Wimpy and Mugg & Bean Owner Famous Brands Reports 12% Earnings Surge and Bigger Dividends

Despite tough economic conditions and sluggish consumer spending, Famous Brands — the group behind household names like Wimpy, Steers, Mugg & Bean, Debonairs, FishAways, and others — has reported a 12% rise in headline earnings for the financial year ended 28 February 2025.

Shareholders have plenty to smile about, as the group announced a 14.2% increase in dividend payouts, up to 195 cents per share.

Famous Brands operates a network of 2,979 restaurants in 20 countries, split between Leading Brands (quick service and casual dining) and Signature Brands (niche, upscale concepts). Its diverse portfolio includes Milky Lane, Europa, Mythos, Turn ‘n Tender, Vovo Telo and more.

While the South African economy has continued to present headwinds — such as load shedding, unreliable infrastructure, and a highly competitive restaurant market — Famous Brands managed to outperform expectations in key areas.

“The landscape favours franchised brands over independent restaurants,” the company said in its earnings report. “Our scale and well-known brands provide an enduring competitive advantage, and consumers continue to seek affordable yet indulgent moments.”

Profit Grows Despite Flat Revenue

Revenue was up only slightly — 3.2% to R8.3 billion — but operating profit grew 12.6% to R914 million, driven by better cost control, improved margins, and lower impairments of intangible assets. The group’s headline earnings rose to R521 million, up from R465 million the previous year.

The company also trimmed its finance costs, reducing net interest expenses from R120 million to R105 million — helping push total profit to R584 million, a R100 million gain year-on-year.

Consumers Remain Value-Focused

The group noted that consumer sentiment is shifting, with more South Africans choosing value-for-money options amid economic uncertainty. This shift favoured Famous Brands’ more accessible offerings like Wimpy and Steers.

Still, subdued demand impacted the company’s supply chain operations, including manufacturing and logistics — areas that rely heavily on volume.

Green Shoots for FY2026

There are encouraging signs for the year ahead. The company pointed to reduced load shedding, a more stable rand, lower inflation, and interest rate cuts totaling 75 basis points as key factors likely to boost spending in the months ahead.

As Famous Brands continues to refine its value proposition and expand its footprint, its established brands are well-positioned to weather ongoing economic uncertainty and tap into future growth.

{Source: BusinessTech}

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