Good morning. Welcome on behalf of myself, Darren Hele, and Deana-Lee, to our end February 2024 financial results presentation, hosted from our Midrand offices. Thank you very much for the interest that you've shown to register for this live audio webcast. We're sure it'll be worth your time. And, hopefully, you're familiar with the two of us, and certainly, if you follow us through the channels, you would be, although this is Deana-Lee first year-end in her official capacity, so please be kind to her on the questions. We really want her to shine through on this first occasion. Welcome to the board members of Famous Brands. Thank you for taking the time to dial in. And a special welcome to the Famous Brands family from our various offices within our business.
These are results that we've all worked hard to produce in a very tough trading environment, and I'm very proud to be presenting these results on your behalf for all of us. Certainly in these results, our resilience as a team shines through. Before I jump into the agenda, I think it's important to just recap on our business and the strong proposition that we have when we talk about the front end of our business, because nothing happens in our business unless something happens in a restaurant. From that perspective, we're confident around the robustness of our business and the business model that we have, that drives the front end of our business. That is really anchored by our exposure as a business to quick service and casual dining brands. That really is a key, key strength to our business.
The Leading Brands that we have as a category are leaders in their various segments in South Africa, and we have a very, very strong position in those particular segments, and very, very proud of the way we're positioned in the South African market. We have a Signature Brands offer, which offers bespoke casual dining experiences across the South African landscape, and again, you know, the brands that we have in that space are category leaders in their own right. Then, of course, our business is driven by science, and a lot of research and data, but also, we have a strong entrepreneurial flair, which is really supported by our franchise partners, and are really guided by the extensive input that they're providing to us and the years of experience that they have, and very much a collaborative business.
In terms of our brand numbers, you're gonna see through this presentation how we focus on four segments, which we typically haven't. We focused on three, and based on feedback from investors, we've unpacked the business a little bit more, which is in line with our internal focus, and tried to provide a little bit more clarity on the movement. There is lots of movement in this set of results, as we certainly felt the bumps in the road, particularly in SA. But the underlying business, anchored by Leading Brands, is resilient and rock solid, and we have numerous exciting platforms for growth, as you can see across those geographies.
We do continue to grow our footprint, and that is really a key part of our business, and the opening side of our business, which you see there in the, the burgundy, is a really key part of our drive. We are showing the yellow this year, which is conversions, as we've converted some of the signature brand portfolio into Leading Brands. Our business is very much around brand, location, and franchisee, and this is where we, we work with the franchisee to convert the location into another brand. Admittedly, we at a slower pace than we have been accustomed to in terms of growth, in terms of net openings, but we're definitely not concerned about that. Given the high interest rate environment and other uncertainties, we are pleased with our performance. There has been disappointments, let's make no mistakes about that.
Certainly, Nigeria has been quite disappointing. Largely as a response to the macro environment crisis there, as well as dollar-based rentals, the closures within Mr Bigg's have been significantly high. The setback in Sudan and Oman, which we reported in our H1 results, has really deflated the footprint in AME, and we are absorbing that. So in total, of the net numbers, there's a 37-unit setback based on that input, if you take that together with Nigeria. In the SA landscape, we're comfortable that we're responding to the ongoing changes in the trading environment in SA landscape, and certainly from a demographic perspective, we are managing those relocations and working with that, and confident that our brands are growing in line with the market.
It definitely is a tenant's market out there across most markets, South Africa particularly, and that does give us opportunity to grow and makes us excited about growth. So working towards the agenda today, what is critical is that I'm gonna be talking you through the first three items, and then, hopefully, I don't bore you too much, and Deana-Lee will come in and relieve that on the financial results, and then I'll recap with a strategy update and outlook, and then we'll take Q&A. We aim to try and get finished in 50 minutes, and then there'll be around 10 minutes for Q&A. And happy to run a little bit over, but we have scheduled an hour, and most people do schedule an hour for these functions.
Just in terms of the questions, you can log those via the portal at the top-left of your screen, and also, you can make the screen full with the button at the bottom-right of your screen. In terms of the operating context and operating environment, I think it's important to just unpack a little bit in terms of the factors that we face, but I'm not gonna dwell too much on the macro. I think it's important to remind ourselves of the journey we've traveled, as the results are certainly not immune from these difficult and unpredictable trading conditions. These results have been hard-earned this year, with the odd reprieve from headwinds....
And those three bullets up there around cost increases, supply chain disruptions, and a demanding consumer, are probably no different to most South African businesses right now, and certainly most across Africa. So from our perspective, we're managing those. The most disappointing cost increases around the increased failures around water, electricity, ports, and roads, which are self-inflicted pain in South Africa. The other cost increases we are accustomed to as business, and working with through that. On the supply chain disruption, Deana-Lee will talk through that, but has definitely had an impact on us, and increasing our working capital requirements within our business. So again, I'm not gonna dwell on that too much. We're gonna unpack quite a lot of this through the presentation. Unfortunately, the conversation one has to have, and I will keep it short, is around load shedding.
We're in a lovely period right now, and people's memories are short, but it's been a very, very tough year, and a reminder that we've continued to support our franchise partners during load shedding conditions. We've made great progress with our franchise partners on stepping up our APS, and it's gone from 82% to 95%, as you can see on the slide. And that was 91.3% at half year, so the work to meet our target was done in H2, and we're very, very proud of that. And thank you to Möller and our leading Leading Brands regional teams for the effort that's gone in to work with franchisees to make that investment. Closing that 5% gap is gonna be harder. The last 5% is gonna be tough, but be assured that work is already underway in terms of closing that gap.
