Business

40 new restaurants for owner of Steers, Wimpy and Milky Lane

Jonathan Hoyle

 ·21 Oct 2026

Famous Brands has seen its profits shrink in a difficult economic environment, despite a strong push to expand its footprint.

In its latest interim financial results, the company reported approximately R4.3 billion in revenue, 2.3% higher than the same period in 2025.

Year-on-year, the fast-food giant’s operating profit dropped from R393 million in the 2025 interim period to R375 million in 2026, a 4.7% decline.

Famous Brands said the slow growth and decline in profitability were largely due to South Africa’s current economic environment.

“The US-Iran conflict has added to South Africa’s economic pressures by driving up oil and fuel prices, increasing inflation and operating costs,” the group said.

“Higher transport and energy costs, together with uncertainty around interest rates and economic growth, are making consumers more cautious and increasing demand for value and affordability.”

The company said this difficult economic backdrop had reduced consumers’ discretionary spending on expenses such as dining out.

The difficult operating environment and slow revenue growth were reflected in investors’ sentiment, with Headline Earnings Per Share (HEPS) decreasing by 3.2% year-on-year.

Famous Brands increased its dividend for the six months ended 31 August 2026 by 4.9%, from 162 cents in the 2025 interim period to 170 cents.

While HEPS decreased by only 3.2%, basic earnings per share declined by 23.4%, largely due to a key disposal.

Famous Brands is selling part of its stake in Retail Group Botswana, reducing its shareholding from a 51% majority to 30%.

The company said the disposal of Retail Group shares aligned with its “capital-light expansion approach outside South Africa.”

“The transaction, which is expected to be completed by 28 February 2027, will see our existing Botswana-based partners acquiring this shareholding, following implementation of the transaction and fulfilment of all conditions precedent,” it said.

Famous Brands previously said the disposal was due to Retail Group underperforming amid difficult economic conditions in Botswana.

Despite the weaker-than-expected performance, Famous Brands said it still sees potential in the overseas market.

The company said it “continues to see long-term potential in that market, where our brands remain well established and relevant to consumers.”

Still growing

Despite the difficult economic conditions in South Africa, Famous Brands expanded its footprint by opening 40 new restaurants and revamping 66 outlets.

Most of the new stores were part of the group’s leading brands division, which includes franchises such as Steers, Debonairs, and Fishaways.

36 new restaurants were opened in this division, which included smaller restaurant formats and drive-thru offerings.

The company said the store openings and new formats were to “meet consumer demand for convenience and accessibility.”

For the company’s signature brands division, which includes restaurants such as Mythos, Turn n Tender, Paul and Vovo Telo, the net number of stores decreased.

The group opened four new restaurants in this division, but closed 6 during the interim period, resulting in a net decline in signature brand outlets.

Famous Brands also noted that revenue decreased in this division by 8.4% year-on-year to R95 million and reported an operating loss of R9 million.

The group said it had made changes to improve the performance of this segment, but they would likely only be noticed in the 2027 full-year results.

“Management has taken a range of corrective actions to restore the Signature Brands portfolio to profitability, including management changes, store closures and cost reductions.

“The impact of these actions is expected to become more evident in our 2027 full-year results,” the company said.

Famous Brands interim financial results