Commentary

OPERATING ENVIRONMENT

  • SOUTH AFRICA AND THE REST OF AFRICA AND MIDDLE EAST (AME) REGION
    While the influx of new international operators has slowed, the competitive landscape remained intense, with industry participants under pressure to innovate on menu offerings and price ladders to retain market share and generate viable margins in the currentprice-sensitive environment.
    Country-specific risks in SA also continued to shape the operating context, with consumers facing sustained financial hardship and socio-political uncertainty. Businesses across the economy were adversely affected by service delivery protests, industrial action and civil unrest, while the provision of basic services deteriorated further, exacerbated by local administration inefficiencies and disruptions caused by water shortages and cable theft.
    Despite this context, segments of the South African consumer base showed early indications of optimism and improved confidence in the wake of recent positive developments in government leadership.
  • UNITED KINGDOM (UK)
    The trading environment was characterised by intensified competition, declining footfall in malls, and rising input costs of labour and property rates. The slow pace of progress on Brexit negotiations also continued to subdue consumer sentiment.
  • GENERAL
    Across all our markets, delivery and online ordering remained key drivers of growth in the industry. Notably, Fast Casual and Quick Service offerings continued to outperform Casual Dining establishments, largely due to their perceived appeal as convenient and less expensive, in a constrained disposable income environment. In SA and the AME, the Quick Service segment of the industry continued to benefit from upward social mobility of the population, the relatively young demographic profile of consumers and growing urbanisation.

GROUP PERFORMANCE

In line with the information provided in the voluntary performance update issued on 16 August 2018, the Group's SA and AME operations (with the exception of Coega Concentrate) delivered good growth and a solid improvement in operating profit for the six months ended 31 August 2018. As forecast, the GBK operation continued to underperform the Board and management's expectations, recording a larger operating loss than the prior comparable period.

Remedial measures regarding the two underperforming entities, Coega Concentrate and GBK, are discussed in the "Subsequent events" commentary in this document.

At the start of the review period, management reiterated our strategic focus on the key pillars and core competencies of this business, being our Brands, Logistics and Manufacturing operations. We noted that our priorities are: to promote sustainable growth through increasing capability and capacity across the divisions; judicious capital allocation; and to sweat our investments and ensure the projects we expend the most resources on deliver a proportional return on investment.

As reflected by the Group's results for the period, good progress was achieved in delivering against the following strategies:

SOUTH AFRICA

Brands

  • We prioritised our Leading mainstream brands, upweighting resource support.
  • Expanded the home delivery offering across all our brands.
  • Grew capability in the digital and social media arenas; and
  • Entrenched our presence in key AME markets.
  • We are currently rolling out ground-breaking campaigns to entrench market leadership of our Leading brands.
  • Our plans to expand tashas footprint in the UAE are on track.
  • The pipeline of new and relevant branded offers is well advanced.

Logistics

  • We commenced implementation of a 10-year programme, Project Decade, aimed at steadily building capacity and catering for planned longer term growth.

Manufacturing

  • We launched our plant-wide efficiencies programme, Manufacturing Way, with rewarding initial results.
  • We have established new partnerships in our general foodservice supply and fruit juice businesses, namely FoodConnect and TruBev (formerly TruFruit), and expect them to deliver good results.
  • The Lamberts Bay Foods business, acquired in 2016, has delivered satisfying results.

AME

  • We continued to grow the footprint and contribution of our Leading brands in the region.
  • We commenced trialling an improved delivery offering, with pleasing initial results.
  • Solid progress was made in strengthening our marketing capability and aligning social media platforms with the SA operation.
  • We continued to leverage remedial improvements in the Mr Bigg's business in Nigeria.

UK

Notwithstanding the effect of the difficult macroeconomic climate on the GBK business, management identified the following areas at the end of the prior financial year as requiring urgent attention: operational benchmarks which no longer met gold standards; the need for improved customer engagement across the offering; sub-optimal management capacity; and lack of traction in key growth areas, including the delivery component. In this regard, a range of key strategic imperatives and corrective measures were outlined, and good progress has been achieved regarding the following:

  • The core leadership team has been strengthened and management oversight improved.
  • We have re-established and leveraged GBK's brand assets.
  • A targeted refurbishment and high-street brand facelift programme has commenced.
  • We have simplified menu design and entry and exit pricing.
  • The supply chain has been simplified and streamlined.
  • The targeted closure programme for distressed sites has progressed, with the closure of six stores.

