Good morning. Welcome on behalf of myself, Darren Hele and Lebo, to our end August 2021 interim financial results presentation. I hope that you're familiar with the two of us, and you should be if you follow us. A special welcome to Dion Fredericks, our Group Financial Director Elect, who's with us. And Dion, whilst he won't be presenting, will participate in the Q&A, if necessary. Lebo has been easing him into the role over the last couple of months, as she enters the final stretch of her tenure, and will be leaving us at the end of November. You're hearing quite a lot from Lebo today. Thank you for the interest that you've shown to register for our audio webcast. We really do appreciate it.
A special welcome to the board members of Famous Brands who've dialed in. Really great to have you. A very special welcome to all our Famous Brands family, who have started to, over the last few years, dial into this webcast, and to share the results that they've worked so hard to achieve over this past six months. Thank you, and we hope you have an informative session with us. The results are probably our most simple to explain in a few years, and we'll be talking through that. We plan to take up about an hour of your time. We will definitely try not to run over. Gonna have a quick flick over to the agenda there, which should be in the slide in front of you.
We're gonna try and split around an hour for presentations. We've got three simple sections. 50 minutes for talking through, and then 10 minutes for Q&A. In terms of the agenda, I will be talking first and then handing over to Lebo regarding financial results, and then I will come back for the performance overview, and then we will handle Q&A. Q&A will be coordinated by Ntando, who is our group risk executive. He will make sure that he manages that queue of questions and puts those questions to myself, Lebo, and Dion. As always, some of the usual info in the presentation has been relegated to the supplementary section, so when that is uploaded to our website after the presentation, some usual information that you may request is in there, and you can then refer to that.
Where information has become quite typical and you just require an update, it may not make it into the long form, but is in the supplementary section of those slides. That supplementary section has grown over the years and continues to grow. Just a reminder regarding questions, that there is a portal in front of you. If you're dialed in, please make sure you access the portal to log those questions in. You can log them in at any time, as we go through the presentation, but we will also be only picking those up at the end.
I'm gonna move over to the operating context and really try and give you the performance at a glance, and I suppose really give you a sense of where we've been over the last six months up to end of August. It's really quite simple. Although these results are pretty uncluttered compared to where we've been, they really are characterized by revenue recovery. Now, that is obviously a function of COVID-19, and that's just macro momentum, and we really are grateful for that. I think the context of us bouncing back is really, really encouraging, and I think we've bounced back very nicely. Lebo will unpack the revenue number a little bit more because it is complex with the exiting of GBK.
That has really led to strengthening of the balance sheet, and really us feeling comfortable around where we are, and having got through a really difficult period last year, we're feeling very comfortable around our balance sheet right now. Of course, improved profitability has resulted of that. I'm not suggesting that the business model has been fundamentally enhanced, but we are back, where we needed to be with margins on the right trajectory, and you'll see that as we go through the presentation. We've still got a way to go, because, you know, the six months hasn't been an easy six months, but relative to the prior year, fairly easy, given the April lockdown last year.
I mean, COVID continues to be a shadow over all companies right now and to us as individuals in South Africa and around the globe. I mean, we're managing that impact, and we continue to have an impact on our business. As you know, our sector has been one of the harder hit sectors, so we are still living with the impacts, particularly consumer behavior. We are really feeling that we are making progress in the last six months, despite having gone through a fairly hard lockdown in a very crucial period, being June, July, and feeling the effects of that. Of course, the whole period gets overshadowed by the setback of the civil unrest.
In our particular results, that's quite challenging because, you know, the unrest happened right towards the end of our financial period. We ended August, so, you know, the last seven or eight weeks of our trading for the period were really overshadowed by this difficulty. But the positive of that is that we're comfortable that we've put it behind us, and that the results going forward will be, you know, improved in terms of we've gone through the lows of this and we're starting to recover, but the effects have been significant. Just in terms of the operating context trends, I mean, there's a lot that happens out there and just provide you some general trends. I wanna talk through some buckets here, and I've got consumer behavior in front of you.
The items in bold are probably the items that are more pronounced in our business and certainly things that we've been taking note of, but it doesn't put anything else on the back burner. From a consumer perspective, we've definitely seen declining consumer visits if you strip out the lockdown period, but higher spend. We're not overly stressed around it, but certainly there's a decline in customer visits, and you are finding that your impulse purchases are dropping out, which typically tends to get your transaction count up. In terms of COVID-19, I mean, there's a lot of obvious that we're all feeling the effects of. I suppose we all moan about the impacts on our personal lives, like curfews and alcohol restrictions. There are fears around health and safety.
