Famous Brands shares fall 2.96%
By Giulietta Talevi - May 18th 2017, 10:31
The owner of Steers, Debonairs and Tashas warns headline earnings for the year will be between 15% and 25% lower.
Indigestion over Famous Brands’ full-year trading update continued to weigh on its shares, as the stock fell a further 2.96% to R133 on Wednesday.
On Tuesday, the owner of Steers, Debonairs and Tashas warned that headline earnings for the year would be between 15% and 25% lower, taking into account forex and derivative losses on its UK acquisition, The Great Burger Company, as well as R50m in professional fees paid to buy the business.
Famous Brands said that without the one-offs, which it described as "non-operational", and increased interest costs from higher debt, headline earnings would be 10% to 24% higher. But some analysts have quizzed the disclosure, with Anchor Capital’s calculations showing a headline earnings range of between -1% and 8%.
Anchor analyst Henry Biddlecombe said it was "strange" that Famous Brands had chosen to exclude costs on acquisition financing from normalised headline earnings. It seemed the underlying performance from its local operations was "very weak", he said.
Anchor — which shorted Famous Brands ahead of the profit warning — said the update was indicative of tough local trading conditions, calling it "ominous" for its peers in the sector, such as Spur and Taste Holdings. Shares in Spur sank in sympathy, with Famous Brands closing 3.22% down to R30.10.
Last week, Spur executive chairman Allen Ambor sold almost his entire R100m stake in the restaurant company he founded in 1967.
Nonexecutive director Keith Madders also offloaded almost R11m worth of shares.
© BusinessLIVE MMXVII
Walmart unveils new online look
20/04/2018 - 14:31
Walmart.com has just offered a sneak peek at its new online shopping site, which will offer a cleaner and more modern digital experience. The actual site will go live to customers in early May.
Staff in Waitrose stores to advise shoppers to buy healthier foods
20/04/2018 - 09:06
Waitrose has revealed that it is training up some of its shop floor staff to advise shoppers on their diets, steering them away from junk food and towards healthier options.
CNA and Edgars get logo and layout facelifts
20/04/2018 - 08:04
Edcon’s Grant Pattison has been putting together and implementing a turnaround strategy for the group.
Pernod Ricard’s full-year earnings get boost from China’s New Year
19/04/2018 - 15:34
Growth in profit from recurring operations will be about 6%; the Chivas Regal maker’s shares rose as much as 1.8% in early trading in Paris.
River Island to launch five new flagship stores in 2018
19/04/2018 - 14:41
Fashion retailer River Island has unveiled plans to open five new flagship stores in 2018.