So the load shedding impact, I suppose, is obvious to most, and you would be seeing that through other businesses that you may follow. At half year, our load shedding impact was around 18% of sales were generated during load shedding, so that has come back down to around 15%, which talks to less load shedding, particularly over the peak period in December, and dropping that number down. So some reprieve towards the end of the year in H2, but still, the disruptions were there, and the costs are still coming through for both ourselves and franchisees. So in terms of our response, as has been well-publicized, in previous results at interims, talking about the relief that we provided to franchise partners, that again, has continued in H2.
And again, slightly lower than we had anticipated. We continue to work with franchise partners around alternative power, as I've said, and then our call centers, which are quite critical to our QSR business, have all got alternative power solutions, and working through that. So we believe our response to support franchise partners through this is the right one. We believe it benefits the overall health of the value chain in the medium term, and that is important. And as we celebrate 30 years as a listed business this year, we understand the value of long-term relationships, and we believe this goes a long way to cement those.
In terms of our own supply chain and looking at the back end of our business, we're obviously trying, like most businesses, to reduce our dependence on Eskom, and work through our own systems to become more efficient. We've used the opportunity this year to continue to build resilience, and it's necessary to keep the business activity flowing and uninterrupted. Again, the load shedding impact is obvious in our business, but it's very cost driven, and we've tried to mitigate that through investment, and we think that investment has been efficient. But it does add up, and we've spent ZAR 30 million on CapEx in the past three years working through that and trying to get better at what we do, but also managing the business to manage these ups and downs that we're experiencing from grid failures.
I'm gonna move on to our brands now, and really talking through the key part of what drives activity within our business. And I've said this many, many times, and I repeat it, is that brands are at the heart of what we do. It drives our business. Their performance drives the whole business, and they're 24/7, 365, and cross-border. As I said earlier, we are breaking the reporting down into the four segments, and I'm gonna talk you through those four segments and around the performance.
Although we continue to get great consumer support, you can see our performance on the right there, with the orange being system wide and the burgundy being like for like, and I'll unpack that in a few later slides, because we've had a very, very tough Q4, and that has definitely impacted our performance for the whole year. You will see that our H2 performance has been dragged down on that. We continue to clearly focus on the distinction between Signature Brands and Leading Brands, and that is a key part of our business. We have seen lots of positive in that there's been a recovery in mall environments, where people are getting out, and load shedding has created a safe environment in those malls because the landlords have invested in alternative power.
We've seen our loyalty programs working particularly well in our casual dining business, and in the QSR business, our refocus on drive-throughs, which we've communicated previously, is starting to bear fruit. And our continued focus on that won't go away. We have obviously felt load shedding. It's been a very challenging period up until the end of February. The poor economic conditions didn't help the environment, and there's been a slowdown in the delivery channel for a variety of reasons. And then, of course, Signature Brands, as you can see in the numbers, has been below our expectations, but it is quite a broad basket, so there are areas of outperformance within that basket, but by and large, it has disappointed us.
I mean, just to recap on those two portfolios, both are quite substantial, and we've seen quite a lot of activity this year on restaurants revamped, which I think is important in the Leading Brands context. And that does obviously create growth into the future, but it does also detract from revenue in the period that you are revamping them. So from those two portfolios, we move on, and I'll give you a little bit more detail. In terms of Leading Brands, it's no secret that food inflation has been driven quite hard in the SA context, and, you know, we proud that what we sell to people, they put in their mouths.
But as hard as we might try, the reality is that these iconic products have become more expensive, and that is the reality of what this shows you, particularly if you look at the orange line, so please focus on that. You'll see that the October peak was around transition and timing of menus from the prior year, where we went late on the prior year, and it's doubling up in the base. But if you look particularly around the end of February, I think is a good, good time to look, you can see that there's a much more normalized trading environment. The heavy prices are out of the base, so the consumer's basket year-on-year now is at a more acceptable level.
I think from that perspective, we are feeling a lot more comfortable, but if you shift over to the left and you see where we came from, you can understand that the consumer has been through a very, very tough time. Because all the price increasing that's coming through on food inflation has essentially had to be passed through at some point in time. So, you know, from our perspective, we're comfortable that there's been an easing, and, you know, we're comfortable at the point where we are, but there's definitely been pressure through the year. And we've mitigated most of this through value and innovation, but what I have to stress is that we don't use shrinkflation as a tactic, and I know that that has come through quite a lot in public commentary, and it definitely doesn't relate to us.
You know, I can assure you a King Steer, as an example, is as big and good as it's always been, so we don't de-engineer products to try and hit price. So we look at innovation, and we bring in new prices around that. So quite relieved that we're heading to the back end of some lower inflation. From a Leading Brands perspective, it's been a tough year, particularly if you look at where we were at the end of H1. So again, you know, the like-for-like number versus the system-wide there is clear to see. The provincial nuances in our business, as you can see on the bottom, is very, very important. We publish this because we service the country with seven teams around the country, covering the nine provinces.
We're very focused on geography and the nuances, and our brands cut across all of those, as does our supply chain. If you look at the like-for-like number in the burgundy, it ended up at 4.3, but that was 5.8 at half year, just as a reminder. And on the orange, being system-wide, it was 6.4 close out at the end of February, but was 8% at half year. So that really talks to the tough second half we've had, stressing again, it was the fourth quarter that was quite difficult. The provincial lens as well is obvious, but, you know, if we had a more normalized environment like the Western Cape, you can see the kind of performance that comes through versus KZN, which has improved since half year dramatically, but still relatively dismal.
