Famous Brands: a good bet on burg(h)ers
It is heartening to realise that no matter how straitened the economic circumstance, there’s no stopping the stout burghers of our beloved country from piling into their calorific explosion of choice.
The good people of Famous Brands have made it their mission to ensure that this is easy to achieve, covering the land with fast-and medium-paced offerings that satisfy cravings for all the major food groups at a range of price points that suit a broad slice of the economically active population.
The group has combined strong organic growth with a slew of acquisitions, most notably the purchase of Gourmet Burger Kitchen (GBK), a leader in the vibrant premium burger category in the UK, which is of a scale and ambition that could prove transformational for the group.
This is not the first successful SA company to have had a butcher’s at the state of the local market and decide that it made sense to dip more than just a tentative toe into pastures new — and it won’t be the last.
While there has been considerable focus on integrating GBK into the broader business despite challenges thrown up by the uncertainty surrounding Brexit, the concentration in the local market has been on the careful alignment of restaurant footprint to market demand.
The group’s not shy of closing restaurants where changing demographics and economic circumstances make them unviable, but it also opened 192 restaurants in the year.
Management is focusing on growth, organically and by acquisition, and its plans remain admirably ambitious.
Oakbay Resources & Energy: toxic and a tad expensive
The excellent news for Oakbay shareholders from the last reporting period was that coal production was up by 9.58%, which meant revenue soared to a mighty R462.6m for the year.
The great news for its workforce was that it notched up more than 7,134 fatality-free shifts on the Shiva Uranium mine, an admirable effort that all must hope will continue when and if it ever moves from development to doing a spot of real mining.
Apart from those two shining lights, however, it would be hard to portray the year as being a particular triumph for the company.
It must, of course, be difficult to do business when you have a reputation for being about as toxic as one of the more aggressive haemorrhagic fevers, when no reputable bank will touch you with the proverbial ordure-encrusted stick, your directorate is running for the hills and your sponsor is kicking you into touch faster than you can say "dodgy as a R9 note".
Oakbay’s board may now be admirably devoid of Guptas, but you don’t have to live at 221B Baker Street to work out who’s pulling the strings.
Lonrho’s Tiny Rowland was famously described by then British Prime Minister Edward Heath as the "unpleasant and unacceptable face of capitalism", but it’s hard not to think that he would be wearing a halo and wings when compared with the antics of this shower.
The company’s ludicrously inflated market cap has come crashing down since 2015, when the share price touched an eyebrow-raising R50. It’s now yours for R5.80 — and still looks on the expensive side of sanity.
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