Famous brands enters Ghana, exits three African countries

Jun 04 2017 06:02
Justin Brown

Johannesburg - Famous Brands, Africa’s largest branded food service franchiser, had entered Ghana but exited the Democratic Republic of Congo, Ivory Coast and Tanzania, CEO Darren Hele said this week.

“We want to make sure we get into quality markets,” he told investors.

However, Hele said that, in South Africa, the petroleum sector was not investing as much right now and shopping centre developers were less aggressive.

Projects with Shoprite in Africa were going well, especially in Angola, Hele said.

Famous Brands still wanted to grow further after completing seven acquisitions over the past year and taking on almost R2.9 billion in debt, he said.

“Group remains paramount ... We are growth champions,” he added.

However, the build of debt caused the group to this week halt its dividend for the first time in 13 years, as the company looked to conserve cash.

Famous Brands will now be under pressure to prove that the acquisitions it made live up to their promise and the company did not overextend itself.

The largest acquisition was made in September, which saw the group buy UK group Gourmet Burger Kitchen for R2.1 billion.

The other acquisitions were:

. The setting up of a joint venture with Salsa Mexican Grill, Lupa Osteria and Catch;

. Lamberts Bay Foods, a maker of French fries and potato products;

. Coega Concentrate, a tomato paste processing plant based in the Eastern Cape; and

. A 49.9% stake in catering company By Word of Mouth.

Famous Brands wants to grow By Word of Mouth by establishing Cape Town and Durban footprints.

As a result of the acquisition spree, Famous Brands, which owns chains like Debonairs Pizza, Wimpy, Mugg & Bean and Steers, now has 2 782 shops in 22 countries.

The franchiser was likely to break the 3 000 shop level this year, with Debonairs Pizza becoming the group’s largest brand and surpassing Steers, Hele said.

The company had just experienced a three-week strike that ended with a two-year wage agreement, he said.

Famous Brands has introduced bakery-café brand Paul into the local market. It is a renowned family-owned French artisanal boulangerie, patisserie and café.

The first Paul shop was opened in March in Melrose Arch in Johannesburg, creating over 80 jobs. There are three other Paul stores in Africa: in Morocco, Ivory Coast and Reunion Island.

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famous brands  |  retail  |  acquisitions



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