Trouble for Wimpy, Mugg & Bean, and Steers owner

Famous Brands expects a substantial drop in earnings for the six months ended 31 August 2023 (H1 2024).

The group is the franchisor for Steers, Debonairs, Wimpy, Mugg & Bean, FishAways, Mythos, Turn n Tender and many more.

In a trading update for H1 2024, the group said it continued to see an improvement in its revenue performance, primarily due to further improvements across its value chain.

“However, the high levels of sustained load shedding, related cost pressures and a challenging economic environment impacted the group’s profitability,” it said.

With this in mind, the group expects headline earnings per share to be between 178 cents and 221 cents per share, representing a change of between -17% and 3% compared to the comparable period in 2022.

In addition, the reported basic earnings per share (BEPS) is expected to be between 174 cents and 225 cents per share, representing a decrease of between -33% and -13% from the comparable period in 2022.

“The reduction in BEPS is predominantly due to the Gourmet Burger Kitchen Limited (GBK) liquidation dividend of R75 million received in August 2022,” the group said.

“Excluding the GBK liquidation dividend, the reported BEPS would have been between 180 cents and 217 cents per share for August 2022.”

The group said it will publish its results on SENS on or near Tuesday, 24 October 2023.

Read: Coffee price war – Starbucks vs Woolworths vs Mugg & Bean vs Seattle and more