Famous Brands (FBR) – Back to the Future with GBK

We conduct a per store analysis to estimate the potential profitability of GBK post the CVA restructure. We believe management’s expectation of GBK breakeven in FY22 to be conservative given early signs of improvements in trading conditions in the UK. FBR’s SA restaurants underperformed the market in the last year and we think this may have been due to a focus on franchisees profitability, which may have resulted in the lower franchise revenues earned for FBR.