S.Africa's Famous Brands pulls plug on Gourmet Burger Kitchen

Adds impairment, context and background

JOHANNESBURG, April 2 (Reuters) - South Africa's Famous Brands Ltd FBRJ.J said on Thursday it had decided not to provide any further financial support to its UK-based unit Gourmet Burger Kitchen (GBK) due to the uncertainty of when restaurants would be allowed to re-open because of the coronavirus.

The owner of hamburger fast food chain Steers and casual dining restaurant Wimpy said the decision may result in an impairment of the full value of its investment in GBK. The precise valuation of the impairment was not immediately available.

All GBK company-owned restaurants and Wimpy franchised restaurants in the UK have been closed since March 21 after the government told people to stay at home in order to slow the spread of the virus.

On March 23, the firm said its supply chain operations have not experienced significant disruptions. However, from March 1 in the United Kingdom and March 16 in South Africa, there has been a notable slowdown in store sales activity.

Initial indications were that sales had deteriorated steadily over the first three weeks of March as government measures take effect on restricting consumer activity, resulting in reduced footfall in shopping centres and restaurants.

(Reporting by Emma Rumney and Nqobile Dludla; Editing by Susan Fenton and Lisa Shumaker)

((Emma.Rumney@thomsonreuters.com; +27115952832;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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