Although FBR delivered softer topline growth for FY25, the tailwinds from lower food price inflation and an uptick in demand in 2H25 helped to improve profitability. While Leading Brands remained resilient, the sales contraction in Signature Brands was driven by suppressed demand for restaurant dining in the market and liquor license delays, which slowed restaurant openings in this segment. We show that FBR is losing market share as Leading Brands’ system-wide sales and like-for-like growth are slower than Stats SA take-away and fast food sales. The market share losses may be more prevalent in Signature Brands, where system-wide sales and like-for-like growth are negative, compared to SA restaurant sales.
The group’s South African supply chain was impacted by the lower volumes and lower sales value of cases, despite some price inflation benefit. This was noticeable in the Manufacturing division, which continues to face subdued demand for core products. With a phased approach to upgrading ageing plants already underway, FBR’s extra capacity should cover any downtime experienced in Manufacturing facilities. The Logistics segment is expected to benefit from the lower average fuel prices in FY26. Management remains confident that the Retail business can improve, but it will take time to recover from the volume losses experienced during FY25.
SADC continued to deliver good topline growth despite regional challenges in Zambia. The same cannot be said for the AME segment, which, despite good revenue growth, incurred significant costs related to issues with the UAE franchise partner. This, along with restaurant closures, continues to weigh heavily on margins. Management is expected to be more cautious regarding expansion and capital allocation, having exited Saudi Arabia as well. Wimpy UK underperformed again, following more store closures. Management seems to be waiting for an improvement in the UK operating environment, as it is reluctant to invest capital into the Wimpy UK business.