Famous Brands Limited ($FBR)

Good morning. Thank you for joining Neli and I from our Midrand offices for our February 2026 financial results presentation. We appreciate your time, and more importantly, your interest in the business. And to the broader Famous Brands family across our offices, thank you. These results reflect the hard work, discipline and commitment of our people, and we are proud to share them with our shareholders on behalf of the wider team. If you've joined us before, you'll notice a tighter presentation today. We listened to investor feedback and have made this session clearer and more focused. Some of the detail we used to cover here now sits in the supplementary slides, with more depth in the integrated annual report which will be published in June. The agenda will be quite simple. It will be split between myself and Neli. I will talk first, and I will then hand over to Neli to handle the financial matters. That should roughly take around 45 minutes, allowing us 15 minutes for questions. The questions can be logged via the portal on the top left of your screen. You can log them during the presentation, but we will obviously only deal with them at the end of the presentation. You can also make your screen fuller at the bottom right. There is a button to click on. So please allow me to highlight a few achievements we are particularly proud of as a team this past year. A new and improved debt package with Nedbank again showing strong support for the business and confidence in our long-term prospects. Our strong, consistent free cash flow remains one of the key strengths of our model. The stronger balance sheet enabled us to undertake share buybacks for the first time in our 31-year history, an important milestone for the group, being able to repurchase shares at a discount to what we believe fair value to be. We retained our industry-leading Level 1 [ BBBEE ] status, reinforcing our role in supporting South Africa's economic and social priorities. Our ZAR 191 million cold storage facility project was completed on time and on budget in May 2025, a strong example of disciplined execution. We also extended our reach beyond core markets through a licensing arrangement in Malaysia, highlighting the strength of our brands and our preferred capital-light expansion option outside of SA. Here's an opportunity to meet some of the team because many of you know Neli and myself, but our performance reflects the work of a much broader team. And we made a few changes to the ExCo team during the year, and that really helped us to better support the next phase of our growth. As an example, AME, or Africa Middle East has been integrated under Derrian and his team, which improves alignment and helps us leverage our infrastructure, people and processes more effectively in the SA space. IT, led by JP, is now part of the ExCo team, reflecting the emphasis we are placing on an increasingly important part of the business. There's a financial snapshot there with 6 blocks which I'd like to spend a bit of time dwelling on. Revenue was solid, and that revenue growth translated into higher operating profit even with a few noncore areas of the business still below where we want them to be. Our debt remains well managed and at comfortable levels, as illustrated by the improved ratio. Our HEPS growth was strong and reflects the progress we made across the group during the year. Our free cash flow metric, whilst down, reflected our investment in the Midrand cold storage facility, a strategic asset that supports future growth. This year marked the peak of our CapEx cycle. And very importantly is that we are rebuilding the dividend track record the group had long been known for. The H2 growth, as an example, in the dividend was 12.8% up to ZAR 2.20 with an overall annual final dividend up 10.7%. This performance underscores the strength and the resilience of our business model. Our vertically integrated platform continues to differentiate us in the market, and we are executing with discipline and clarity in a volatile market. Our footprint continues to be strong, and our growth is in our footprint is led primarily through the successful franchising and licensing of our 6 Leading Brands across multiple markets. QSR, represented by Steers, Debonairs Pizza and Fishaways, the growth was led by Steers and Debonairs. But the national rollout of sushi enin Fishaways also improved store economics over the reporting period and supports further momentum in growing the footprint of this great brand. Casual dining. Casual dining growth was driven by Mugg & Bean and Milky Lane, while Wimpy continues to adapt to a smaller footprint in the U.K., but the footprint in SA is stable. In our Signature Brands portfolio, we have a broad range of offerings and segments in this portfolio. The portfolio is stable. However, the decline there reflects the conversion of [ Fego ], which we've spoken about for the last couple of years, and that project is now complete. Mr. Bigg's is an associate that is run in Nigeria by UACR or UAC restaurants, and that is where the Mr. Bigg's brand is housed. The stability in other really reflects our commitment to avoiding any further distractions in our business. And we are confident that we have a solid pipeline of viable opportunities and franchise partners to sustain our growth as reflected here. As seen on the slide, our anchor for our business is primarily South Africa and anchored in the South African operations being Leading Brands SA and Supply Chain SA. Leading Brands powers the business with our supply chain at the back end in service of franchisees and retailers at the front end, as we call it. And a simple reminder of what drives this business is that growth starts with restaurant sales, especially in our franchise network. So the two anchors in our business are supported by various other parts. The Southern African Development Community restaurants, or SADC, as they're known, remains a contributor, although in this past year, Zambia and Botswana were softer. Revenue in Botswana is particularly under pressure, in line with the macroeconomic realities that the country faces. In AME, we made encouraging progress this year with a lower loss than last year, but with clear action taken in the second half to improve the outlook for FY '27. And I'll talk about that a bit later. On the Signature Brands front, we're still carrying the impact of the [ poor ] company stores not being profitable, but the work done this year should materially reduce that in FY '27. The U.K. trading environment remains tough, but as with the others, we've taken decisive steps to strengthen the business through this past half of the year and