Wimpy, Steers and Mugg & Bean owner scores big

Famous Brands, the owner of Wimpy, Steers, Debonairs and more, has seen a significant 12% jump in headline earnings, with shareholders seeing a far larger dividend payout. 

Famous Brands is a major food services franchisor known for its iconic brands, which also include FishAways, Turn n Tender, Mugg & Bean, Europa, Mythos, Milky Lane, Tru Fruit, and Vovo Telo. 

The group’s restaurant network has hit 2,979 restaurants across 20 countries. Its restaurants are split into Leading Brands, focusing on quick service and casual dining, and Signature Brands, for niche dining. 

In its financial results for the year ended 28 February, the group said that headwinds in South Africa have significantly curtailed consumer spending. 

This means that consumers prioritise essential spending and seek value for money. The report also stressed that competition remains fierce, with increased advertising activity and more promotions. 

Other challenges included deteriorating infrastructure, including unreliable electricity and water supply and logistics sector issues. 

However, there were green shoots for 2025, including reduced load shedding, improved consumer sentiment, rand stability, lower inflation, and 75 basis point interest rate cuts. 

“The landscape favours franchised brands over independent restaurants,” said the group. 

“Our scale and well-known brands provide an enduring competitive advantage,  and consumers continue to seek affordable yet indulgent moments.” 

Despite the group’s revenue only increasing by 3.2% to R8.3 billion, the group’s operating profit jumped by 12.6% to R914 million. 

Headline earnings increased by 12% to R521 million for the year, up from R465 million in 2024.

This was thanks to slower cost of sales growth compared to revenue, and a R10 million reduction in the impairment of intangible assets. 

The group said its Leading Brands portfolio performed strongly, with solid performance across its brands.

That said, the brand’s overall performance did not meet expectations due to lower consumer spending.  This subdued demand had a negative impact on the company’s manufacturing and logistics results.

Nevertheless, with smaller net finance costs, R120 million in FY24 to R105 million in FY25, the group’s total profit for the year also increased by R100 million to R584 million. 

Thus, the group’s headline earnings per share increased 11.9% to 520 cents, while the dividend payment for the year increased by 14.2% to 195 cents per share.