In our business, the limited travel and entertainment is really having the most impact on us and that restriction on people, not just necessarily from a legislative perspective, but also just people being inhibited, from just things that they used to do, going away for a cycle race for a weekend or going down, you know, watching your kids play sport or on a school tour. That kind of mobility is really impacting our business the most. In terms of dining trends, I mean, there's lots of literature around this, but there's lots happening, and there's macro trends that were happening before COVID. One of the things that we're seeing as pronounced is that mealtimes continue to blur more and more, and certainly more pronounced than they were prior to COVID.
We think that will come back, but right now we're dealing with that, and managing those effects with a much stronger lunchtime in the business than we've seen in prior years. To the socioeconomic factors, I mean, the six months has really been overshadowed by the social unrest, and the impact, particularly in KZN, but it wasn't only limited to KZN, and there was a knock-on effect across the country. From our business, we were at the coalface, as a lot of other businesses were. You know, retail was hard hit and so were we. The competitive landscape hasn't changed. I mean, we think that competition is becoming more concentrated. It's not less competitive.
What we are seeing is probably new or less new entrants into the market, which is why I say there's certainly a concentration, and we're really starting to compete hard. Maybe newer entrants are slowing down because of, you know, the risk of capital coming into this particular market. Of course, you know, food aggregators are a competitor as well, as an enabler in our business. In terms of technology, we're seeing it in our personal lives, and it's no different in the commercial world. In our space is that e-commerce and contactless payments continue to grow and be something that we're dealing with. I think we're doing a good job on that, but it's not an event, it's a process and a journey that one continues on.
What have we been doing in response to those? You know, we've been working damn hard, but I mean, fundamentally, what is it that you actually do to respond to those trends? I mean, we've been focusing on our value offerings, not forgetting where the consumer is at through all of these difficulties. You know, we continue to enhance our technological capability, particularly in digital and social media spheres. Our own delivery capacity within our business amongst our franchises as well as partnerships, we've continued to focus on that and making good progress. The health and meal blurring time trend continues, and we continue to adapt our menus to that.
Of course, you know, ESG is a matter that is a lot of concern to a lot of consumers, and it is to us, and we continue to try and adapt our business as we can to those environmentally friendly practices. I suggest that one can always do more, and we're very mindful of that. Of course, through all of this, one has to believe and understand that you are operating in a very, very tough environment around COVID-19 protocols, and you can't ignore those. Particularly, you know, if you think about the trading period behind us in August, we may be feeling a little bit more comfortable now at the back end of October, but for the period under review, those six months were really quite intense.
I don't wanna dwell too much on this, but I think it needs to be said around the impact of the July unrest on our business. I mean, I don't need to tell you anything about the unrest. We all lived through it as South Africans. In our business, we communicated at the time that there were 99 restaurants affected. In effect, at the time, as it happened, there was 109. I mean, by the time our announcement went out, we'd probably managed to restore 10. Our logistics facility was damaged. As at the end of August, we hadn't reopened 54 restaurants. I am pleased to say that as of yesterday, that number is down to 30. Quite a significant improvement since the end of August, but for the reporting period, the 54 is the correct number.
In terms of the brands, there's certainly a strong bias towards Debonairs Pizza, unfortunately, in the way things panned out, and that was really just around site locations. But no part of the Leading Brands business was spared. The Signature Brands business was unaffected in terms of direct impacts and sales, I mean, it clearly had an impact on sales. You know, we can talk about restaurants closed, but the impact was just greater than that. You know, I've never seen a trading week like that in our sector and in our data. Really, that activity was subdued for the whole of August. August was really a poor trading month. There was a long weekend in August, which we typically benefit from. Our business thrives on people moving around, and that was really subdued.
We don't really like to try and put numbers on the table about how this impacted because the number will be wrong depending on which assumptions you make. Certainly from our perspective, in terms of restaurant sales, and that's franchisee sales, the team believes around close to ZAR 85 million was lost, just in the impact of that civil unrest. In terms of the impact on our results, I mean, over the period, we think that there's around 4,111 trading days lost in July and August. There was additional wastage costs both for us and for franchisees and staff costs in stores where, you know, people have had to be paid rightly, but there also hasn't been support all over around UIF tools, et cetera, to immediately step in.