into FY '27. We're under no illusion in the areas that are below expectation, we are realistic, proactive and disciplined in how we respond as a business. What supports our business is a highly scalable and trusted franchising model, which has been proven. And to reflect that this year, opening 140 restaurants is not a small feat, and the team has achieved that. Our franchise partners further underpinned our business by supporting the business and revamping their restaurants, which requires investments into their restaurants and into their own business, with 181 restaurants undergoing facelifts this past year. In line with our strategic intent of growing our footprint in drive-thru and penetrating a segment of the market that we have a weakness in and fixing that weakness, we are focusing on those drive-thrus. And again, the team has done a good job to continue to focus on that growth area. In terms of scale, we have an ability to scale, but we already have 3,034 restaurants across 22 markets. We have further grown this year through our capital-light model with reestablishing a presence in Sudan via a license model. You may remember that was a market that we had lost with the war. It was a notable market in our AME portfolio, and we are cautiously treading back there. We also, as I said, expanded into Malaysia via a license model, which is also capital-light. I spoke about Leading Brands earlier, and Leading Brands continues to be the growth engine of the business. It performed strongly. It demonstrates resilience in what is a really challenging trading environment. In terms of Leading Brands, I'll be specific around some of the focus areas. Our QSR brands continue to perform strongly. This is partly due to the competitive value offerings and successful promotions. It is a highly competitive category, and we continue to build momentum in the QSR space. We've expanded in line with where consumers at, focusing on demand for convenience into drive-thrus and smaller restaurant formats. However, that does not preclude our growth beyond smaller formats. It doesn't mean that we are not looking at larger formats and not continuing with traditional restaurant growth. But we also want to make sure that we meet the consumer where the demand is. The consumer is constantly looking for value, and we continue to introduce value offerings to our consumers and manage the food input costs that relate to that. So examples of such in our business are well reflected in the range of called [ Kopanda ] in Steers as an example, or Real Deal in Debonairs Pizza or 2 Tiger and Quick Bite in Wimpy, as the consumers would know them. And those are really examples of how we're meeting the consumer where they're at. The overall growth trajectory remains encouraging, even as demographic shifts in some major cities continue to affect selected store closures. Our net restaurant growth remains positive and healthy, and existing franchise partners continue to wish to invest in our business, but we're also balancing that off with interest from outside parties who also wish to continue to invest or look to invest in our business. The solid sales achieved has been interesting because it really comes from more familiar ways where we're seeing this past year, obviously, pre what has happened with fuel increases, but returning to familiar ways, with local tourism and traffic getting back to levels that we are more accustomed to. Our investment into the Munch software ecosystem is working well with a focus on simplifying and optimizing the restaurant processes, benefiting the operating environment for franchisees, And we're well into that program with already having 525 restaurants either opened with the system or converted to since we embarked on that program just a little over 2 years ago. And we're making good traction in evolving that ecosystem to meet the needs and be affordable for franchise partners at restaurant level. Reflecting on some of the growth at restaurant level. So system-wide reflects the total activity across the network for Leading Brands, and that was 6% across the year. And that really reflects the momentum we are building, supported by new store openings. The 6% was underpinned by 5% growth in casual dining restaurants across the period. We have split that on the graph into H1 and H2, but we've also benchmarked the prior year number in there just purely for your references and for ease of reading on the slide. The focus on the right-hand side would be what is required. So in H2, we saw a slight dip versus H1 on casual dining restaurants. There's steady performance within that category assisted by Mugg & Bean and Milky Lane store openings. If you add in the QSR dimension, you can see that the growth was propelled by QSR at 6.5% across that network and new growth in Steers and Debonairs Pizza restaurants has aided that particular growth from QSR. There is a better performance by QSR, obviously, than CDR as seen in the graph, and that assisted in lifting the group average. This interplay across our business, however, is not unusual and will be spoken about in the like-for-like numbers, which have some slight nuances in them. I'll move on to the like-for-like numbers. The like-for-like growth of 2.8% across the board showed resilience, broadly in line with our weighted price index of 3.7% across the whole portfolio. Even with lower menu pricing recovery and pressure in beef and coffee, the business held up well. And I can't highlight enough, the pressure in beef and coffee over this past year. We've spoken a lot about that, particularly at our interim results, and that was definitely something that affected us throughout the entire year. Casual dining was more moderate in the second half, as can be seen on the slide there. And particularly in H2, we saw that coming off. And that was partly due to softer trading in major malls over the peak period. We definitely saw a softening in the December to February period, probably post Black Friday, but definitely over the peak summer season. QSR fared better than CDR, with QSR faring notably better again in H2 at like-for-like as well as system-wide. So again, the national average, higher in QSR than in CDR with a blended number of 2.8%. The QSR notably better in H2 is partly as a result of the December trading at major malls. It does impact QSR less than it impacts casual dining per se based on our footprint. Going to spend a little bit of time elaborating on the supply chain. And our supply chain really has been assisted by operational efficiencies and an improved modern logistics platform as we have been speaking about at many of these presentations over the past few years. And just a reminder