Famous Brands, the franchisor behind Steers, Wimpy, Debonairs Pizza and Mugg & Bean, expects its basic earnings per share (EPS) for the six months to 31 August 2026 to fall by between 13% and 33%, to between 157 cents and 205 cents, from 236 cents a year earlier. The company said in a trading statement on the JSE’s Stock Exchange News Service (SENS) that most of the drop comes from a R40.9 million goodwill impairment on its Botswana business, not from weaker restaurant trading.
The distinction matters for anyone reading the headline number. Headline earnings per share (HEPS), the measure that strips out one-off items such as impairments, is expected to land between 205 cents and 252 cents, a change of between a 13% decline and a 7% increase on the 236 cents reported in the prior period. For franchisees, suppliers and landlords who deal with the group, that suggests the core business is under pressure from fuel and interest rates but is not collapsing. Full interim results are due on or about Wednesday 21 October 2026, and those will show how margins and franchise sales actually moved.
What the trading statement says
Famous Brands’ statement gives two ranges. Reported EPS is expected to be between 157 cents and 205 cents, a decrease of 13% to 33%. Reported HEPS is expected to be between 205 cents and 252 cents, which the company puts at a change of between 7% and a decline of 13%.
The company said the expected decline in EPS is “mainly attributable” to the R40.9 million goodwill impairment relating to Retail Group Proprietary Limited, its Botswana business. Excluding the impairment, reported EPS would have been between 199 cents and 247 cents. A goodwill impairment is a non-cash accounting charge: it lowers reported profit but does not mean cash has left the business.
Fuel, interest rates and resilient revenue
The statement describes the trading backdrop in cautious terms. In its words, “revenue performance remained resilient, supported mainly by further improvements across the value chain”, but “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”.
That matches the pressure facing most restaurant and food-service operators: diesel raises the cost of moving stock to franchised outlets, and higher rates reduce what households have left for eating out. The statement does not give a rand figure for either cost, so how much of the HEPS range is explained by fuel and how much by financing costs cannot be worked out from it.
The Botswana stake sale
Famous Brands has decided to dispose of a 21% interest in Retail Group, cutting its shareholding from 51% to 30%. The company says this is “in line with the group’s capital-light expansion approach outside South Africa” and that the disposal will “reduce the group’s direct exposure to operating losses while maintaining ongoing economic participation in the Botswana market” through the remaining 30% interest and continued master licence fees.
It also admitted that Retail Group “has continued to underperform against the group’s expectations”, mainly because of economic conditions in Botswana, while saying it still sees long-term potential there. Moneyweb reported the same figures and noted that the transaction is expected to close in the 2027 financial year, subject to regulatory approvals and conditions precedent.
Context on the weak Botswana market comes from BusinessDay. It reported that Botswana is the group’s largest network of company-owned restaurants outside South Africa, with 51 restaurants, citing Business Times, and that the country’s diamond sector, which it says accounts for 30% of GDP and 85% of exports, has been squeezed by cheaper lab-grown stones. BusinessDay also noted that FirstRand has cut jobs in its Botswana operations. Those details come from BusinessDay and the earlier reporting it cites, not from the trading statement itself.
What to watch next
- The 21 October results: look for system-wide sales growth, franchise versus company-owned performance and how the group explains the gap between HEPS and EPS.
- Franchise and supplier terms: if fuel and rates keep rising, expect pressure on delivery costs, rentals and franchise fee negotiations across the sector.
- Regulatory approval in Botswana: the stake sale is conditional, and the company has given no completion date beyond its 2027 financial year.
- Competitors: rival Spur is pushing new formats into new markets, which we covered in Spur pushes Doppio formats into new markets, challenging Famous Brands.
What a business should take from this
If you supply, franchise from or lease to a food-service group, the useful reading is the HEPS range, not the 33% headline. Ask for volume and payment-term commitments in writing before the next budget cycle, and watch how the group describes its franchisee health on 21 October. If you are a shareholder, note that the EPS fall is driven by a one-off write-down tied to an offshore market the company is stepping back from, while the underlying range is far narrower.
The figures above are the company’s own expectations, not audited results, and may change when the interim results are published.
