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Famous Brands: COVID-19 – Impact on the Business of Reduced Lockdown Restrictions

Shareholders are referred to the announcements published on SENS on 23 March 2020 and 3 April 2020.

In compliance with Government-legislated lockdowns implemented across our trading jurisdictions, namely South Africa (SA), the rest of Africa and the Middle East (AME), and the United Kingdom (UK), the majority of the Group’s restaurants have been closed, with the exception of limited operations in some markets. In addition, the Group’s Manufacturing and Logistics operations have also been closed, with the exception of a small component of direct sales to the retail market and one manufacturing plant with essential-supplier status, Lamberts Bay Foods, which supplies potato products.

While the impact of the lockdowns on our business has been varied across the geographies, the Group has effectively generated negligible revenue for a period of five weeks.

In light of recent measures to ease lockdown restrictions by the Governments in our respective trading markets, the Board of Directors (“the Board”) herewith updates shareholders on the potential impact these measures might have on the business:

UK

  • With effect from 29 April 2020, GBK Restaurants Ltd (“GBK”) commenced reinstating limited delivery services in a few restaurants where practicable. This will potentially form the basis of a slow and phased restart.
  • Wimpy UK has successfully operated delivery and take-away services where practicable and in line with regulations since 23 March 2020.

AME

Our restaurants in Angola, Botswana, Ethiopia, Kenya, Malawi, Mauritius, Mozambique, Namibia, Nigeria, UAE, Zambia and Zimbabwe continue to trade, albeit with limited services.

SA

  • In terms of Stage 4 regulations which came into effect on 1 May 2020 in SA, restaurants may now offer delivery-only services. These services are confined to controlled trading hours between 09h00 and 19h00. All deliveries must be dispatched well in advance of 19h00.
  • With effect from 1 May 2020, the Group commenced reopening a limited number of restaurants for delivery-only services across a broad geographical spectrum in a phased programme.
  • The Group’s Leading brands will be the primary providers of this delivery-only service. These brands include Steers, Debonairs Pizza and Fishaways, and to a much smaller extent, Wimpy and Mugg & Bean. Details of the operating activities of each brand will be communicated on the individual brand websites or relevant social media channels.
  • Where practicable, the Group’s Signature brand offerings will trial delivery operations with limited geographical coverage.
  • In terms of the supply chain operation, support to the brands’ franchise partners will be provided by the Logistics division; at this point it is not deemed necessary to bring Manufacturing capability on line.
  • While management is hopeful that these trading activities might provide a much-needed boost to revenue and morale, the viability of this limited delivery offering remains to be proved. Shareholders will be apprised of further updates in this regard in due course.

The Board and management fully endorse the various Governments’ decisive actions to contain the spread and impact of the COVID-19 pandemic, and all of the Group’s reopened operations will be managed responsibly and in compliance with COVID-19 risk mitigating regulations.

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