that our supply chain serves SA franchise partners, and we have an export component that market -- that provides the markets outside of our borders. So we operate within the borders of SA with walls and wheels. We have been talking to the market for a few years around our multiyear investment about and creating a modern, scalable logistics platform, which is now completed. So of course, there's always going to be work to do in logistics, but as we termed it Project Decade was completed, particularly with the completion of our Midrand cold storage facility. So that's really a great milestone for us, as I spoke about in the opening slides. We've started to invest in manufacturing technology that is focused on boosting production yields as more importantly, reducing waste as a very low-hanging fruit to be able to improve efficiencies. That process has started, and we've continued to focus on it. Our procurement teams have been very focused on in-sourcing projects for key commodities, making sure that we continue to cut out any middlemen where we can and really go direct to market and continue to focus on our procurement capabilities with strong and solid outputs. And the team doing a very solid job in that side, benefiting the supply chain. Our volume growth in the supply chain was supported by taking on the Coca-Cola basket and the frozen retail products that were previously outsourced and bringing them in-house into our Logistics business. That didn't happen at the beginning of the year. So it's blended through the year. So you're going to see some of that effect continuing into FY '27. And there's still a little bit of work to do on the Coca-Cola basket. But by and large, we're nearly complete with that program. It can't all be good. We have faced some challenges. So the profitability impacts from foot and mouth and higher global coffee prices I alluded to earlier, and they have been notable. Thankfully, in both cases, we are starting to see some settling down, although not -- foot and mouth hasn't been eradicated, but the pricing has settled down. So the problem still lingers in the background. Coffee tends to be settling. And again, it's -- both of these are not controllable from a management perspective and the impact of these is outside of our control, and we believe that we've mitigated and managed them well through the year. Just to put some context to the revenue growth in supply chain. So there's really 3 drivers there. Volume is obviously flattering, and we think we've done a good job with growing the basket. We've had some benefit of inflation. And again, there's a very broad basket in there. So the items that I've spoken about, although we've absorbed some pressure on them, you would still have some tailwind effect from the high inflation items such as beef and coffee, particularly in the latter end of the year. However, mix is negative on the chart, but it's not necessarily something that we are overly concerned about. There's a lot of factors in there, but 3 primarily. The menu that the brand teams put out, of which we tend to put out 2 per year, would make a difference on that, the type of items, the way they sell them. The brand themselves, so the interplay between QSR and CDR that you saw in the graphs would have a different effect on supply chain on the mix. So that's natural. And then, of course, what retailers stock on the shelves supplied through our retail team and supply chain would also make a difference to that mix. So the mix is almost a balancing number based on the activity within the business. In terms of the Southern African Development Community, we have been impacted this year by poor trading conditions in Botswana and Zambia. Both are profitability impacts outside of our control, but we've worked with them, and we're managing them well. We've implemented cost-saving measures in Botswana, which is a lot easier than in some markets because it's a company store model primarily. So we've been able to have a lot more influence over the cost, but the cost base is obviously bigger. And the team have done a good job of digging deep into the business, but been very difficult as revenue has been under pressure. Our Zambian franchise partners have been amazing, although the crisis has now abated on power solutions. They've been through a very difficult time over the past 2 years. And we supported them, but they've also been good to their businesses and invested. So we've passed that crisis, and we look forward to certainly better times in Zambia. As post year-end, the Mauritius was converted to a franchise model. So that did happen in April. And again, we'll talk to some of the effect in AME moving forward because that was previously sitting in AME. So that happened post year. Despite all of this activity, we're very proud that we opened 16 new restaurants in the SADC environment, and we continue to be very optimistic about the marketplace. We also have penetrated Munch into that environment. So that would be included in the 525 number I spoke about. And again, helping franchisees in this marketplace to get better operational efficiencies through their IT at restaurant level. The AME portfolio remains subscale with a few challenges in a few markets, and we are certainly ticking off those challenges one by one, and we're working through and making good progress in that particular market. It's not all doom and gloom. There's been a growth in some of these markets, and we're seeing some recovery in some markets. As has been spoken about before, we have been hampered in the UAE, and we're making progress there. From a legal perspective, we're not at any risk. We have -- we are protecting our intellectual property, but it has been quite a big setback for us in terms of the dispute with the multiple store operator franchisee and set us back in that particular market. But that is the nature of franchising, and we've had to work with it. During H2, Kenya was converted to a franchise model on the QSR stores. So we have a fully franchised model now in Kenya, and we'll start to see the effect of that into F '27 being fully franchised now. Malaysia, we entered again in H2, and that was through a master license agreement, which we're very excited about. We opened 2 restaurants, and we have another in the pipeline which should open in H1 of this year. The reentry into Sudan, I spoke briefly about. Again, it was a very exciting market for us. We've been there for a long, long time and sadly took a setback with an item out of everybody's control. We have implemented a new operating structure, as I spoke about early on, on the team slide and integrating that under Derrian's team. That has happened in H2. And