Steers and Wimpy's parent company is writing off up to R449 million because its fancy-schmancy UK burger joint is bleeding it dry
- Famous Brands told shareholders it will write down, in total, as much as R449 million against its Gourmet Burger Kitchen (GBK) operation in the UK.
- It expects the impairment to decrease its earnings per share by more than a fifth.
- Famous Brands bought GBK for R2.1 billion in 2016. Despite promises of a turnaround, it has been nothing but trouble ever since.
In total it could write down a combined R449 million on its books against Gourmet Burger Kitchen (GBK), Famous Brands said in a mandatory note to shareholders on Thursday morning.
The impact on its results will be so big that it was required to make the disclosure as soon as it became aware of it.
The impairments will see a decrease of at least 20% in its earnings per share compared to the previous year when it reports on its results to the end of February, Famous Brands said.
The company's share price dropped more than 8% after the announcement.
Most of the write-down is in intangible assets, but Famous Brands is also reevaluating the value of GBK's property, plant and equipment, and making a nearly R50 million provision for "property related expenses" it did not further explain.
The exact values "will be determined as part of the year-end process", it said.
Famous Brands was very impressed with itself when it bought GBK in 2016. At R2.1 billion it was the biggest ever acquisition for the group, which owns burger joints Steers and Wimpy, plus 25 other food retail brands. It "saved" a great deal of money when the pound devalued compared to the rand because of Brexit concerns – and Famous Brands predicted great things from GBK.
Later Famous Brands would come to blame Brexit, and various other financial woes in the United Kingdom, for GBK's continuing poor performance – which saw an exodus of unhappy shareholders.
Wimpy sells a standard burger for R50. Steers make a huge three-patty burger (with cheese) for R87. At Gourmet Burger Kitchen a speciality buffalo-meat burger, with "baconnaise" and Red Leicester cheese, is £11.35, or just under R190.
Receive a single WhatsApp message every morning with all our latest news. Sign up here.
- High-tech sleuthing helped SA scientists find the DNA ‘fingerprint’ of deadly listeria – and save lives
- Christo Wiese drops off Forbes rich-list amid Steinhoff scandal – after losing R50 billion of his fortune
- MTN’s results show there is still money in plain old phone calls, and also war zones
- R260 million was spent to turn Cape Town into an ancient city for BBC's most expensive TV series ever
- How Cape Town avoided Day Zero and cut its water usage by 50% in 3 years - it took Melbourne 12 years to do the same
- Amazon says it's aware that some Echo devices are creepily laughing at people and it's working on a fix
- How to find a job on Google, now in South Africa
- A former Googler who started a job site says you should assume employers will find your social media — but you don't need to panic
- Music streaming service Spotify is finally 'coming to South Africa' next week
- 5G is going to make your cellphone faster than you can believe - and it is also going to be very expensive in South Africa
- Tons of recalled meat are headed for public landfill sites – and that could spell an entirely new disaster
- South Africa’s top YouTube channels feature musicians, health fanatics, wildlife – and a guy who teaches you how to play Minecraft