The narrative under "Subsequent events" elaborates on the restructuring programme to be implemented in the business.

GROUP FINANCIAL RESULTS

            Six months
ended
31 August
2018
   Six months
ended 
31 August
2017
%
change
Statement of profit or loss and other comprehensive income                      
Revenue  Rm        3 583.6    3 401.2 5.4
Operating profit before non-operational items  Rm        421.8    406.1 3.9
Operating profit margin        11.8    11.9   
Impairment  Rm        (873.9)      
EBITDA before impairment losses  Rm        526.4    502.0 4.8
Basic (loss)/earnings per share  Cents        (572)    171 (434.5)
Headline earnings per share (HEPS) Cents        188    170 10.6
Statement of cash flows                      
Cash generated from operations  Rm        540.4    463.0 16.6
Net cash outflow utilised in investing activities  Rm        (47.6)    (133.3)   
Net cash outflow from financing activities  Rm        (102.1)    (0.4)   
Cash realisation rate*        102.7    92.2   
Statement of financial position                      
Cash and cash equivalents  Rm        924.7    477.8   
Net debt^  Rm        1 840.4    2 422.8   
Net debt/equity        133.9    145.3   
Total equity  Rm        1 375    1 667   
* Cash generated by operations as a percentage of EBITDA.
^ Total interest-bearing borrowings less cash.

The Group continues to comply with its financial covenants and comfortably meet its debt repayment obligations, in line with agreed financing commitments. The level of gearing has been reduced relative to the prior comparable period. In light of robust cash reserves, management is in discussions with financiers to further decrease gearing, aimed at reducing the Group's gross debt:EBITDA ratio to two times.

As noted at the end of the prior year, the reallocation of corporate costs and administration fees to the pertinent business units in the Group has been prioritised and finetuned. These segmental reallocations have an impact on the margins of the individual business units, but not on the Group's overall margin. The effect of this restructuring is evident in the additional disclosures provided in the Segment report under "Corporate".

OPERATIONAL REVIEWS

BRANDS

The Group's Brands portfolio comprises 25 restaurant brands, represented by a network of 2 874 (2017: 2 797) restaurants across South Africa, the rest of Africa, the Middle East and the United Kingdom.

The portfolio is segmented into Leading (mainstream) brands and Signature (niche) brands, strategically positioned to appeal to a wide range of consumers across the income and demographic spectrum and across meal preferences and value propositions. The Leading brands are further categorised as Quick Service, Fast Casual and Casual Dining. Our brand network consists of both franchised and company-owned restaurants.

This division reported revenue of R432.2 million (2017: R415.0 million), an improvement of 4.1%, with Leading brands contributing
R366.5 million, up 4.6%, and Signature brands R65.7 million, an increase of 1.6%.

Operating profit grew by 9.9% to R222.5 million (2017: R202.5 million), of which Leading brands contributed R218.6 million and Signature brands the balance.

The division's operating margin rose to 51.5% (2017: 48.8%).

Across our Leading and Signature brands, system-wide sales (including all restaurants opened during the period) increased by 7.3% (2017: 7.1%), while like-for-like sales (excluding restaurants opened or closed in the period) grew by 3.4% (2017: 1.4%). Independently, Leading brands' system-wide sales rose 7.1%, with like-for-like sales 4.1% higher. Signature brands' system-wide sales increased 8.6%, while like-for-like sales declined by 2.3%.

The discrepancy between Leading brands' revenue and system-wide growth is attributable to the reallocation of design fees for five months of the review period relative to one month in the comparable prior period. As illustrated in the Segment report, these costs are now reflected under "Corporate" following the establishment of a joint-venture partnership, Design HQ. The discrepancy is in the order of R10 million.

The Brands division's results are particularly creditable given the significant challenges faced throughout the period, as restaurants and distribution routes throughout SA were frequently temporarily disrupted due to widespread civil unrest.

During the period, the Group opened 79 restaurants (2017: 77), comprising 59 Leading brands restaurants, 16 Signature brands restaurants and four Mr Bigg's stores in Nigeria.

Ensuring that the brand footprint is optimally aligned with our target markets is key to the health and viability of the entire business. This is particularly germane in our emerging economy, which features fluid market demographics. In the absence of any alternative, closing non-performing restaurants and rationalising brands which have no potential for growth under our stewardship, despite our best remedial efforts, is a long-standing Group policy. In light of the prevailing weak economy, this will continue.

