be based on
consideration of the full announcement as a whole and shareholders are encouraged to review the full announcement. The full announcement is also
available for inspection at the registered office of the Company and at the offices of Famous Brands' sponsor, The Standard Bank of South Africa
Limited. Inspection of the full announcement is available to investors and/or shareholders at no charge during normal business hours.
Directors
Chris Boulle (Independent Chairman), Nik Halamandaris, Darren Hele (CEO)*
Alex Maditse, Busisiwe Mathe, Thabo Mosololi, William Mzimba,
Fagmeedah Petersen-Cook, and Nelisiwe Shiluvana (Group Financial Director)*
* Executive
Group Company Secretary
Celeste Appollis
Registered office and contact information
478 James Crescent, Halfway House, Midrand, 1685 |
PO Box 2884, Halfway House, 1685
Telephone: +27 11 315 3000 | Email: investorrelations@famousbrands.co.za |
Website address: www.famousbrands.co.za
Transfer Secretaries
Computershare Investor Services (Pty) Ltd
Registration number: 2004/003647/07
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
Private Bag X9000, Saxonwold, 2132
Sponsor
The Standard Bank of South Africa Limited
Registration number: 1969/017128/06
30 Baker Street, Rosebank, 2196
Auditor
KPMG Inc.
Registration number: 1999/012876/07
85 Empire Rd, Parktown, Johannesburg, 2193
www.famousbrands.co.za
Date: 21/10/2026 07:05:00
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