The system-wide, you know, is coming right, because we've opened new stores. Some of them were stores that were closed in the riots, as an example. We're starting to see growth, but like-on-like is under pressure, and again, I don't need to remind you of the tourism collapse that is happening, particularly, over peak periods, and is making it very, very difficult in that particular, province. And working through those challenges will be difficult and take time, but we are reliant on, local government as well. Now, this is a lens that you wouldn't have seen before, so what we are trying to illustrate to you is what happened through the quarters.
So you would've seen Q1 and Q2 at our H1 presentation, and what this is illustrating to you is the purple, our casual dining portfolio, being Mugg & Bean, Milky Lane, and Wimpy, and Q2 being our end of H2, and then going into Q3 and Q4, the yellow being our quick-service restaurants. And clearly you can see a drop-off in system-wide, particularly in Q4. There was a softening in Q3, as we had reported. Around the World Cup time, we started to feel some softening. But the Q4 performance was particularly dragged down by January and February performance, which we felt a real softening in front-end sales.
On the like-for-like picture, which is the same picture, but just like-for-like relative to the 4.3, again, it shows you a very similar picture, and our quick-service restaurants feeling big pressure in January and February of this particular reporting period. So a lens that we haven't typically shown, but I think it gives good clarity to you around what has happened in H2. The front end essentially has slowed down on QSR, particularly. From a Signature Brands perspective, again, a much simpler offering, but the same trend around Q4, and to some degree, Q3 we know was around the Rugby World Cup, but Q4 was a disappointing from a system-wide perspective. Slightly better from a like-for-like perspective, but the same kind of trend, and H2 again being disappointing on that particular side.
In terms of the repackaging of the business, and you would've seen that if you've looked at the financials, the change in management structure is allowing us to report differently. And we are expanding the gap between SADC and AME and showing you what was one bucket before is two buckets. The SADC team is now run by the Leading Brands team, and we've got 207 restaurants there, and that is the business as it was. It's just really moved and reporting separately. And then, the AME team has been pushed into a separate unit, and is very, very focused on a very small part of the business, and obviously, we have growth ambitions there. We are not, you know, we're not there where we need to be yet.
We've had a few setbacks, as we spoke about the likes of Sudan as an example, and I'd like to think that we have a startup mindset in this particular business, and we're gonna be focused on some key growth priorities. Some of those are expanding into new markets very cautiously. We report on Egypt and DRC there, but they are markets... One is in AME region, one is in SADC, and they were markets that we were due to open before the end of February and have been delayed, primarily as a result of shipping delays, but also some other factors. The AME business has certainly felt pressures this year, and you can see that in the reporting, and I'll talk about that a little bit later. Apologies, the technical issue on this side.
But on the SADC side, we believe we have a well-established and profitable franchise operation, and the team again are continuing to do what they do. We've developed our own delivery capabilities in that particular market. We've continued our restaurant expansion, and we've really managed menu prices well. The market has experienced similar challenges to the SA market around inflation, food inflation, and as well as some other challenges around sourcing of product. The conditions are tough, there's no doubt about that. As I've said, around inflation, we've managed it well, and of course, the currencies are always volatile around the dollar, and we've particularly experienced some challenges in this past year. And from that side of the business, the margin is very, very healthy. The store growth is healthy. We've had good growth in net numbers. We've revamped stores.
The margin at 57.5% is prior to the company-owned restaurants. That does drop to 13.4% when you include Botswana. It is important to look at that because the blended model is often quite deceptive, so you would've picked that up in the results announcement. From a Botswana perspective, we have a great footprint, successful company-owned model. This year we've implemented delivery hub model, which is particularly exciting when you have company-owned restaurants. It's a little bit easier to do, and you can make better decisions. The inflation in that market has started to ease, which is great, and is a positive moving forward, just as we've seen on the SA landscape.
The economy has slowed, so it's not all rosy, and our revenue has definitely been throttled by some slowdown in tourism and activity along main transport routes, particularly going up to the likes of Francistown and Maun, and we're definitely seeing a slowdown there, and we're comfortable that will come back. The supply chain pressures have experienced some one-off challenges, particularly as there seems to be some disagreement between SA and Botswana around policies, and we keep experiencing challenges around simple products that we need to import from SA, and we battle, and finding substitutes is not always particularly easy. Again, in Botswana, a steady progress. We've opened restaurants, we've revamped restaurants.
The network has had a very tough time in terms of system-wide and like-for-like this particular year, and again, that margin is then blended into the SADC margin, which brings the overall margin down to 13.4%. In terms of AME, you know, again, startup business mindset has to change. We've got to get a lot more focused around what we're trying to do. We opened our first restaurant in Côte d'Ivoire this year in Abidjan, which has gone particularly well. The menu management is tough because you've got all of the same factors, and I think we've done a really good job this year.
The growth that we've seen has primarily been in the UAE, and we also acquired 10 restaurants in a joint venture relationship with our existing franchise partner, and we're focusing on turning that market around and making improvements. The economic conditions have been tough in that particular market, in most AME countries, and the restructuring of our Mr Bigg's has made it quite challenging, in that particular market. And in the stores in Sudan and Oman, I don't wanna continue to speak about, but have set this market back quite hard. Again, movement, and you'll see particularly there, the closures have been quite difficult, and the operating margin, which you wouldn't have seen last year at 77%, is actually 26% down this year, and it was a loss of 77% last year.