There's a lot of pressure in the system as a result of that civil unrest. We've done what we can to assist franchisees. We think that we've been very fair. We've been very supportive and done as best that we can in this context in the form of additional royalty breaks and marketing breaks. We've also put in place bridging finance to assist franchisees to get their businesses up and running where they haven't been able to do it themselves, and I'm pleased to say that pressure wasn't significant. We've roughly made around ZAR 20 million, or had to make ZAR 20 million available, and that hasn't even been utilized as yet. I think a key intervention was an insurance claims portal, where we've helped franchisees manage to navigate this difficulty.
Not all franchisees would use it because often their businesses are intertwined with other businesses they may be involved in, but I think that's been a key enabler for franchisees. I'm glad to say that in this past week, we've started to see a lot more flow of funds coming through the insurance industry. Then, of course, we also tried to help, particularly at the height of the civil unrest, with deferred payments, particularly in our logistics business, where cash flow dried up instantly around a big chunk of those restaurants. All right, I mean, I've given you some context. I think I'm gonna come back just now and get into more detail around the performance over the six months.
On the backdrop of all of that, I think we've put together a nice financial performance that we are very proud of, and I'm gonna hand over to Lebo to talk you through that performance. Lebo, over to you.
Thank you, Darren. Good morning, ladies and gentlemen. At the beginning of the presentation, Darren highlighted three key themes underlying our results, being one, revenue recovery, two, improved profitability, and three, a strengthened balance sheet. He also reminded us of the two key contexts within which we operated during the review period, being the continued COVID-19 impact as well as the civil unrest we experienced in July. I will unpack the three themes in the next seven slides, starting with salient features. The positive changes across the board clearly illustrate all three key themes. It is worth noting that our August 2020 figures include GBK, as GBK was put into administration in terms of the U.K. insolvency law in October last year.
Therefore, in order to contextualize our revenue recovery relative to the pre-COVID-19 levels, that's August 2019, it is more meaningful to do this analysis using our SA revenue and operating profit figures. Excluding marketing funds, our SA revenue recovery rate for the review period was 93% of the pre-SA COVID revenue levels and 58% at operating profit level. Given the context of the civil unrest and the COVID-19 setbacks, we are very pleased with these recovery levels, as they are in line with where we were expecting to be without the setbacks. On the liquidity front, the business remains highly cash generative, as illustrated by our cash realization rate of 99%, compared to 64% last year, August. The improved profitability reflected in our HEPS number is also reflected in our EPS number.
This is important to point out because this is our first set of results in a number of reporting periods in which we have not had to recognize an impairment. As you will recall, there were significant impairments taken related to GBK. To reassure our shareholders, and as confirmed at year-end, the U.K. process relating to GBK, which is still ongoing and is outside of our control, will not have any negative impact on our results. Our strengthened balance sheet is reflected in the improved gearing levels as well as the solid recovery in our equity position after the number of impairments taken over the past few years. We will focus on the revenue and operating profit lines in the next two slides, which provide a segmental view of the business. The ZAR 1.6 billion non-operational item in the comparative period relates to the GBK impairment.
Our net finance costs improved mainly as a combination of three factors. The first one being that the interest cost savings from our efficient use of excess cash through leveraging the flexibility of our revolving credit facility. The second one, a reduction in the IFRS 16 interest costs resulting from the derecognition of the GBK-related leases. Lastly, this year's interest is not affected by the impact of the interest rate swap liability that had been building up and was settled in the prior year. Our tax expense of ZAR 48 million represents a blended effective tax rate of 30%. This is also pleasing to see, as our effective tax rate in the recent past has been distorted by the impact of impairments.
A notable reset on our segmental report is the percentage of revenue that is attributable to our SA business, which is at 92% compared to the 77% last year as a result of GBK. The positive percentage changes demonstrate the theme regarding revenue recovery. Worth pointing out, too, is that while the U.K. revenues show a loss of revenue because of GBK not being in the current year's results, this does not result in a loss of profit, as GBK was loss-making, as you will see in the next slide. SA's profit represents about 92% of the group's profit. The improved profitability is also evident across the majority of our profit pools. You may have noticed that while AME's revenue increased, the higher revenue did not translate into an increase in AME's profit.
The higher revenue is due to the addition of new company-owned stores in the portfolio, in line with the strategy for our AME business. While the profit was impacted by once-off store pre-opening costs. You will have picked up from our balance sheet included in our long-form results announcement that the shape of our interim's balance sheet remains by and large similar to the F 2021 year-end balance sheet. For example, our total property, plant and equipment and intangible assets of ZAR 1.5 billion represents just over 50% of our total asset base. We concluded F 2021 year-end at similar levels. Overall, our balance sheet is in a much stronger position compared to where we have been in the recent past.
