Restaurant franchisor Famous Brands Limited expects its basic earnings per share (EPS) for the six months ended 31 August 2026 to drop by up to 33%, pulled down by a R40.9 million goodwill impairment following its decision to reduce its equity stake in its Botswana operations.

In a trading statement released on Sens on Thursday, the owner of Steers, Wimpy, and Debonairs Pizza confirmed that interim EPS is projected to fall between 157 cents and 205 cents per share, a decline of 13% to 33% compared to the 236 cents reported in the prior comparable period.

Reported headline earnings per share (Heps) is expected to land between 205 cents and 252 cents per share, representing a performance range of -13% to +7% relative to 236 cents previously.

Famous Brands share price

Macroeconomic pressures

The group noted that while top-line revenue performance remained resilient across its operating divisions, profitability faced severe cost pressures driven by macroeconomic headwinds:

“Revenue performance remained resilient, supported mainly by further improvements across the value chain. However, elevated fuel prices arising from the conflict in the Middle East, together with higher interest rates, created a challenging economic environment and adversely affected group profitability.”

The primary driver of the EPS contraction is a R40.9 million goodwill impairment linked to Retail Group Proprietary Limited in Botswana.

Famous Brands is disposing of a 21% stake in Retail Group, reducing its equity holding from 51% to 30%. Excluding the non-cash goodwill charge, EPS would have ranged between 199 cents and 247 cents per share.

The partial divestment is said to align with the group’s broader strategic shift toward asset-light operations across regional markets outside South Africa.

Read:
Spur takes aim at Famous Brands with new Doppio formats
Famous Brands facing a tough market

Outlining the commercial rationale for the restructuring, Famous Brands stated: “The disposal will reduce the group’s direct exposure to operating losses while maintaining ongoing economic participation in the Botswana market through its remaining 30% interest and the continued receipt of master licence fees under the existing arrangement.”

Addressing underlying trading conditions in the country, the group added: “Although Retail Group has continued to underperform against the group’s expectations, primarily due to the prevailing economic conditions in the Botswana market, the group continues to see long-term potential in that market, where our brands remain well established and relevant to consumers.”

The transaction is expected to close during the 2027 financial year, subject to regulatory approvals and customary conditions precedent. Famous Brands will officially publish its full interim financial results on 21 October 2026.

Read:
Famous Brands delivers double-digit dividend growth on strong fast-food demand
Famous Brands approves 5% share buyback