The restaurant group plans to reduce its Retail Group stake after a R40.9 million impairment and persistent losses in Botswana.
BONGANI MALUNGA
Famous Brands plans to reduce its controlling stake in Botswana’s Retail Group Proprietary Limited from 51 percent to 30 percent after persistent underperformance. The South African restaurant group recorded a R40.9 million goodwill impairment as weak consumer spending and difficult trading conditions weighed on its Botswana investment.
EARNINGS PRESSURE
In a trading statement released last Thursday, the Johannesburg Stock Exchange listed group said the impairment largely accounted for an anticipated earnings per share decline of 13 to 33 percent. Earnings for the six months ended 31 August 2026 are projected at 157 to 205 South African cents, compared with 236 cents a year earlier.
The impairment is an accounting reduction in the assessed value of the investment, rather than a direct cash loss of R40.9 million. The proposed disposal of a 21 percentage point interest forms part of a strategy to minimise capital exposure outside South Africa.
RETAINING A PRESENCE
Famous Brands said the restructuring would “reduce the Group’s direct exposure to operating losses”. It would retain a 30 percent shareholding and continue collecting master licence fees from its Botswana operations, whose brands include Steers, Debonairs Pizza, Wimpy and Mugg & Bean.
The move follows prolonged diamond market difficulties that have pressured Botswana’s economy and household spending. Famous Brands’ results for the year ended February 2026 had already identified deteriorating conditions in Botswana and Zambia as a drag on consumer spending across its Southern African Development Community operations.
REGIONAL DECLINE
Regional revenue fell six percent to R423 million, while operating profit dropped from R51 million to R29 million. Rising living costs have added pressure: Botswana’s annual inflation eased to 7.8 percent in September from 9.3 percent in August, continuing to strain household purchasing power.
The squeeze on disposable incomes challenges restaurant operators as consumers weigh discretionary spending. Earlier reporting on Famous Brands’ 2026 annual report indicated approximately 51 restaurants in Botswana, and the company maintains that “the Group continues to see long-term potential in that market”.
APPROVALS PENDING
The transaction is expected to be completed during the group’s 2027 financial year, subject to regulatory approvals and other conditions. Famous Brands is scheduled to publish its full interim financial results on 21 October 2026.