Wimpy UK Beefs Up Famous Brands

The Times:

Fast-food franchiser Famous Brands’ acquisition of Wimpy UK more than doubled its turnover growth.

Wimpy UK is to be used as a springboard for a British invasion of its local chains, which include Steers, Whistle Stop, Debonairs Pizza, FishAways, House of Coffees and Brazilian.

The group, which released its full year results yesterday, said its South African franchise s grew revenue by 16 percent to break the R1-billion mark. Operating profit was up 34 percent to R202-million.

Famous Brands’ new international arm, consisting of Wimpy UK and a financial holding company based in Cyprus, added R175-million in revenue and R15-million in operating profit.

Restaurant expansion slowed to 106 new stores during the year to February, from 151 the previous year.

Besides the general economic woes , this slowdown was due to the national power shortage, putting new developments on hold.

Food and other inflation caused the second half to be tougher than the first. Nevertheless, the group managed to widen its operating margin to 18 percent during this financial year from 16 percent in 2006.

Kevin Hedderwick, Famous Brands’ chief operating officer, said the group was confident that its “best-in-their-class” brands would hold out in the tightening consumer spending environment.