The reset you see on the slide mainly relates to the property, plant and equipment, intangible assets, and lease liabilities, all of which decreased with the exit of GBK from the group. We are pleased with the outcome of our continued focus on working capital management. A big thank you to JP and the supply chain team in this regard. Over and above the strong closing cash position of ZAR 391 million, I'm pleased to report that we continue to have very comfortable headroom in our ZAR 1.1 billion revolving credit facility. Our utilization rate at year-end was 64%. This has improved further to 52% at the end of August. Our equity position of ZAR 471 million represents a net asset value per share of ZAR 4.70.
While our net asset value has been negatively impacted in the recent past by the impairments, which are non-cash, it is encouraging to see the recovery from the ZAR 391 million equity position we reported at year-end. The segmental view of our net working capital paints a similar picture to our income statement segmental view in terms of the percentages that are attributable to our SA business. This year's ZAR 237 million net working capital represents about 9% of our SA revenue, excluding marketing funds, which is a notable improvement from the 25% we concluded August 2020 with. Our cash position captures the strength of our vertically integrated model. The business's remarkable cash-generating ability continues to be supported by a number of strong fundamentals. I would like to call out the big five.
One, a formidable network of franchise partners whose resilience and resourcefulness are remarkable. Two, a brand portfolio that continues to win the hearts of consumers. Thanks to Darren, Andrew, and their teams for all the hard work that goes into ensuring that our brands remain relevant in an incredibly competitive environment and sluggish economy. Three, a restaurant footprint that is not easy to replicate. Four, my colleagues across Famous Brands who passionately demonstrate the Group's core beliefs of growth, quality, innovation, speed, agility, integrity, and humility day in and day out. Last but not least, a strong and ethical leadership. As I conclude, I would like to thank Darren, the Board, and my colleagues for the wonderful memories and the learnings that I take with me as I embark on my next career chapter.
I also wish to thank our shareholders and analysts for the positive and supportive interactions we have had over the years. When Darren introduced me five years ago, just as I was about to deliver my first presentation to the market, he asked you to go easy on me, as it was my first. Wow, thank you for having honored his request and for the ongoing confidence you have invested in the business and the leadership team as we overcame the numerous challenges faced over the past five years. I am confident that Famous Brands will continue to strive to deliver value for all its stakeholders through the Group's unique investment proposition. With that, I'll hand back to Darren.
Thank you, Lebo. That's very generous of you, and thank you for all that you're doing to smooth handover to Dion. I mean, we're all very, very grateful to have such an opportunity to transition, and we look forward to the next month. Thank you, and also pleased to be able to deliver such financial results. There's probably not a lot more for me to say other than to try and sort of dig a bit deeper into the performance overview. I think it's important that we, you know, understand that we've had a COVID trading period, which has been difficult, but we've also probably had a bit of a tailwind with the bounce on last year. It's important to try and see through some of that stuff and try and understand the fundamentals of the business.
I'm gonna share some insights with you, as we go and we start to work towards our peak period this year. From a group perspective, you know, again, I think COVID restrictions continue to impact us, except in the U.K., where things seem to be back to normal relatively. We've offered significant support to franchise partners. I'm sure you know, it's never enough, but are we finding a balance between us and working well together?
We've still managed to open new restaurants through this period, which is encouraging, although they may not be as always thought through in terms of different profiles, you know, not so much shopping mall driven, et cetera, et cetera. We are still managing to find those opportunities, albeit at a lower level than you may be accustomed to us producing in pre-COVID levels. That is very encouraging. Of course, we need to continue to find operational efficiencies through various aspects, you know, whether that be menu optimization, focusing on our own delivery capability, working with third-party aggregators. You know, it's business unusual right now in terms of the way we cope with these things, but I'm comfortable to say we've got our head down and that we're doing these things.
Of course, higher food inflation, which you will be seeing, is creating a slight difference in our business. We are not uncomfortable with that, but we're working with that right now, and we're sort of entering that transition period right now, and there's a little bit of tailwind of that in the first six months, but really expecting to get more in the second. If you look at our business geographically, from an SA context, I'll narrow it down a little bit. We've obviously seen, you know, revenue and operating profit recovery after last year. Some of that just, you know, not having to do a lot, but I think we've done a lot more than is required of us.