So actually an improvement, but you wouldn't have seen that number, and we're definitely not putting the loss forward as a positive. What we are just showing you is the progression that we're going to make, and again, I think you've seen it in other business units where we've done this, where we want to bring it out, and we want to drive and push forward. The U.K. has gone particularly well in a very, very tough year. It's been a tough market there, as has been well reported, but the market functions, our brand functions. It's a single brand market, and we continue to make progress there, focusing on quality revamps, and the supply chain challenges have eased, particularly in that market. The operating margin is stable. We continue to open restaurants.
As I said, the quality of them is important, and going forward, we haven't revamped any restaurants in the year. In terms of our supply chain, which is really the back end of the business, I'm gonna move through this fairly quickly, but from our perspective, it's a critical part of the business. It has felt a lot of pain this year in terms of the performance, but it's all for good reason, and we are confident that we're doing the right things in that particular environment. In the manufacturing environment. We've had an improved operational performance. The downward food inflation in H2 has helped. Mix has been the challenge, because as the numbers in QSR dropped, as you saw, but we have had retail to offset some of that.
So the change in the mix has been negative, but also been helpful having the retail business to pick up some of the slack on that mix. The manufacturing plants that are producing protein certainly all felt equivalent pressures throughout the year, and we had lots of highs and lows through the year on that, but we definitely at the end saw a stable gross margin, particularly coming through in H2. Coffee has been the one where we felt a lot of pressure, and has certainly put pressure on the factory margins as global prices and exchange rates have been quite tough. And then plant-based foods is a drag on the portfolio in there, but definitely is a focus area for us, and we believe it's worthwhile at this stage. From a logistics perspective, we still have a very exciting business.
The margin has been under pressure. The case volumes have been up also thanks to retail. We have obviously seen the mix change again as QSR had a tough Q4, but again, that's been offset with retail volumes. So that mix change has hurt us in one side again, but it's been positive on the other side with the retail. So we continue to focus on the business. We're comfortable the trajectory is correct. We've had lots of setbacks this year around non-fleet diesel usage, insurance costs, and some other costs, but definitely the margins are stable, and we continue to focus on what is important, and that's servicing our customer, again, keeping the margin healthy. Last in this segment is retail.
A part that I've talked about a lot, and again, a segment that we split out a few years ago. We've shown strong growth in sales volumes and distribution, that we continue to not just expand the range, but expand our customers. We think that there's a bit of trend being our friend in that at-home consumption is increasing. Some of the performance has been driven by the potato chip range, which is still fairly new to us, and some recovery in coffee versus the prior year. And in the prior year, we had a lot of material write-offs, which we don't have this year.
So very proud of the fact that the team have driven and launched 14 new products, and that's a collaborative effort with everybody in manufacturing and logistics, driven by the retail team, and we now have a margin to talk about there, which we're very, very happy about. So on that high, I think I'm gonna hand over to Deana-Lee to talk you through the financials that underpin everything that I've rushed you through here.
Thank you, Darren. Good morning, ladies and gentlemen. This is the set of results achieved under uncertain trading conditions, but they represent strength in our brands, which are key driver of our revenue growth, strong cash generated from operations up 13%, and cash realization up to 105%. It also talks to the investment in the future of our organization. Our financial year was characterized by success in the execution of our strategy, despite the structural and macroeconomic factors, which continue to impact our profitability, the profitability of our franchise partners, and the livelihood of our consumer. Darren has highlighted our responses to all of these pressures. From an overall performance, we report growth in revenue, mainly due to the expansion in the restaurant network and the turnover. This positively impacted turnover in supply chain.
However, the cost of production and the cost of supporting the network has offset growth in the top line, which put pressure on our earnings. If we compare our results to 2023, revenue has increased by 8%. Despite the pressure on production costs, our gross margin remained at similar levels as prior year. Operating profit was ZAR 49 million lower compared to the prior year, but if I may, if we exclude the GBK liquidation dividend of ZAR 75 million received during February 2023, our operating profit would be 3.3% higher, and our operating profit marginally lower from 10.6% to 10.1. Our reported headline earnings of ZAR 4.65 per share is 5% lower compared to prior year. Between February 2022 and 2023, we achieved double-digit growth. However, for February 2024, our HEPS declined, mainly due to higher operating and financing costs.
Our focus on improving working capital as we grow the business resulted in cash generated from operations increasing by 13%. We continued to monitor our levels of debt, thus marginally improving our leverage to 1.13 times after financing our investment property. Even with these headwinds, we have attained resilient results. It's at the back of these results we are paying dividends to our shareholders. This payout was guided by the principles of prudent capital management, the lower-than-expected performance in the second half, and the uncertainty in the interest rate outlook. Segment revenue focuses on profit pools before elimination, and all segments contributed to our revenue growth in this financial year. Revenue increased by ZAR 580 million due to the resilience of our consumer in this tough trading environment.
