Siseko Njobeni

Trade and Industry Correspondent

FAST-FOOD chain franchiser Famous Brands said yesterday it had experienced impressive growth in new franchise outlets opened in townships and downtown urban areas in the past year.

In the six months to August, the company, which houses brands such as Steers, Wimpy, Debonairs Pizza, Fishaways and Whistle Stop restaurants, opened 50 new restaurants across its franchise network.

The group said it was confident that its target of opening 80 new restaurants by the end of its financial year would be achieved, "if not exceeded".

Famous Brands chief operating officer Kevin Hedderwick said yesterday the group had seen "phenomenal" growth in new restaurants opened in and around the fringes of townships and downtown metropolitan areas experiencing urban renewal. Hedderwick said there had been strong growth

"We have a Steers outlet in the new shopping complex in Protea, Soweto, and it is doing very well. There are huge rewards for those who are prepared to take the opportunities in these growing markets," he said.

Hedderwick said that in addition to outlets in the townships the group was impressed with the performance of its investments in city centres which were experiencing government-led revival.

"We have Wimpy, Debonairs and Fishaways outlets at the Carlton Centre (Johannesburg CBD), and they are doing so well. Taking these outlets to these markets gives the customers a variety of chicken, fish and pizza brands to choose from," said Hedderwick.

He said the group had completed the integration of its recent acquisitions, including fruit juice manufacturer Trufruit and ice-cream company Baltimore.

The acquisitions, which were in the group’s food-services division, were part of Famous Brands’ objective of becoming an integrated food and beverage company. Trufruit was part of the group for the entire six months, while Baltimore had been in the fold for five months.

Hedderwick said these companies had performed "beyond management’s expectations".

He said these businesses were expected to contribute about 7,5% of the food services division’s operating profit.

Hedderwick said the company was not looking at any further acquisitions — "at least not in the next 24 months".

In the first half of its financial year, the company increased its revenue by 38%, from R220,8m in the previous corresponding period to R304,9m.

Operating profit increased 34% to R56,2, compared with last year’s R41,9m.

Headline earnings a share improved 49%, from 28,7c a share to 42,7c a share.

The company declared an interim dividend of 13c a share, compared with last year’s 8c a share.

Hedderwick said Steers was poised for further growth in the remainder of the year, with casual dining trends gaining hold in SA.

"With the growth of the emerged middle class and rapid development of double income families, the shift to convenience and home meal replacement is becoming a norm," he said.