Johannesburg - Famous Brands [JSE:FBR], which bought the UK’s Gourmet Burger Kitchen chain months after Britain voted to leave the European Union, said it sees difficult post-Brexit trading conditions persisting for at least the next year and a half.
“There are no green shoots at all” in the UK, chief executive officer Darren Hele said by phone on Monday. “It’s likely that the next 18 months will be tough.” That’s even as new Gourmet Burger Kitchen outlets have performed well since opening, he said.
Shares of the owner of Steers burgers and Debonairs Pizza dropped 11% in Johannesburg on October 10 after it said it would keep losing money at the UK burger chain until the next financial year.
Gourmet Burger Kitchen is expected to have a better second-half as sales start to climb, Hele said.
Famous Brands sees fewer opportunities to open new stores in Africa, outside of its home market, than in past years as the property sector in several countries in the region has slowed, he said.
The company plans to open 130 restaurants across its brands and the countries in which it operates in the next six months, it said in a statement on Monday. It opened 77 outlets in its first half through August, while posting a 56% drop in net income to R171m.
In South Africa, the company continues to look at possible acquisitions in both franchise and brands and at some manufacturing opportunities. Even so, there is “nothing meaningful” to consider buying at the moment, Hele said.
The stock fell 0.9% on Monday, to trade at R101.39 as of 14:15 local time, bringing its decline this year to 35%. The compares with a 3.5% slide in the broader FTSE/JSE Africa Mid-Cap Index.
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