The 5% revenue growth in brands is net of the ZAR 22 million in energy relief that Darren has already mentioned, which we provided to our franchise partners who were trading during load shedding. This is in addition to our normal operating breaks of ZAR 37.5 million, which we provide to our franchisees. Our Leading Brands portfolio continues to perform strongly, mainly driven by our casual dining restaurant brands and opening new restaurants. However, Signature Brands portfolio reported a mixed results, partly impacted by the brand conversion. At the back end, manufacturing and logistics revenue growth was driven by a combination of price and volume increases. We are proud to report that the investment that we've made in retail is yielding positive results, with an exceptional revenue growth of 35% due to higher volume demand, and we also launched new products in this financial year.
Despite exiting the markets in South Sudan and Oman, AME revenue increased by 68% due to the investment in technology and the growth in the restaurant network in that market. Franchising continues to grow across various markets, improving its operating results. However, supply chain performed below our expectation due to cost pressures in an inflationary environment. Some of the overheads contributing to the 6% decline in our operating profit include costs related to the shortage in electricity. These include the energy breaks, which we provide to our franchise partners, diesel, and generator-related costs. In addition to these, other operating costs that contributed to the decline is the insurance costs, which increased significantly, the rise in our utility costs, as well as employee costs. Testament to the strength of our brand, a special call-out is that our impairments this year reduced by 68%.
Our operating margins were under pressure due to cost increases. However, they maintained similar levels compared to the prior year. True to our business, we continue to monitor our costs as these, as part of our focus on our margin improvement. Based on our financial position, our balance sheet continues to be strengthened, and the net asset value improved by 11% to ZAR 0.1077 per share, and our leverage improved slightly to 1.13 times. Net working capital increased to ZAR 351 million from ZAR 326 million in the prior year, in line with our operational needs of our business. These were to manage supply chain disruptions and optimize on our pricing, thus, inventory holdings had to increase. The trade and other receivables, as well as trade and other payables, were also driven by the business activities.
We acquired an associate shareholding in Munch Software, in line with our strategy on customer investing technology, as well as majority shareholding in Famous Brands Restaurant Holdings in Mauritius. Our investment in West Africa, we recognized ZAR 18 million foreign exchange loss on the loan to the associate in Nigeria, which talks to the pressures in that economy. Our long-term debt currently stands at ZAR 1.2 billion. Over the last 7 years, we paid ZAR 1.7 billion. This balance includes the bond financing for our Midrand campus. We are glad to report that through all of this, we maintained our covenant compliance with our primary financier. Famous Brands paid higher finance costs due to the peak in interest rates and the funding of our property.
Since February 2022, the JIBAR increased over 400 basis points, resulting in additional ZAR 38 million finance charges, which we had to pay in February 2024. Our business is highly cash generative, and our cash realization ratio was up to 105%. We also returned ZAR 410 million to... as dividends to our shareholders. Our cash generated from operations increased by 13%, enabling us to continue paying dividends to invest in capital projects. We also paid our debt capital and related finance costs. We settled our long-term investment scheme, which vested in June 2023, as well as settled our overdraft facility from February 2022... Sorry, 2023. I beg your pardon. In addition to closing cash balance, we have access to ZAR 219 million undrawn credit facilities, indicating that we have sufficient liquidity and flexibility. The business has stable funding for growth.
We focused on critical investments to deliver on our strategy, and capital investments in February 2024 was 2.3% of revenue, which is in line with our 2020 to 2023 trends. The spend was allocated to brands across the various markets, investing in store rollout and revamps, as well as consumer technology. In supply chain, we allocated capital to alternative power solutions, operational efficiencies, as well as technology implementation. The ZAR 32 million in corporate relates to our initial structural work on the cold storage facility, as well as our own IT infrastructure....
We remain committed to deliver on our strategy, and thus, we continue to selectively invest in opportunities that grow our revenue through presence in existing and new markets, enable our supply chain to operate efficiently at different touchpoints with our franchise partners and vendors, improve our consumer experience by investing in technology at the front end, contribute to the growth of our people, and important as well, is that our investments also are supported by our sustainability objectives. In summary, ladies and gentlemen, the consumer remains to be under pressure, and we appreciate that their continued support of our brands. Our results demonstrate the resilience of our business in a challenging environment. We are well positioned to a turnaround in the economy due to our low leverage and gearing. We've got sufficient liquidity and the growth opportunities that we are exploring. Thank you, Darren.
Great, thanks, Deana-Lee. Much appreciated. I'm gonna take some time now just to really recap on strategy. Obviously giving headline and not getting into a lot of detail, but I think it is important, particularly in these tough times, you know, you need to keep focused on your strategy, course correct, and I think we've done that particularly well. And through this time, our vision remains the same, what we do remains the same, and really focused on some key four or four key strategic matters. So in terms of our vision of being the leading innovative branded franchise and food service business in SA and selected markets, that continues, and really, what our four key strategic focus areas are about creating a supply chain of the future. We've spoken a lot around that, about Project Deka.
We now want to embark on, continue to focus on our manufacturing environment. The Leading Brands team, particularly, are focused on the categories that they compete in and making sure that they compete to win in those categories. We are, first and foremost, a franchise business. As much as we talk about company stores, it's a tool, as are licenses, but ultimately, what drives our business is franchising, and we continue to prioritize that. And as Deana-Lee has pointed out, capital management is critical, and, you know, through all the turbulent times that we've been through, we believe that we have a very, very strong position in that regard and a strong track record. So in terms of what we're trying to achieve, we think that that remains the same, and really adapting to the circumstances that we face.
