The year 2022 was another uncertain and volatile year. All our trading markets endured the dual pressures of continued COVID-19 restrictions and weak economic conditions. Famous Brands remained resilient thanks to our initial financial management measures in response to the pandemic. This prudent and conservative approach meant that our revenue numbers improved in response to the first signs of economic recovery.
Our key focus areas for 2022 were the full financial recovery of our business and to continue to shield our franchise partners from the ongoing impact of COVID-19.
Despite the challenging operating conditions, the Board was pleased to reinstate the dividend. The Group has produced resilient results and has a good outlook for future growth, allowing the Board to declare a dividend of 200 cents per share.
Famous Brands began as a family business, and in many ways, we have retained the essence of comradery in the business. We continue to protect and nurture our franchise partners so that they can positively impact the communities that they serve.
The continued success of our franchise partners is integral to our sustainability. We strive to deliver the best possible service to franchise partners while offering high-quality products at value for money prices. Looking after franchise partners also requires constant menu innovation to provide meals that meet and exceed customer needs and expectations, including the desire to eat healthier. We will also continue to innovate with our digital offering.
Many of our franchise partners are still recovering from the worst impacts of COVID-19. While conditions have improved, trading activity is still below pre-pandemic levels. This is particularly pronounced in our Casual Dining Restaurants. The Board decided to continue to support franchise partners with reduced franchise fees, lower marketing fund contributions and deferred payment structures. This support was further extended to the SA franchise partners affected by the July 2021 civil unrest.
The Board has overseen the strengthening of the various brand teams with greater depth of focus and specialist skill over the year.
Famous Brands has further improved its risk management function over the past few years with a dedicated Group Risk Executive and continuous risk awareness and mitigation. As part of our financial statement audit, KPMG provided feedback on the control environment from an audit scope perspective.
Deon Fredericks, our new Group Financial Director, has established a specialist and disciplined finance function for the Group. Deon, a seasoned finance professional, has further encouraged greater collaboration between the Head Office Finance team and employees in the various operations. In addition, new automation and consolidation tools are in development for deployment across the business.
Building our teams through smart retention, development and attraction activities is a priority and is included in our strategy for the next three years.
Key features of 2022
First signs of economic recovery appear
Manufacturing, Logistics and Retail all reported improved results. While Quick Service Restaurant brands have fully recovered, Casual Dining Restaurant brands are still facing headwinds.
Board renewal
During the past year, two directors stepped down from the Board and we welcomed two new additions to the Board.
ESG awareness
We considered the growing importance of ESG to stakeholders, including funders, and approved targets for our selected United Nations’ Sustainable Development Goals (SDGs).
ESG matters continued to receive Board attention during 2022. This included considering the impacts of climate change on our business and monitoring our greenhouse gas (GHG) emissions and other sustainability initiatives. We have an ongoing drive to introduce more sustainable packaging, reduce single-use plastic usage and minimise food wastage. While we have made good progress over the years, it will remain a focus area for the business going forward.
Notably, in 2022 the Board’s Social and Ethics Committee approved the Group’s targets related to our selected five SDGs. The next step will be to entrench these targets across the business and to roll out programmes to achieve them.
In the current global geopolitical situation, the most significant ESG issues remain rising food inflation and unstable food security. COVID-19 uncertainty, climate change and conflict are currently among the main drivers of global food insecurity. With rising fuel and fertiliser costs, this situation is not likely to improve in the short term.
During 2022 we welcomed two new independent non-executive directors to the Board, Fagmeedah Petersen-Cook and Busisiwe Mathe.
Fagmeedah Petersen-Cook was appointed to the Board on 1 June 2021. Fagmeedah is a qualified actuary and experienced investment professional with extensive experience and expertise in executive roles in both the public and private sectors. She brings her strategic thinking and well-developed understanding of risk to our Board and to her role as Chairman of our Investment Committee.
Busisiwe Mathe was appointed to the Board on 20 October 2021. She is a Chartered Accountant and has held several leadership positions at PricewaterhouseCoopers, including Chairperson of its South African Governing Board. She also built and coordinated the firm’s cyber security and data privacy business across Africa.
Furthermore, Lebo Ntlha, Group Financial Director and non-executive director Emma Mashilwane stepped down from the Board during the year. I would like to thank both Lebo and Emma for their valuable contribution to the business over the past few years.
We welcomed Deon Fredericks, a highly experienced finance professional, into the role of Group Financial Director. Deon is well-acquainted with Famous Brands as he has been an independent non-executive director since 2018. He is already adding considerable value to his executive director role.
Famous Brands currently has an all encompassing food services offering that offers value and brands that appeal to different customer types of taste profiles. Customers appreciate the value and quality that is synonymous with Famous Brands.
In addition, the Group has been building its digital capabilities for several years. We are reaching a point where our value proposition in the digital space will meet and exceed customer expectations.
Read more about our investment in consumer-facing technology.
I would like to thank Darren Hele, our CEO, for his steadfast leadership in yet another turbulent year. Darren brings exceptional strategic and operational strengths to the business, a rare combination in today’s business world. I would also like to thank our executive team for their commitment in delivering on our strategy and our Group’s continued recovery.
A sincere vote of thanks also to thank the directors of Famous Brands for their dedication and commitment to the business during the past year. To all employees, shareholders, customers, suppliers and all other stakeholders, thank you for your interest and continued support of Famous Brands.
It was another tough year for the restaurant industry across all our markets. In KwaZulu-Natal and Gauteng, these difficult operating conditions were further compounded by the outbreak of civil unrest and looting in July 2021. Several of our franchise partners’ restaurants were destroyed, and many others were damaged. While some restaurants are still struggling, others have recovered quickly. This is thanks to the support given by Famous Brands and franchise partners helping each other, demonstrating tremendous resilience and camaraderie. I thank our franchise partners for their endurance and trust in our leadership.
Santie Botha
Chairman
23 June 2022