COVID-19 continues to impact the business, and we're not trading where we need to be, and I'll show you that a little bit later. There's certainly lower levels of consumer spending, which could well be macro, could be COVID. There's a lot of dynamics at play, and we're dealing with those. We've continued to support franchisees through royalty breaks, particularly on the casual dining side, and that continues to be a drag on our revenue, but it's not something that we are concerned about because we know. You know, it's money put into the right areas of the business. Casual dining will come back, and we will be in a strong position to capitalize.
From an SA context, the 52 of those 69 were opened in the SA context, so again, comfortable that there's a fair amount of buoyancy in SA. The July restaurants, so 99 that we spoke to you about, were rendered non-operational. The 109 was the initial impact, but certainly 99 was the number that we had to work down from, and to try and get open with difficulty. Again, you know, the high food inflation is experienced in the SA context and will filter through to other markets. From an Africa perspective, so again, lots happening in the AME space. We are very still focused on our deep and narrow approach.
Again, COVID is everywhere, and it's not unique to the SA context, and we're still feeling it in Africa and to varying degrees. Of course, COVID-19 restrictions are also putting pressure on franchise partners. We've passed just in the AME space breaks relating to COVID of around ZAR 1.3 million in this period of time. We are finding franchisees, you know, are resilient in the AME space just as they are in the SA space, and I'm pleased to say that we haven't had a COVID-19 related closure. I mean, there's macro factors involved and stresses, but we're working through those. Sadly, the typical, you know, low vaccination rates in Africa are concerning.
Again, the stats are maybe not as clear as they are in the SA context, so please don't quote us, but some of the data that we're seeing can be as low as 3%. The team opened 70 new restaurants across various markets. The same trends we're seeing in SA are very encouraging, and we've had some really good success with ramping up home delivery with our QSR brands, particularly in Botswana, where we're predominantly company stores, but also in markets like Ethiopia, which is licensed, Kenya, where we're driving company stores, and Nigeria, where we're also driving company stores in Sudan, where we have, up until a few weeks ago, where the political unrest has occurred, we've been seeing really good progress.
We've now started to adopt home delivery in Angola for Debonairs Pizza. In terms of the business, there's a lot of activity going on and the learnings from SA are being rolled out across Africa and returned where we need to get learnings from Africa. In terms of the local supply chains, the COVID disruptions globally are putting pressure on and we're really having to strengthen those local supply chains to avoid disruption and of course to support localization, which is not just a drive in the SA context by our own government, but also governments in other countries. In the U.K. space, I mean, it's been a fairly easy period relative to last year.
I mean, the team has really still had some headwinds, but relative to the prior period, it was a lot better. As sit-down came back earlier than we've experienced, and of course, everything dropped in mid-July. As we were kind of exiting our hard lockdown and going to civil unrest, the U.K. was opening. Sort of tale of two different tales there. Delivery continues to grow. There are supply chain disruptions which we are feeling. What you see in the press is not unique and we are feeling it. I would like to say I think the team has navigated pretty well, so you know, thanks to Chris and Jackie there who've been really doing a great job.
you know, you can only control what you can control. We haven't opened any restaurants in the U.K. you know, again, I'm mindful of the bounce back, but I mean, you know, sales are important in our business. They're the lifeblood, and also proud to say that what we sell, people put in their mouths. you know, people will vote with their wallets. Now, this slide is really reflecting the bounce back, and I'm gonna sort of unpack it a bit. There's a slight nuance to this and maybe previous communication that we have made sure that we've excluded tashas out of here. If you remember, tashas was sold at the end of July last year. this is completely excluding that number.
Hence the strong bounce in Signature Brands, both at system-wide and like-for-like, is the existing portfolio. It's logical that the portfolio was heavily impacted last year, so that bounce is understandable. The Leading Brands bounce, if you remember, Leading Brands got quite a strong momentum coming out of the hard lockdown last year. Come May, there was a little bit more momentum, so that bounce is logical, that it wouldn't be as high. We're very comfortable with that bounce. Again, the revenue recovery has been led by QSR. Casual dining is still lagging somewhat, and is not necessarily seeing those levels of recovery, at one point or another. We're coming out of half year, we're definitely seeing a different trend.
Remember the period, August. End of August feels a long time away now, but the trends were very different to what we're experiencing. The like-for-like in the SA context for Leading Brands and Signature Brands is 75.6%, I think is a pleasing number. And we continue to be comfortable about our recovery, but the numbers are flattering versus what we're coming out of. In the AME space, if you remember last year, there's clearly a currency translation in there, but the impact on Africa wasn't as strong last year. There was a setback, but nothing like in the SA context, so hence the recovery is not as strong. We're really comfortable with that picture.