And again, a proof of that is our steady execution against strategy. You know, making sure that we course correct, making sure we deliver around those areas. So the healthy financial metrics is important, and again, you know, really supporting what Deana-Lee has said there, there's a lot of things that we, we've done, but driving revenue is important. Focusing on our operating profit margins, despite some of the headwinds, we continue to deliver good underlying performance around those businesses, making sure we invest. We don't want to under-invest in the business, and there's enough for us to do in that sense, and we also have access to enough funding to be able to do that. We're not starving the business in any way.
We've got back on the dividend track, and we think that shareholders are being fairly rewarded and moving through that process going into the future. We're comfortable around that. And of course, debt, it's never nice having debt, and as a business that has debt, we have to be responsible. It's not something that historically we've always had, and over the past few years, we've got to grips with that, and really making sure we balance all the priorities around managing debt. In terms of our longer term initiatives, we continue to make progress on digital enablement. I'll get to that in a few minutes. Logistics optimization project is near completion, and we've put quite a lot into that over the past few years.
Continue to prioritize our people, and our Net Promoter Score is telling us that we're making improvements there. We've got work to do, and we continue to do that work. And you know, our single most important asset is our people. And obviously, developing a sustainability framework is important. We continue to focus on that. And we're growing. You know, we continue to grow our store footprint, the type of stores within that, the formats, the way we deliver, either through drive-through or delivery. We continue to focus on retail products, and again, unlocking new markets with one market entered in this past financial year. So from that perspective, we think that there's steady execution against our strategy, and we're very proud of what we're doing on that side and taking everybody along with us.
A very, very important conversation, though, is obviously we are a listed business, and the way we manage our capital and our stewardship of capital is important, and we're mindful of that, and we're focused on what we're doing around the investment in key parts of the business. Where we can, we'll divest from non-core assets, and we continue to focus on that opportunity. I've spoken about the debt levels and, of course, debt pricing. Debt's become very expensive now around what's happened with interest rates, and we need to be mindful of that because, you know, we don't know where the cycle ends. Our free cashflow is good. Had setbacks again with having to invest in stock through some of the challenges, but thankfully, we've been able to do that, and that is important.
Again, not starving the business of the ability to fund its own activities. The dividends, we, we've spoken about, and we're always mindful about acquisitions. So you've seen some small stuff with two, two, small but not, unmeaningful acquisitions in the year, particularly on the Munch side. So we have the flexibility to do that, the management bandwidth to be able to do it, and to work through, and a lot of support from our investment committee on that side, which we're very, very grateful for. So in terms of our CapEx focus, I mean, we're gonna continue to invest in restaurant growth, and where that's necessary through, company stores, we would do that, but again, as I said, we're a franchise-focused business.
Our logistics and manufacturing capacity still has some work to do, and we're nearing the end on the logistics side, and we'll embark on a journey on manufacturing. And very, very important is the consumer-facing technology, and that's been said a few times today, and I'll, I'll get to that. And of course, you know, getting some access to capital through our own initiatives, and we continue to do that, particularly around working capital. We think as supply chain is stable, we will be able to release some back into treasury.
Consumer-facing technology is something that really occupies our mind and is key part of our strategic focus, and then we've put the four buckets there around the digital enablement, which is really the in-store changes that the consumers will see, whichever that might be across our business. Payment and pay is very, very important. The investment into Munch is really gonna boost that and fix some of the gaps that we have in the business. But we've also continued to focus on order and pay at table and contactless payment solutions. We're towards the end of a project that is gonna achieve a lot of efficiency in that space for our franchise partners.
Yeah, the Mugg & Bean coffee subscription, I think, is just another example of building consumer-facing technology into existing offers, and that's gone particularly well this year. So well done to the Mugg & Bean team. We continue to focus on eVouch- vouchering capabilities, which again is a growing marketplace, and evolving all the time as different systems and schemes and loyalty schemes and payment methods come through the network, and we have to cope with those. Our own delivery is really something that's silent in our business that we work very, very hard on, and the team drive hard around that.
The delivery hub rollout, which Phumla has been driving hard, is really very important in our business, and there's been a lot of success on that side, and not just in the SA space, but also in SADC, and starting to do work in AME, and our call centers are something that we're very, very proud of. In 2024, there's been some really good successes around those call centers, around onboarding franchisees into those has gone particularly well, with 80% now there. Our Google reviews, something we've been silently working on in the past, has really come to fruition, and we believe we're best in class in that sense, and it's daily work. It has to be done, but the measure is important.
And then the loyalty schemes in both Wimpy and Mugg & Bean have, again, been building up over time, and part of that consumer-facing technology space, but have been really successful in this past year, and I suppose particularly more relevant as people find tough economic times, they look for value in different ways, not just in the price of your product. So going forward, as we close out here, I mean, you know, there's lots to do, and one has to prioritize, and the outlook can be bleak if you want it to be bleak, but we're optimistic about what the future holds because we've got the right brands. We think we've got the right strategy to grow.
We know we can increase our market share, albeit tough right now, and maintaining our margins is a possibility for us that we don't find daunting, and we're confident around our ability on that side. But I'm sure any business in SA particularly, and the one that trades in Africa, will tell you that there are lots of headwinds, and this past year there's been lots. And, you know, you have to make hay while you can when there's tailwinds. So there's... You know, those are our areas of focus. We think that the market favors category leaders. We still see strong demand for our brands. Our restaurant pipeline, although it was slower this year, continues to look positive. We think that as the market opens up, interest rates soften, that that will improve.