of course, there was some cost and work to get that done, and we should be seeing the benefit of that moving into FY '27. The Signature Brands portfolio remains resilient. We are finding that there's certainly limited consumer spend on dining and leisure in that particular space and finding a little bit tougher than in the Leading Brands space. Of course, we have a broad perspective of brands in this portfolio. But from our perspective, seeing a lower demand for eating out impacting restaurant turnovers in the nighttime occasion as well as in some markets. Our hospital brands or captive market is performing well. And we're clear the obvious trend is that well-situated sites or venues continue to perform strongly. So a strong venue tends to get better, and that does relate to some of the demographic changes you're seeing in SA, particularly where security, lighting, backup power, backup water, all of those things need to come together to add to the consumer experience. Delivery and call and collect continues to grow strongly in this space, so the appetite for niche consumers who can afford that space continues to be there. So delivery, particularly in this space, remains strong. However, just because Signature Brands tends to play in a slightly higher income bracket, doesn't mean that you are immune to what's going on. And we're seeing that there's focus on value-led offerings and promotional activity, especially around special occasions. It's always nice to see we had Valentine's Day on a Saturday this year, and numbers were fantastic. We saw some strong support for Mother's Day that has just gone past, particularly in some key brands where you'd expect to see that happening. So when there's activity, there's money, but you need to make sure that your offering is correct. People are not spending at the same level. There's an appetite to go out, but not necessarily to spend, which is really what we're talking about impacting on revenue. And again, the Munch system has penetrated into Signature Brands, and we are seeing the benefits also in this space of that POS solution assisting franchisees. The sales data is less attractive than Leading Brands and Signature Brands. And you can see in H2, there was some pressure as reflected in the results. The like-for-like is under some pressure. The system-wide would look worse there because of some store closures. So the Fego conversions, as an example, would be affecting that. So there is some movement in these numbers which are not necessarily totally reflective of the restaurant performance. But broadly, as I said, that there is some pressure in this category, and we are feeling that across some of the different perspectives. The U.K. is a challenging operating environment, and we've seen a lot of negativity, particularly in the consumer space there. We continue to focus on the business. It's been the toughest financial year that we've had in the history of owning the business, even tougher than some periods like COVID. The cost pressures there are significant across the restaurant space and across the franchise space, and that starts to filter through right through from food through to rates and taxes across the board. The interest rate cycle is also at a high, and we are definitely seeing that, that is dampening franchisee appetite to expand as well as any revamp activity. So that becomes a challenge, and we're seeing that we're mitigating through that. The cost of living crisis, as it's termed there, is definitely eroding confidence. There's probably more perceived pressure than there is real pressure in some cases and definitely affecting spending patterns. We've knuckled down and really focusing on what we can focus on. We're focused on strengthening the relationship with our franchise partners as we always do, working with them and driving the business. As an example, dropping off in home delivery, we're trying to offset that by in-store dining activity again and working with franchise partners. We also simplified the structure during this past year, bringing some of the back-end services into Derrian's team, working through that. So the new simplified operating structure would benefit this business in FY '27. And some of that change happened in H2 and would be in these results. Just a quick snapshot of where the group is at on a 5-year basis. And really just to give you some context as I get ready to hand over to Neli to give you some detailed financial information. We are really on a positive trajectory and have done a lot of work in the business over the last 5 years. The group revenue compounding is on a nice trajectory. We're always pushing to drive it harder. It's profitable and it's healthy revenue. The operating profit reflects the same trend, other than in 2023, which there was a bump there from a once-off inflow into the business, which would be stripped out. So it was unusual income that came into the business. So it's not normal operating income. The operating profit line would be showing a very similar trend to the growth on the revenue. The operating margin is operating within a very tight range there. Again, if you strip out 2023, we look at that impact, we've probably disappointed ourselves a little on 2026. But we are confident that if you had to have a realistic beef scenario, we would have easily improved our operating margin. So the beef crisis, we absorbed, we took in, and that has definitely impacted our operating margin, and we know that, that will ease out of the business. So a crisis that I think has been well managed is definitely not going to impact the business over the long term. And we continue to be very focused on our operating margin and working through that. This is not something that we've spoken about a lot in the past. In fact, we haven't spoken about it. But I think it's important that during this time to put some context to what we've also done over the past 5 years. And the business continues to generate consistent free cash flow. Over the last 5 years from 2022, we increased investment across the group and stepped up CapEx to strengthen the overall business platform. We took greater long-term control of our supply chain business through the ownership and expansion of our Midrand campus. With 5 years of net CapEx totaling ZAR 835 million, the major investment phase is now behind us, with spend peaking this past year after completion of the ZAR 191 million Midrand cold storage project. From here onwards, CapEx will moderate while still comfortably supporting the needs of the overall business. I'm going to stop at this point and hand over to Neli to get into some of the detail on the financial part of the business. Thanks, Neli.