  • LEADING BRANDS PORTFOLIO
    Consumer disposable income remained under pressure in this category, evidenced by a decline in customer transaction spend and stagnant frequency of visits during the period.
    Notwithstanding this environment, amongst our major Leading brands, Debonairs Pizza continued to gain share in existing and new markets, while Wimpy, Steers, Mugg & Bean and Fishaways retained market share. Solid system-wide and positive like-for-like growth was reported by all of these brands, albeit partly supported by below-inflation menu price increases.
    Fego Caffé and Milky Lane both recorded like-for-like turnover growth, although Fego's system-wide turnover declined marginally due to the closure of five stores.
    Strong promotions focusing on our brands' great value proposition and high-quality meals drove top-line growth across the portfolio. Particularly pleasing results were achieved from our investment in upweighting our online, digital and social media capability, and expanding our delivery offering across our brands.
  • SIGNATURE BRANDS PORTFOLIO
    Spend in the premium segment of the Casual Dining consumer market remained constrained, and in this weak demand environment the portfolio's growth was largely underpinned by new restaurant openings, with Salsa Mexican Grill, Lupa Osteria and Turn 'n Tender each opening three new restaurants. These offerings are clearly differentiated, have strong consumer appeal and offer upside growth potential.
    Our tashas restaurants in the UAE continued to deliver robust results, and a further three new restaurants are scheduled to open in the balance of the financial year.
    In 2014, Total and Famous Brands announced the launch of a pilot project in which Famous Brands would introduce the premium retail offering, Thrupps, to a selection of Total's upper-end service station forecourts. While the five stores opened to date have been well received by customers, Total has elected to terminate the offering in line with its revised long-term global strategy. In this regard, Famous Brands will withdraw the stores with effect from November 2018, and conclude the relationship with Thrupps. The Group's strong, long-standing strategic partnership with Total remains in place.
    The reallocation of a higher proportion of central costs not previously allocated to this business unit has fundamentally changed the margin model. While the new margin reported for the period has disappointed management, the division is under intensified scrutiny, with the clear goal of driving higher margins and adding value to the Group.
  • AME
    The Group is represented in 15 countries in this region.
    We stated in the year-end results announcement published in May that we are optimistic our AME operations will derive good returns from investments made over recent years. It is therefore pleasing to report that revenue and profit grew in both local currency and Rand terms. Revenue for the combined region increased by 9.9% to R135.2 million (2017: R123.0 million). Operating profit rose 27.2% to R24.3 million (2017: R19.1 million), while the operating margin improved to 18.0% (2017: 15.5%).
    System-wide sales increased by 12.8% (2017: 1.0%). The region contributed 10.8% (2017: 9.2%) to the Group's total system-wide Brands' division sales.
    Our 'deep and narrow' approach remains our core strategy in the region, with in-country resources having been increased in Zambia, Mauritius, Malawi and Kenya. Our continued focus during the review period was on growing the contribution of our four Leading brands in the region (Debonairs Pizza, Steers, Wimpy and Mugg & Bean), which accounted for 91% of revenue.
    The Group's joint venture with Retail Group in Botswana reported substantially stronger results compared with the same period in the prior year. The business comprises 36 restaurants, 24 of which are company-owned. In the context of the unfavourable Pula:Rand conversion rate, the good results are attributable to the improved local economy, relatively stable inflation, and management and operational enhancements in the business.
    A total of 16 restaurants (2017: six) were opened and four were revamped (2017: four). While restaurant openings exceeded budget, the revamp programme was behind target, primarily due to franchisees' constrained access to capital and cash flow challenges.
  • UNITED KINGDOM
    Overview
    Our UK operation comprises Wimpy UK and GBK. The businesses are managed and report independently of each other.
    During the review period, the average GBP:ZAR exchange rate was GBP1:ZAR17.29 versus GBP1:ZAR16.78 in the prior comparable period.
    Macroeconomic trading conditions remained unchanged in the six months under review, featuring intense competition in a price- sensitive environment, and subdued consumer sentiment and spend, exacerbated by socio-political uncertainty in the Brexit context. Dine-in sales continued to lose market share as foot traffic in malls declined and online and delivery sales gained traction.
    • Wimpy UK
      The business reported a 13.6% increase in Sterling revenue for the review period, while revenue in Rand terms improved 18.2% to R57.4 million (2017: R48.6 million), primarily as a function of foreign currency translation. Operating profit rose by 2.1% to R8.5 million (2017: R8.4 million), while the operating margin declined to 14.9% (2017: 17.2%)
      Wimpy's collaboration with GBK to leverage commodity purchase volumes continued to deliver lower prices for core products, enabling the business to contain price increases.
      At 31 August 2018, the network comprised 75 restaurants, with none opened or closed during the review period.
    • GBK (UK and Ireland)
      As outlined in the "Group performance" narrative in this document, good progress was achieved in terms of leveraging remedial measures in the operation. Additional operational opportunities exist and are being explored, including launching a multi-vendor delivery platform to increase the current offering from one to three vendors, which should enhance GBK's competitiveness in an area in which it has lagged recently.
      GBK's results reported in this announcement are for the 26 weeks from 26 February 2018 to 26 August 2018.
      An operating loss of GBP2.6 million (2017: GBP872 000) was reported for the six months, while the operating margin declined to (6.6%) from (2.1%) in the prior comparable period.
      System-wide UK sales (Sterling) decreased by 6.8% (2017: increase of 11.1%), while like-for-like sales declined by 9.7% (2017: decrease of 3.2%).
      The network comprises 100 restaurants, with 95 restaurants in the UK and Ireland and the balance in Greece and the UAE. No new restaurants were opened in the period and six were closed, five in the UK and one in Saudi Arabia.
      In light of the continued adverse trading conditions and sustained underperformance of GBK, an impairment of R873.9 million (pre-tax) has been recognised at Group level. The post-tax amount is R760.2 million. The Board is of the opinion that this impairment value is prudent in the current situation.
      Notwithstanding GBK's disappointing financial performance and the announcement of the Company Voluntary Arrangement (CVA) process discussed under "Subsequent events", the Board is satisfied that the positive impact of remedial interventions under way in the operation and the inherent strength of the GBK brand will, in time, add value to the Group. The brand remains the leader in the premium burger category in the UK in terms of consumer sentiment, and management's focus is on re-establishing the gold standard across the entire value chain and customer journey to leverage that position.

