Famous Brands delivers double-digit dividend growth despite ‘curtailed consumers'

The Citizen

20-05-2025

Says there were 'some green shoots' for the 2025 financial year.
The company declared a final dividend of 195 cents per share and said its financial performance for the year 'demonstrates resilience'. Picture: Supplied
Leading JSE-listed food services franchisor Famous Brands delivered double-digit dividend and headline earnings per share (Heps) growth for the year ended 28 February 2025 on Monday, despite slower revenue growth of 3.2% to R8.3 billion.
Last year (FY2024) revenue grew 8%, but the group said FY2025 saw 'economic headwinds in South Africa' which 'significantly curtailed consumer spending'. However, it also highlighted 'some green shoots'.
Famous Brands reported a 14.2% jump in dividend per share, 12.6% increase in operating profit (to R914 million), and an 11.9% jump in Heps (to 520 cents) for FY2025, as it upped internal efficiencies and boosted its operating profit margin by 0.9 basis points to 11%.
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The group, which counts 16 big brands like Wimpy, Steers and Turn n Tender as part of its quick service and restaurant chains, said 'curtailed spending' meant 'consumers prioritised essential spending and seek value for money. Competition remains fierce, with increasing advertising activity and a higher frequency and depth of value deals and promotions' during FY2025.
'The landscape favours franchised brands over independent restaurants,' the group noted.
'Other challenges include deteriorating infrastructure, including unreliable electricity and water supply and logistics sector issues. However, there were some green shoots for 2025, including the reduction in load shedding, improved consumer sentiment, rand stability, lower inflation and three interest rate cuts,' it added.
The company's board declared a final dividend of 195 cents per share and said its financial performance for the year 'demonstrates resilience'.
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Together with the final dividend, total dividends for the year came in at 345 cents per share (FY2024: 302 cents). A total dividend of R345.7 million was paid out of current-year profits, it said.
'Our Leading Brands portfolio performed strongly, with solid performances across the brands. However, our Brands' overall performance did not meet our expectations due to lower consumer spending,' the group noted.
'This subdued demand had a negative impact on our manufacturing and logistics results.'
Famous Brands has a restaurant network of 2 979 outlets across 20 countries, over 2600 of which are in its core SA market.
The vertically integrated group includes its restaurants and fast-food chains (Brands unit) in addition to manufacturing, logistics and retail business units. It operates franchised and company-owned restaurants, as well as master-licensed brands such as PAUL.
Famous Brands's shares traded marginally up on Monday, following the release of its latest results.
This article was republished from Moneyweb. Read the original here.