Thank you, Darren. Good morning, ladies and gentlemen. We navigated some macro factors which had an impact on some of our operating segments. However, as a business, the achieved performance illustrates the positive momentum for this financial year, and this has enabled us to deliver on our capital allocation objectives. This set of results exhibits the execution of our strategy and our continued consumer preference for our brands. Overall, as Darren has indicated in the operational performance, we have growth through the expansion of our restaurant network across Leading Brands, which has benefited the supply chain activity. We also continued to manage our costs to improve our earnings. Now if we just have a look at our income statement and we compare that to last year's performance. Our revenue increased by 5.6% to ZAR 8.7 billion, and our operating profit growth of 4.5% to ZAR 955 million was driven by the growth in our South African operations. And through this, we were able to then get our net results, which is 11.8% higher than prior year. And our headline earnings also increased by 12.1%. Now if you have a look at our other income, this includes a final liquidation dividend of ZAR 15.3 million. We continued with our operational efficiency initiatives, and overall, our expenses increased by 2.9%. This was achieved mainly due to savings in our depreciation as a result of our circumspect capital expenditure, and we also reduced our share-based payment expense. However, this was partly offset by an increase in our expected credit loss provisions. And because of our Microsoft licenses, we've also had to increase -- we've seen an increase coming through in our IT costs as well as investing in our employees. Impairments, we see there for ZAR 1 million is related to computer software. We're very glad to report that our net finance costs reduced by 18% this financial year due to capital repayments as well as refinancing our debt at a lower margin. I will speak to some of this a little bit later. Our associates have healthy performance, and thus, we're receiving profit from those entities. While we pay our dues to the receiver of revenues, our tax this year is not that much higher in the current year, which resulted in a reduced effective tax rate. Just to paint a little bit more color in terms of our segment performance. You may see that our total revenue increased by 5.6% from the prior year, with South Africa being the main contributor, which grew by 6.7%. This was -- these results were achieved notwithstanding underperformance by operations outside South Africa. From a divisional revenue for franchising, Leading Brands portfolio continues to perform strongly, and this was mainly driven by volume growth across casual dining and quick service brands. This was across both our existing and new restaurants. The teams continue to focus on menu offerings and value propositions which are in response to the consumer demand. A look at our Signature Brands portfolio. This portfolio reported a mixed result, which was ultimately similar to the prior year. The teams or our franchise partners are operating in an environment that is characterized by a softer consumer demand for dining out. From our supply chain business, the revenue was driven by a combination of price mix and volume increase, which was also driven by the franchising activity. In addition, this year, we have additional volume, which is a take on of the Coca-Cola products as well as the frozen basket in sourcing. Our segment operating profit, which also improved by 4.5%, was driven by the growth in top line as well as effective cost management across the business. South Africa grew by 7.9%, which was partly offset by the operating losses from operations outside South Africa. Leading Brands' operating profit increase of 5% is due to revenue growth and cost containment measures, which was partly offset by an increase in employee costs. Signature Brands profitability is affected by performance in some of the brands, particularly in company-owned stores. This was due to the revenue being flat compared to the prior year. Supply chain operating profit improved by ZAR 61 million due to higher volumes and operational efficiencies, mainly in reducing input and conversion costs. Profitability was partly offset though by cost increase due to the foot and mouth increase, which increased the disease -- beg your pardon, which increased the beef price. We also saw coffee price increases, and both of these had a 2.1% impact on our gross margin. There was also a cost increase relating to the relocation of the cold storage facility relocation, and this -- there was also an increase in employee costs relating to the volume growth in supply chain. This is also an introduction of a new slide where we talk to you about our basic and headline earnings. Our basic earnings increased by ZAR 53 million, while our headline earnings increased by 12.1% from the prior year. And the main adjustment from our basic to headline earnings relates to the liquidation dividend of the ZAR 15.3 million spoken to earlier. Our Leading Brands portfolio revenue has increased by ZAR 58 million or 6% to ZAR 1 billion in 2026. The portfolio performed strongly, mainly driven by the performance of the -- at the restaurant front. From 2022, Leading Brands has a revenue compound growth of 7%, which is testament to the strength of our brands. This is demonstrated by the growth of our restaurant footprint and the consumer preference for our portfolio. The brands are continuously innovating on store formats, menu offerings, value proposition, all of this done in response to consumer convenience and demand. Operating profit increased by ZAR 26 million for Leading Brands to ZAR 542 million compared to prior year. We managed to report operating performance within a range of our operating comfort levels. From 2022, Leading Brands has an operating profit compound growth of 10%. This was mainly driven by the growth in revenue. We invested in the business in line with the growth while being prudent on our operating costs. Signature Brands was flat, reporting ZAR 202 million, in line with prior year. And the revenue compound growth was 9%, demonstrating resilience in a challenging trading environment. Our supply chain business increased by ZAR 415 million to ZAR 6.2 billion in 2026 compared to 2025. And this was mainly driven by the volume and pricing, including the in-sourcing of the Coca-Cola products and frozen product in-sourcing. From 2022, supply chain has a revenue compound growth of 8%, performing strongly in line with our franchising business. The supply chain operating profit increased by ZAR 60 million this year to ZAR 504 million compared to prior year. And this performance is largely driven by the top line growth and operational efficiencies in the business. We also managed to contain some overheads, although this was partly offset by the higher beef and coffee bean prices. From 2022, supply chain has had an operating profit compound growth of 9%, displaying resilience in a challenging environment characterized by [ load shedding ], though some of us who may see that as part of history, water scarcity in South Africa, which is a continued challenge, high electricity costs and other supply chain disruptions. The investments in technology also led to enhancing some of the improvement in the yields we see in that business, increasing our warehousing and distribution capability. Now if I pivot a little bit and talk about our capital allocation, our investment to deliver on our strategy have been consistent and in line with revenue. In 2025 and 2026, the CapEx as a percentage of revenue increased slightly because of the investments that we've done in our Midrand cold storage facility. In 2026, we allocated ZAR 214 million to capital expenditure for following projects in supply chain already mentioned that we've invested in our cold storage. And we've also invested in operational efficiency and technology to implement for long-term scalability. And our brands invested in consumer-facing technology as well as our franchise network support infrastructure. Mentioned earlier by Darren is that for 2027, we do expect our capital expenditure to normalize. We previously spoke to you about our debt profile and the outlook that we have. And then in this year, we actually concluded or executed a refinancing of our debt, where we were able to achieve appropriate maturity profile. This results in affordable capital near-term repayments. We were able to reduce the maturity concentration and ultimately lowered our liquidity risk. The refinancing will also enable us to reduce our finance costs. We maintained our covenant compliance under our old and new credit facilities, and we have sufficient headroom for compliance levels. Because of our strong cash generation position, we were able to continue to declare our dividends. The total dividend for this financial year is ZAR 3.82, which is an increase of 10.7% from the prior year. This dividend payout was 65.5% when calculating -- using the headline earnings per share. During 2023, the reported headline earnings were higher than normal, and this was because of the ZAR 75 million liquidation dividend which also then was used to fund the higher-than-normal dividend. We resumed dividend payout in F 2022 after trading for a full year post-COVID. As trading improved towards the end of COVID, the group reported significantly improved results, which enabled the Board to approve a final dividend of ZAR 2.00 per share. In terms of managing our cash flow, our cash generated from operations increased marginally by 1.3%, and this includes investment in our net working capital. Our net working capital changes of ZAR 78 million include a slight increase in inventory holdings, which includes our in-sourcing levels. Our trade payables were also driven by procurement and brand marketing activities. And similarly, our trade receivables reflect the performance of the business. We proceeded to service our debt obligations for our interest on our debt and taxes to our revenue authorities. We then used our cash from operations to fund the routine maintenance and expansion of CapEx projects as well as investing in our fire protection system. We completed the development of our cold storage facility, which was commissioned in this current financial year. We made mandatory repayments of ZAR 140 million, which includes a voluntary of ZAR 50 million towards our debt, and we also paid for the right to use the assets that we are leasing. We settled our long-term investment scheme obligation, which also vested in 2025. And then we also had a distribution of ZAR 445 million to our shareholders for dividends to Famous Brands and noncontrolling shareholders. There was also a share repurchase which we executed as the share price we believed was below fair value. In addition to our closing cash balance, we have access to ZAR 352 million in undrawn borrowing credit facilities. The business has stable funding. I would then say in my conclusion, ladies and gentlemen, our balance sheet strength provides us with sustainable leverage levels and sufficient liquidity to fund working capital requirements as well as our capital allocation objectives. And on that note, I will hand back to Darren for the next phase.