SUPPLY CHAIN

The Group’s integrated strategic Supply Chain division comprises its Logistics and Manufacturing operations, which are managed and measured independently.

Stronger sales recorded by the Leading brands underpinned volume growth in the Supply Chain, while the sustained drive to improve efficiencies and control costs also continued to enhance performance across these businesses. Combined revenue for the period increased by 7.3% to R2.25 billion (2017: R2.10 billion). Operating profit grew 15.8% to R256.0 million (2017: R221.1 million) and the operating margin improved to 11.4% from 10.5% in the prior comparable period.

  • LOGISTICS
    Revenue increased by 6.8% to R1.96 billion (2017: R1.83 billion). Operating profit grew 44.2% to R53.0 million (2017: R36.8 million), while the operating margin rose to 2.7% (2017: 2.0%), reflecting improved operating efficiencies and enhanced cost containment, and the non-recurrence of industrial action costs reported in the prior comparable period. The reallocation of a higher proportion of central costs to this business unit has fundamentally changed the margin model, and in the short-term, a more realistic target margin is 3%.
    Following an extensive organisational review, the business commenced implementation of Project Decade, an intervention aimed at optimising current efficiencies in the operation and accommodating planned growth over the next decade. The initial focus of the project is on expanding capacity in the Group's Centres of Excellence in the Western Cape, Free State and Crown Mines operations.
    The division incurred capital expenditure of R2.7 million (2017: R10.0 million).
  • MANUFACTURING
    Revenue increased by 6.4% to R1.47 billion (2017: R1.38 billion). Operating profit grew 10.1% to R203.0 million (2017: R184.3 million), while the operating margin improved to 13.8% (2017: 13.4%).
    Turnover growth was reported by most of the Group's Manufacturing businesses, including the bakery, meat processing, sauce and spice, and cheese plants. Further opportunities exist to enhance capacity utilisation in the cheese plant to take on previously outsourced grated cheese volumes.
    Lamberts Bay Foods delivered a notable set of results, including strong growth in revenue and profit, and an improved operating margin. This enhanced performance is attributable to increased management oversight and enhanced operational efficiencies. Following the loss of a major customer in the latter half of the review period, the operation has been right-sized to mitigate lower volume take-up.
    Revenue declined in the ice-cream plant, while improved profitability was reported by the coffee plant, despite lower sales volumes.
    During the period, the division commenced implementation of the Manufacturing Way, a standardised system and approach to managing all facilities, focusing on teamwork, work flow, problem solving and attainment of key performance indicators. Initial results are positive and management is optimistic that the programme will have ongoing benefits for this business unit.
    In the six months under review, the business incurred capital expenditure of R16.4 million (2017: R30.4 million).
    The Coega Concentrate tomato paste plant made an operating loss of R17.8 million for the period, due to underutilisation of capacity, resulting in severe inefficiencies. In light of the failure to secure an adequate, consistent supply of high volumes of tomatoes, and in anticipation of ongoing losses, management elected to cease operations until further notice. Further information in this regard is contained in the commentary under "Subsequent events".