Our retail product basket continues to be exciting, and we're excited about it. Of course, as SA, you know, gets past elections, we think that, you know, more movement will be increased trading activity. There's no doubt that high fuel prices and the economic pressures have curbed people's mobility, and as we see the tourism recovery in SA, not just in the Western Cape, but on a broader South African basis, we know that everybody's working hard to try and get that right. We believe that we will benefit from that, and we know that we've suffered from that since COVID, and the curbing of people's activity. So in terms of our responses, really, we are single-mindedly focused on growing our Leading Brands in South Africa, SADC and AME markets or selected AME markets.
Our franchise partners are an important part of our business, and their sustainability is top of mind for us. We don't lose focus on that. Our marketing teams and brand teams are very, very focused on high-value offerings, and again, that's just not just low price, it is around portion size. It's about bundling, it's about, you know, all sorts of value that one can put to the consumer. It's not just single-minded. The energy and water and our independence for franchisees and for ourselves is top of mind, and our water shedding plans are starting to become work in progress, and we're progressing those. Margins and costs are something that we live through daily.
We think, given the tough year that we've had, that the margins have held up well, as Deana-Lee has said, and we continue to be very, very cost conscious. Big opportunities still in the supply chain to unlock efficiencies. The team work hard. Our Manhattan SCALE rollout is nearing the end, and that certainly is showing us how we can drive efficiencies in that. We need to get out of any distractions we have, and we continue to focus on opportunities to do that without damaging any shareholder value. And our retail range is very, very exciting. I think we battled to hide our excitement around that particular part of our business, which is really driven by our strong restaurant brands that we have. So I'm gonna close out now, really just to, you know, bring in the Q&A.
But from our perspective, we think we've got good momentum, and we're excited about the year ahead. The first two months of this financial year have been quite tough, as I said in a slide. The move in Easter was quite challenging. Easter being over month end hasn't delivered what we had hoped, but certainly the trend in May is looking good, so we're confident that again that we're on track, and that there's nothing systemic in our business that we would be worried about. But I'll let you decide, and you can answer your questions. So I've asked Ntando Ndaba, our Group Risk Executive, to read out the questions. He'll be working through them, trying to just prioritize them and put them through.
Between myself and Deana-Lee, we'll spend the next 11 minutes. If more needed, we'll do so to take those questions.
Thank you, Darren, and thank you, Deana-Lee. I actually thought the presentation was well-articulated, so I was not expecting to actually have questions on my deck. But as you know, you always have an engaged audience. So I mean, probably, Darren, I'll probably touch on where you ended. We do have a question from Siphelele of Matrix Fund Managers. You mentioned that our brand performance was below expectation as lower consumer spending dampened demand. Have you seen any improvement in consumer demand post-year end? I think you did touch on it slightly.
Yeah, I think at the end, the question probably come through.
So March and April have been tough, and for different reasons, and we've seen that recovery starting to come through in May now, which is positive. You know, and looking at days like Mother's Day, which are important, some positive coming through. We don't know what month end is gonna hold with the election. Typically, a public holiday can be good for us, but yeah, March and April have, I suppose, been soft, is the right explanation right now. And, you know, it seems that there certainly wasn't the kind of leisure travel and activity with the way Easter fell this year. And of course, Ramadan falling over Easter wasn't productive either from a sales perspective.
Okay, thanks for that. Deana-Lee, I thought the market was gonna go easy on you, you know, but already I have a question for you on the debt. Peter Takaendesa from Mergence Investment Managers. I mean, there are a few sizable debt maturities in August 2025. Will Famous Brands seek to settle or refinance the debt? What's your position on that?
Thank you, Ntando. Our plan is to look at opportunities around refinancing, but true to our objectives, which Darren had mentioned earlier from our capital allocation, is that wherever possible, we look to do repayments. So wherever... for going forward, it's gonna be a possibility of a hybrid, but for this particular one, we'll look at, definitely at refinancing.
Okay, thanks for that. Darren, an interesting question here from Raymond Steyn, choosing to be private. In terms of the potato prices, call it the high potato prices, have you seen any impact on these results?
Well, look, it's been quite an up and down year, so there's been significant peaks and then has come down. And it affects us in two ways. I mean, the one is that we obviously have Lamberts Bay Foods, where we produce potato products, and then the Steers brand, which produces fresh chips in store, would have felt it. So yeah, we've never seen these kind of prices, so a bit of a mix. On the Lamberts Bay Foods side, you know, we've obviously had to put some of that price through, otherwise we just wouldn't have even been able to keep the doors open.
So that side has been, you know, fairly positive in that the revenue growth has, has come through, and that there has been a little bit of sanity in the market creeping through towards the back end of the year. But, yeah, there's no doubt it's put pressure. It's certainly put pressure on the Steers side around pricing and margin at store level, so having to offset that with, with some other, other products potentially, you know, obviously not, as I said before, not looking at shrinkflation. So yeah, it certainly had, I would, I would certainly say, a negative impact, although, you know, it, it has contributed to food inflation.
The food inflation numbers I would've shown in the graph would've included the impact of potatoes, so it's been a contributor, as a whole to that, that pressure.
Okay, thanks for that. We still do have a couple of questions. I'll take one from Cobus Cilliers from All Weather Capital. I mean, on the future capital allocation priorities, how does the share buyback compare to your objective to expand further into specific African markets?