Thank you, Neli. Much appreciated. My colleague, Ntando Ndaba, as always, has been managing the question portal, and he's going to be putting the questions to us. So we'll spend the next 15 minutes as promised on questions, and we'll try and answer them as best we can before we close out on the half hour. And Ntando, can I hand over to you to pass on the questions?

Yes. Thanks, Darren. [ Akana ] was first out of the blocks. So [ Akana ] from [ Sain ] Capital Management. How do you think about optimal brand density within a specific location? And how do you balance growth opportunities against the risk of cannibalization between your own brands? I think that's for you, Darren.

Okay. I'll start off with the M part first. I mean, obviously, with the caveat, I mean, we all compete for share of stomach. So whether you feel like a pizza or a burger, you're satisfying a hunger. So we don't think in our portfolio that we compete aggressively with each other. But of course, there's overlap, as per my caveat. So from the cannibalization perspective, we know that the caveat applies, but we're comfortable that we don't aggressively compete with each other across the categories. But of course, you would compete on occasion. On the -- from our own cannibalization, not overly concerned around that. Around each brand saturation, I think -- what was the term used there, sorry? Brand...

To cannibalize?

No, the first part of the question.

The density.

Brand density, sorry, apologies. So yes, I mean, obviously, each brand has got its own plan and its own runway. And across all of our brands, we think that there's strong runway. I mean, the convenience part of it would drive that runway. We see a lot more aggressive runway on QSR in the SA and SADC space than potentially on casual dining within our format, but that is really just a function of probably where the economy is, what's happening to some of the trading environments. It's not an inherent challenge. And globally, I think we're seeing a little bit more pressure on casual dining. But if you can get the formats right, that does unlock opportunities. So brands like Wimpy, Mugg & Bean and Milky Lane are really unlocking those opportunities through formats. So every one of our brands, we think, has still got runway. We're seeing that in the SA space. There's still a big competitive landscape out there. So really an opportunity for us to continue to fight for market share in essence.