ASSOCIATES

The Group holds strategic stakes in the following entities: UAC Restaurants Ltd (49%), By Word of Mouth (49.9%) Sauce Advertising (35%) and FoodConnect (49%).

  • UAC Restaurants Limited, Nigeria
    Management noted in the year-end results announcement that it was optimistic the repair programme and remedial measures implemented across this business would start delivering good results in the period ahead. While Mr Bigg's like-for-like revenue declined in the weak economic conditions, it is pleasing to report that the operation recorded solid profits compared to the loss reported in the prior comparable period. This improved performance is attributable to robust cost containment and margin control, improvement in process efficiencies and expansion of the Manufacturing and Logistics offering in the local market. High set-up costs and lack of access to capital for prospective franchisees remain the major impediments to growing and upgrading the network.
  • By Word of Mouth
    During the review period, the business launched two company-owned "Frozen for You" retail stores in Gauteng to complement the online/delivery offering. This premium product has been favourably received by consumers in both formats of the offering. The goal is to open additional outlets over the course of the year, pending availability of suitable sites and conducive market conditions.
    By Word of Mouth's corporate catering business, which targets the upper-income market, continued to experience difficult trading conditions as price-sensitive consumers further reduced spend on lavish events. The business reported a loss for the period.
  • Sauce Advertising
    The Group's strategic stake in this below-the-line advertising agency is centred on enhancing marketing capabilities and leveraging marketing spend. Albeit not material, the business continued to make a positive contribution to profits.
  • FoodConnect
    With effect from 1 June 2018, a partnership was concluded with FoodConnect, a distribution business which acquired the rights to the Group's Baltimore ice-cream brand and distributes and sells the product on to third parties. Additional products will be added to the basket in time. The partnership qualifies as a level 2 BBBEE enterprise in terms of preferential procurement, enterprise and supplier development criteria. Although in its infancy, FoodConnect traded profitably for the three months since the partnership was established.

RESPONSIVENESS TO CONSUMER ACTIVISM

Increasingly consumers are driving awareness of environmental issues and demanding that their preferred brands follow suit. We are sensitive and responsive to this and are mindful of operational practices which may have a negative impact on our stakeholders and the environment in general.

In this regard, we support the global campaign against plastic pollution, and are currently withdrawing plastic straws from our restaurants in SA and the UK and replacing them with biodegradable paper straws. The programme will be completed by December 2018.

With regard to the campaign against cage-laid eggs, while the Group is fully compliant with industry regulations, we support the goal to procure 100% cage-free eggs throughout our operations by 2025. We are currently in discussions with industry authorities, suppliers and other stakeholders to ascertain the process of transitioning to a more humane, cage-free procurement policy. Our feasibility study includes determining and obtaining the assurances required regarding meeting the Group's volume demands, securing consistent supply of safe, quality product and remaining compliant with future prescribed legislation. While we recognise that this transition will be a phased process, we are fully committed to this worthy cause.

DIRECTORATE

Appointment of independent non-executive director

With effect from 1 August 2018, Mr Deon Jeftha Fredericks was appointed as an independent non-executive director to the Board, as well as a member of the Audit and Risk Committee. The Board welcomes Deon and looks forward to his contribution.

Withdrawal of resignation of Group Financial Director

On 17 July 2018, shareholders were advised of the resignation of the Group Financial Director, Ms Kelebogile (Lebo) Ntlha. A subsequent request to the Board by Ms Ntlha to withdraw her resignation due to a change in personal circumstances has been accepted by the Board, per the announcement made on SENS on 6 September 2018.

SUBSEQUENT EVENTS

GBK: strategic decision

Shareholders are referred to the cautionary announcements issued on SENS on 17 August, 28 September and 24 October 2018.

