Durban - Famous Brands, the owner of fast food brands Steers and Debonairs, reported a 132 percent rise in headline earnings to R22 million for the six months to August following the smooth integration of Pleasure Foods, which was acquired last year.
Despite the strong results, the share price took a 3.85 percent knock yesterday to end at R6.25.
Yesterday's fall followed an almost 40 percent increase in the share price over the past three months in anticipation of good results.
Kevin Hedderwick, the chief executive of Famous Brands, said yesterday that "the highlight of these results is the outstanding performance of our brands and the smooth integration of Pleasure Foods".
Famous Brands acquired Wimpy and Whistle Stop franchises for R150 million through the Pleasure Food acquisition. Its brands also include FishAways, House of Coffees and Brazilian Coffee.
The group's 1 044 quick-service restaurants are supported by its centralised food services division, which supplies the franchise network with dry goods, sauces, butchery and bakery products.
The group benefited from favourable trading conditions characterised by low food inflation, reduced interest rates and enhanced disposable income.
Warwick Lucas, an analyst at Imara SP Reid, said the drop in the share price could be pinned on profit taking as the good results were already priced into the stock.
"For a long time Spur was trading at a premium to this stock. But that gap has certainly closed," Lucas said.
Yesterday Spur was trading 1.06 percent higher at R5.70. The hotel and leisure sector dropped 0.27 percent.
Lucas said the retail boom was based on an expanding middle class and its disposable income. But this spend was sensitive to economic shocks and investors should be cautious.