Yeah, I mean, I'll, I'll start off, and maybe then Deana-Lee can jump in. So, 'cause, I mean, I think the specific question related to Africa... So I, I mean, if you look at the amount that we've spent in Africa on CapEx, as an example, and if you look at the fairly small price tag on the work we're doing in Mauritius, I don't think that that's gonna make a significant difference. I think you need to look at then the capital allocation, you know, without that activity. It's not likely to be a big drainer of capital or a massive allocation. And then in terms of share buyback, I mean, it's certainly a conversation that we have.
It's part of our discussion, and again, to some degree, I suppose one would have to look at the market conditions and the share price. But at this stage, it's not an instrument that we think is preferential for us, and the primary reason around it is because of our debt. You know, I think there's lots of cases for share buybacks. In our case, with the debt and these high interest rates, the differential is certainly in the favor of not doing a share buyback at this stage.
... Okay, I don't know if you wanna add, yeah?
No, I think you've covered all of that, Darren, thanks.
Okay, thanks for that. Let me take a question from Zhirong Hu, from Ninety One Investment Management. I mean, given the... I'll call it, it's an unfortunate situation, but, I mean, he's forward-looking in terms of saying, you know, looking at the current boycott of many Western brands in the Middle East, do you see an opportunity for Famous Brands to capitalize on this situation and expand your share in the region?
Hi, Zhirong. Yeah, nice to hear from you. Yeah, absolutely. I mean, one also has to be careful that, you know, you look whether how long term it is. We have seen a definite spike in interest from some markets, and I think, unfortunately, our timing in Oman was particularly bad, 'cause that's one market that's been hit, and we did look to potentially reverse that situation, and the timing wasn't great. And we are seeing it in some markets, so, yes, definitely, you know, particularly if it's gonna continue in the medium term. So we've seen that, and particularly with us running AME out of Dubai, we are a lot closer to that, and there are a couple of prospective options. So we are very, very excited about that.
We haven't necessarily seen a pullback in Dubai, per se, to the same degree as some other markets, but it's definitely there, and definitely something that's on our radar screen. We still need to obviously stick within our strategic focus, so we don't wanna drift too far out of that, but the Middle East is within that focus. And, yeah, so the answer is an absolute yes.
Okay, there's a question here from Erosha Gamage, Sustain Asset Managers. As an interest in the dividend position, to say, I mean, can you expand on the need to cut dividend, and elaborate on the dividend policy going forward?
Okay, so I'll take that one. So from the decision for us to cut the dividend was based on purely mainly on capital management prudence. So when we looked at what the business has performed in the last half, as well as some of the uncertainties when we did a forward look, we then made a decision that it should be not necessarily that we don't reward our shareholders, but rather provide a dividend that, at that rate. And without necessarily going into a lot of history, but the dividend evolution, if we were to look at it in the last two, three years since we've resumed paying dividends, it has gradually grown steadily without necessarily doing the additional payment, which led to the 82% growth in our dividend last year.
This is also just to maintain the sustainability. Thanks, Ntando.
Okay. Thanks, thanks for that. So Raymond Steyn has a question on the QSR brand performance. I mean, how do you see our QSR brand performance versus competition, you know, the likes of KFC, over the period?
Yeah, look, that's a difficult question, 'cause we don't have the data from a sales perspective, so I wouldn't know what the performance is. I mean, we have our own internal metrics and research that we conduct, and we, particularly on QSR, think we have a handle on the factors that we're facing. You know, and do we look internally? Of course, we do. So I'm not sure, you know, what data he would have, but we certainly don't have that from an industry perspective. So it's not like retail, where you see potentially what your competitors are doing. So we have no insight into that, but certainly from our own metrics, our understanding is that they're feeling very similar challenges. I'm talking about up till the end of February now, I'm not talking about March and April.
That would be quite soon, but certainly the end of February, there's nothing to suggest that we would be an outlier. I mean, mix is important in your brand, so, you know, even within that QSR space, there's mix, and there's differences, so we would then look at the categories within that. So QSR, as a whole, is a global term. We would have brands within that that have different, different challenges or better opportunities. So, yeah, I don't know where he would be getting that data from. It, I'd need probably a more specific question than that.
Okay. No, thanks for that. So I mean, basically, I mean, that's basically all the questions that I have related to the presentation and the results. So I'm happy to hand over to you if there aren't any further questions related to the presentation.
Thank you, Ntando. Appreciate that, and, you know, I think it's opportune for me, as it's year-end, to say thank you to the finance team. Our results are out earlier than ever before. I think, I don't recall a date that we've been out this early, so that's a milestone on its own. And, yeah, thanks to KPMG for supporting us on that, to Nick, Manoka, Yusuf, much appreciated. As always, to Nedbank, you know, for being behind us, you know, the debt provider, our single debt provider, to our sponsors, Standard Bank, for always supporting us, much appreciated. And to everyone at Famous Brands, it's been a really eventful year, and we move on to the next one, but thank you.
To our franchise partners, most importantly, for helping us deliver these results, and supported by a board that has been amazing, thank you for everything that we've been through in the past year. It really is important that we have your support, and we know you do, so thank you, and for the personal support. To our Chairman, who's always there for us, and for me in particular, but for the business, too, we only have a couple of months left together before the AGM, but we look forward to making the most of those two months. So thank you, Santie.
Then lastly, to Celeste, Laura, the GMF team, and, and very importantly, Yolandi, for making this all happen, and getting us on this call on time, and, hopefully, other than the one small technical issue, has gone particularly well. So thank you, and, we look forward to engaging with shareholders, in the week ahead, so all the best.