In light of GBK's continued underperformance in the current macroeconomic environment in the UK and deteriorating financial position, the Board of GBK has initiated a CVA process with the assistance of Grant Thornton. This decision follows extensive investigation into the options available to improve GBK'S financial stability.

CVA Process

The CVA is a process which is unique to the UK and employed increasingly in the food services and other industries given the rising percentage of distressed businesses in the current adverse trading conditions.

The CVA is designed to promote the long-term financial viability and sustainability of an operation. In this regard, the goal will be to reach binding agreements or compromise with GBK's unsecured creditors, with a view to restructuring the business's leased property portfolio in line with current market valuations. This could potentially enable GBK to exit underperforming sites and achieve rental reductions on others, thereby improving the health and profitability of the portfolio and general financial performance of the business.

Support of 75% is required from the unsecured creditors to proceed with the CVA.

Whilst this process evolves, shareholders will be updated when appropriate.

Coega Concentrate Tomato Paste Plant

The past growing season proved to be an extremely challenging one, with drought playing a significant role in the outcome. Despite the best efforts by the plant's management team and growers, production was substantially off the targeted volumes for viable operation of the plant and highlighted again the necessity for expertise in, and support to primary farming and growing operations, to ensure consistently high volumes of supply. The plant made an operating loss of R17.8 million for the review period; in this light, and in anticipation of further losses, operations at the factory were ceased with effect from 5 June 2018. Management is pleased to advise shareholders that subsequent to the review period, a prospective buyer for the business has been identified and negotiations regarding the sale are in progress.

LOOKING FORWARD

Despite challenging local and global trading conditions, the Board and management are satisfied that the Group's growth agenda and strategies are clear. The focus will be on the fundamentals and prioritising allocation of capital and resources on growth projects.

The opportunities to deliver against the growth agenda have been identified both internally and in the market. Management's outlook remains positive.

PROSPECTS

  • SOUTH AFRICA AND AME REGION
    Our operations are well positioned to capitalise on available discretionary spend in the Group's traditional peak holiday period. Management is, however, of the opinion that trading will be relatively muted, adversely affected by a shorter year-end school holiday duration and sustained financial hardship (not least the impact of recent fuel price increases) experienced by consumers.
    We anticipate that growth over the forthcoming period will be driven by our Leading brands (specifically the Quick Service brands), which will benefit our Logistics and Manufacturing operations, and we will ensure that they continue to be optimally resourced to maintain their leadership position in the market. Our primary focus in the Signature portfolio will be on margin improvement. We will continue to review our offering to ensure the footprint aligns with our markets and offers the desired return on investment.
    In terms of the current socio-political environment, management anticipates that social unrest is likely to escalate leading up to the national elections in 2019, and will affect our staff and customers, impacting on the performance of our operations.
    With regard to the Constitutional Court ruling regarding temporary employment service providers, and following an analysis conducted across all our business units, management has developed a programme to ensure optimal manpower planning within the parameters of the legislation. The programme will be implemented with effect from October 2018, and while every effort will be made not to compromise recent efficiencies achieved in our operations, it is anticipated that a loss of flexibility will arise and increased labour costs will be incurred.
    The Board and management remain receptive to prospective local acquisitions which align with the Group's core competencies and which will further our goal to be the leading innovative branded franchised and food services business in South Africa and select international markets by 2020.
  • UK
    The market will continue to be defined by uncertainty as the Brexit process unfolds, which will weigh on both sentiment and spend. Our primary challenge in the UK will be to re-establish GBK's gold standard across the entire value chain and customer journey and ensure the business is optimally structured to manage ongoing trading challenges.

DIVIDEND AND ALLOCATION OF CAPITAL

No dividend is declared for the period under review.

Following a capital structure review to ensure appropriate levels of debt and prudent capital allocation practices, the Board has resolved that, subject to operational requirements and potential acquisitions, future dividends will be triggered when the short- to medium-term gross debt:EBITDA ratio reaches two times. The ratio as at 31 August 2018 was 2.49 times (2017: 2.66 times).

Shareholders are reminded that the company is trading under a cautionary announcement as released on 17 August 2018, 28 September 2018 and 24 October 2018.

AUDIO WEBCAST

A live audio webcast of the Group's results will be held at 10:00 (SAST) on 29 October 2018.

To pre-register link to: https://ccwebcast.eu/links/famousbrands181029/

On behalf of the Board

SL Botha
Independent Chairman

DP Hele
Chief Executive Officer

 

Midrand

29 October 2018