Okay. And then two questions from Nick, one on restaurant formats and the other one on sushi. So the second one should be quick. On the restaurant formats, this is Nick from News24, just for clarity. How many drive-thrus and smaller restaurant formats have you got in your portfolio at the moment and which brands? And just a follow-on to that is how many do you plan to roll out in the coming year?

Okay. So, I mean, drive-thrus is easy because it's a physical format versus smaller formats. I mean, smaller formats is probably more of a generic term that we use. I mean, really, what it's saying is using the context of smaller rather than what was previously bigger. So probably a little bit more confusing. So Wimpy, that potentially used to be 400 square meters today could be 200 square meters in the right environment. So that's probably the use of the word smaller. So giving you that number would be more challenging because we don't always define it in that sense. On drive-thrus, as of the end of the trading period, so end of February, the number was 79. I'm not necessarily overly keen to share some of our objectives around where we would like to be. I mean that number, we would like to aggressively grow. So we have plans in place over a multiyear period to grow that number. So yes, I wouldn't necessarily want to disclose it from a competitive perspective in terms of what that growth challenge is. But I can assure you we are aggressively playing in growing our drive-thru footprint.

Okay. And then a quick one from Nick as well. Sushi, it's in how many restaurants now? The sushi offering, basically.

At Fishaways, yes? As we speak now, it's in all, but at the end of the reporting period in February, it wasn't quite there. So through the year, we had been rolling it out. So the team has done a great job of closing that out. But as at the end of February, there were still some restaurants to be topped out during the year. But as we speak now, all done.

Okay. Probably a question for the FD. Neli, a question from Shaun, Mazi Asset Management. Give us a sense of how much capital you'll direct to share buybacks? Given the FCF and lower CapEx, it feels like this should be more aggressive than what is currently given the share price.

Thanks, Ntando. Sure. So I mean, when we undertook the buyback, it was because we saw that we could buy the share at a discounted price. It was trading below what is our fair value, and that still remains the focus. So at this point, we just -- we've got approval for us to be able to do the 5% from the shareholders. And in the balance of our capital allocation objectives, share buyback is going to be -- continues to be one of those priorities. So as and when the business is in a position, we're then allocating funds as necessary.

Okay. Thanks for that. A bit of a mouthful from [ Ross ] from Standard Bank. In the context of ongoing macroeconomic pressures, what is the outlook for volume growth and the key factors that could influence its trajectory? Are you seeing evidence of increased consumer mind share in the South African market? And how is that influencing your competitive position in the market? I'll probably pause there because there's probably like another sentence to go.

Yes. [ Ross ], I mean, the current challenges aside around what's going to happen in the macro environment around the impact of fuel, I think we're all in the same boat. For the category per se, we're still confident that the thesis around out-of-home consumption growing, we're still confident around. So we think that from that perspective, the runway still looks positive. Of course, that's a highly competitive market, and there's different ways that people can get their product. From a mind share perspective, we're seeing that, obviously, the brands that have got the right offering, the right pricing, talking to the consumer correctly, showing up where the consumer needs them to be are all in a good chance. And of course, there's a set of us, and we are fighting hard in that space. We think all of our brands have a positive stake in the mind share game, if I think we're referring to the same thing. And we compete hard in that particular space. But the outlook for volume growth per se is probably a little bit more challenging if food inflation runs again, obviously. We've just gone through that particular place, but it's certainly not negative. Are we going to get back to significant runway around people being affluent and feeling a lot more comfortable with themselves? Not so sure. We're seeing a lot of competition around the lower price points, but we're competing in that space. So we're positive about the outlook. But again, I suppose it really depends on what set of economic conditions that you're going to put forward for that scenario. But we don't -- we're certainly not negative, that I can assure you.

Okay. Thanks for that. I'll take a question from [ Becky ], [ Bataliwa ] Capital. Please help us think about the impact of higher fuel prices will have on the Logistics business and supply chain?

Yes. Thanks, [ Becky ]. I'll pick that one up. Yes, I mean, no secret. I mean, trucks run on diesel, and we run trucks all the time. So we are working through various ways to mitigate in the assumption that it doesn't come down. First prize is that pricing comes down, but we can't work on that. So we're working with our franchise partners and retailers around changing delivery frequencies where we can, but we haven't -- we struggled to do that in April because it was peak season. So we've worked through that. So reducing frequency of deliveries is one option and working with partners around the stock management, so trading off some cash flow potentially at store level around that. The other alternative is putting in temporary pricing mechanisms to be able to manage that so that you're not creating a permanent change in pricing and how can we offset that. So the team has worked on that. And the other one is that what we are seeing potentially is that food inflation will run because of it, and then we will recover that as we would normally do in that cycle. We're trying to get ahead of that because that may take longer and the pricing impact is significant. So yes, we are expecting an impact on logistics if we don't mitigate it, but we are working hard to mitigate it within reason without damaging our franchise partners' business or our own business easily. So we're in that state of flux right now. We're taking action on each of those steps that I've spoken about.

Okay. A question from [ Zaid ] from [ Wealth Vest ]. Why has retail operations suffered? Is competition too intense in this format?

