Famous Brands earnings hit by Botswana impairment

Staff Writer

Famous Brands expects earnings per share to decline by up to 33% in the six months ended 31 August 2026, following a R40.9 million goodwill impairment linked to its Botswana business.

The company’s brands operating in Namibia include Steers, Debonairs Pizza, Fishaways, Mugg & Bean, Wimpy and Milky Lane.

The South African restaurant group said earnings per share (EPS) are expected to range between 157 cents and 205 cents, compared with 236 cents in the corresponding period last year.

Headline earnings per share (HEPS) are expected to range between 205 cents and 252 cents, compared with 236 cents previously. This represents a change ranging from a 13% decline to a 7% increase.

The group said revenue performance remained resilient, supported mainly by further improvements across its value chain.

However, elevated fuel prices resulting from the conflict in the Middle East, together with higher interest rates, created a challenging economic environment and weighed on profitability.

The expected decline in EPS is mainly attributable to a R40.9 million goodwill impairment relating to Retail Group Proprietary Limited in Botswana.

The impairment follows Famous Brands’ decision to sell a 21% stake in Retail Group, reducing its shareholding from 51% to 30%.

The group said the move aligns with its capital-light expansion strategy outside South Africa.

The proposed disposal is intended to reduce Famous Brands’ direct exposure to operating losses while allowing it to retain an economic interest in Botswana through its remaining 30% stake.

The group will also continue receiving master licence fees under the existing arrangement.

Famous Brands said the retail group had continued to underperform against expectations, primarily because of prevailing economic conditions in Botswana.

However, the group said it continued to see long-term potential in the market, where its brands remain established and relevant to consumers.

The transaction is expected to be completed during the 2027 financial year, subject to the fulfilment of conditions precedent, including the necessary regulatory approvals.

Famous Brands said that excluding the goodwill impairment, EPS would have been between 199 cents and 247 cents per share.