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South Africa's Famous Brands' H1 profit falls, Brexit weighs
October 30, 2017 / 6:51 AM / in 24 days

South Africa's Famous Brands' H1 profit falls, Brexit weighs

JOHANNESBURG, Oct 30 (Reuters) - South African fast food chain owner Famous Brands reported a 59 percent drop in half-year earnings on Monday after its British business weighed on profits in the wake of the United Kingdom’s decision to exit the European Union.

The company’s British restaurant chain Gourmet Burger Kitchen underperformed in the six months to the end of August. The owner of Debonairs Pizza and the Mugg & Bean restaurant in South Africa is also facing weak growth at home.

Headline earnings per share (EPS) fell to 170 cents compared with 411 cents a year ago.

Chief executive Darren Hele told Reuters the company had initially not been negatively affected by Brexit, but felt the effects on consumer sentiment this year.

“We saw a quick drop in revenue and then in profit,” he said.

Famous Brands in August said that its plans to open new stores in Britain would be slower and more conservative.

In its South African restaurant division sales grew 8 percent to 415 million rand ($29.40 million), but its profit margin declined to around 48.8 percent from 53.6 percent as economic growth slowed and consumer sentiment suffered. ($1 = 14.1148 rand) (Reporting by TJ Strydom; Editing by Ed Stoddard)

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