I think, I'm assuming he's talking about our retail business into supermarkets. Look, competition is always intense in that space. We've been quite aggressive in getting into that space. We have seen quite a lot of interplay around in the chip market, which was a market that we were never in. We got in aggressively and we got some volume, and we're seeing some pullback on that volume. But the other one that has been challenging has been coffee. So coffee has been really around consumer drop-off because of pricing that has gone through and has been quite significant. So some of it relates to pricing and some of it relates to some of our own aggression in that particular marketplace. I mean, there definitely is some interplay too around the change that you're seeing in the retail landscape. And I don't want to obviously talk too much or stay in my lane on that particular issue, but you are starting to see different players doing different things. And of course, your basket is potentially not as well balanced as it used to be.

Okay. Another question from [ Becky ] from [ Bataliwa ] Capital. In terms of addressing the loss-making entities, the likes of AME, U.K., Signature Brands and retail, can you give us a sense of materiality of any costs incurred on different initiatives, be it simplifying the operation structures, conversion to franchise models? What does that look like? And looking forward, help us think about the profitability targets for these businesses?

Yes, I mean, I think you're looking for more granular detail. We haven't published that information. I mean, there's lots of variable costs within that in terms of the issues that you're asking for. Right now, our focus is on hitting -- getting to a breakeven basis on those business where there is no loss. And that's certainly a stepping point for all of those in terms of AME, Signature Brands, U.K., the ones that we spoke about. So we've really set that up. I mean, that's not lacking ambition. I mean, we still would like to grow those businesses, but we recognize that the losses are not palatable for a lot of reasons, and we continue to work on those. So the target from our perspective in terms of what we're trying to achieve is to recover back to there being no drag on the business for those areas of the business in FY '27. So there are costs, but there's a multitude of things. I mean, they're not one thing that would be affecting that, and we haven't published that number in terms of what they are. And they come in at different times of the year. So it's not one particular reorganizational cost, which would probably make it easy for you to put into your model.

Okay. I'll take two more questions, and then we will close, Darren, if you don't mind. Question from [ Zaid ] again from [ Wealth Vest ]. Is it not easier to build scale in closer territories abroad? What is the traction in Malaysia? Is it a sense of try and see what sticks?

Yes. I mean the closer to home, the easier, as you've seen with our SADC model, so I don't disagree with [ Zaid ] on that, and you probably understand the consumer a bit better. But our model is around intellectual property. We own our intellectual property. So an opportunity like Malaysia or whichever you would want to refer to does give us the opportunity to package our intellectual property for gain into the future. And really, what it reflects is that we have good intellectual property that people would want to implement. The key difference is really the further you get away from home to your point, you want to be doing it on a licensing basis and a capital-light basis. So we are cautious. We're not doing that. But if you look at globally that model and people have been very successful at it. Our competitors are successful at it. But we don't have blind ambitions on growing that. A market like Malaysia is easier to understand. The language is familiar, the trading environment is familiar. The product categories are known. So those are things that we would have a look at and agreed. Your model about closer to home is -- makes a lot of sense, which is why our primary focus is on SA and SADC.

Okay. And then last question from [ Uresha ] from [ Ashton ] Investments. Are you able to give us some color on trading conditions for quarter 1 of 2026?

I was expecting that to be the first question given it's topical, so I'm actually glad it's not. Yes. I mean, it's interesting because we've obviously just gone through Easter trading, school holidays, et cetera, et cetera. So surprisingly, things have held up probably better than we had anticipated given the bad news. I mean, the petrol or the fuel price issues really lingered for the whole of March before they became effective in April. So the bad news had already worked its way through the system. So yes, I mean, they're holding up a little bit better than we had anticipated. Marginally below our budgeted expectations, but definitely better than one would probably consider given the bad news that came through on the 1st of March, and that is across the board. May is probably a bit too early to tell. Our results are going out early. We saw some nice activity on Mother's Day, but it is always the middle of the month now, and one would expect that slump. So yes, definitely, we're feeling probably more bullish than if you'd asked us on the 1st of March what -- where you thought you'd be in the middle of May. And of course, the fuel price is the big elephant in the room, so to speak, in managing that particular issue. Okay. So I'm going to close out now, Ntando, if there's no more questions. If you just allow me a second to really just close out here and just to formally thank our finance team for their outstanding work and support, really do appreciate it. To the KPMG team, [ Brenda, Manoka and Zulanka ], thank you. Our results went out early this year, the earliest they've been. So a lot of hard work to try and meet new deadlines. And as I said upfront to Nedbank, they've backed the business again. Thank you for your continued support and the confidence in the business. Our sponsor, Standard Bank, for always working behind the scenes. And really to everybody at Famous Brands, including our franchise partners, a very important thank you to our franchise partners for your contribution and commitment to our business. Thank you as well to my Board and executive colleagues for their support and partnership throughout the year. And for me, a special thank you to our Chairman, Chris Boulle, for his clarity of thought, availability and steady support. And to the team that always puts us together, thank you, Celeste and [ Laura ], the [ H ] team, [ Mark and Ulandy ]. Really much appreciate it. And thank you. We look forward to engaging with you outside of this presentation.