We think that the core business has gone through strong revenue recovery at restaurant level. That's not all translating into revenue recovery at the back end because of the royalty breaks, but we're comfortable that that will come through fairly soon. I think this creates a much better picture of the reality, though, in terms of where we are across provinces. I've stripped out Leading Brands here because it really does represent the national picture across the SA context. You know, Signature Brands tends to be quite concentrated, particularly in Gauteng, KZN and Cape Province. This really gives you a little bit of a better picture of our recovery. Again, you know, saying that casual dining would be lagging this and QSR would be leading these numbers.
Again, I think if you look at some of the challenges we've had, we spoke about the Western Cape last time, you know, I'm glad to see that has bounced back because it was more suppressed. But we are seeing some provincial nuances there. What I am encouraged about is seeing there's starting to be a bit of a gap building between like-for-like and system wide, which reflects some of the new store activity having a positive impact. We're not quite there yet. You'd like to see a nice clear daylight between those bands, but we are seeing some positive movement there, which is comfortable. We're encouraged about some of the recoveries that we're seeing in some provinces, and there's some lagging in that bounce back.
More importantly, I think is to really give you a sense of the recovery. This is just the bounce, but the recovery versus F20, which is the 2019 year, is really the reality that we all face, and probably of all the slides we're gonna show you today, this is the reality that we are working on every day. You know, we're not focused on how good it was to bounce back from last year. We've got our heads down, working, understanding what the base was pre-COVID, and this is what the teams are focused on. If you take the same perspective around Leading Brands, and you take it from a provincial perspective, you know, the flat line there is would be a recovery to 2019 levels or H-twenty levels. Not a lot of provinces have bounced back.
Limpopo, which you saw, that bounce has pushed us beyond where we were. I mean, clearly from an inflationary perspective, we are still be flat there. We're very close on Mpumalanga, which has been nice, but you can see the effect of tourism, example, on the Western Cape. We're just not back at that level of recovery that we would like to be for those. This is what we're working hard at. I'm comfortable that as we enter H2 that this gap will close and continue to close, but that's what we're looking at every day in terms of the measurement. That's how franchisees will be running their businesses and making sure that the cost base has been brought down to try and offset that drop.
In terms of the new store openings, again, you know, I'm not gonna dwell on this too much, but 69 stores has been offset by some closures, the 31. Of course, that was a trend pre-COVID. Most of that would relate to macro factors. There probably are some COVID fatigue stores that are finding it difficult that are in that number. It is really spread across the brand portfolio, so I'm quite comfortable to say that we're not sitting with a concentrated problem. The spread is generally quite broad across the landscape. We continue to make progress. We're comfortable the estate is in good shape relative to the COVID trading environment. We
Our pre-COVID momentum is there, and I'm very happy to see that the revamp stores are really starting to climb. We had a real doldrums last year with revamps. I mean, we wouldn't expect any franchisee to make that decision unless they were sure about it in COVID. Some were, but I think that momentum is starting to build and people are starting to see a confidence around their businesses. I'm gonna drill down a little bit more into the back end of the business now. In our world, we really talk about the back end in service of the front end. From a supply chain perspective, you know, we've had a fairly good time in terms of the recovery, and that's really been driven by the front-end recovery.
Manufacturing has really improved significantly at over 60%. The food inflation has started to come through. That's certainly not in the interim. In this space, it's starting to peak towards the end of the period. We started to really experience in June, July, that inflation starting to come through. Increased shipping costs, as you would hear from other companies, is a problem, and we're all facing it. We've continued to put CapEx into the manufacturing business. We held back last year. The bulk of that CapEx, it does look like a high number, but 90% of it has actually gone into our three JV businesses. I'll talk about that just now.
As a snapshot, if you talk about the supply chain business and having looked at manufacturing, you can see that balance is across the board. You know, at top line, at operating profit and the margins coming back, and that CapEx spend in manufacturing higher than certainly the other two. Retail is a very CapEx-light business because the product is manufactured in manufacturing and delivered by logistics, and our cost of going to market is built into the product. But I'm very pleased that snapshot, it reflects the performance of the business. We're showing some very good recovery, as Lebo highlighted there. Getting those operating margins back to historical levels. You know, logistics took a real setback with the civil unrest, particularly in KZN.
There's some of that baked into those numbers. Apologies. All right. From a supply chain perspective on manufacturing, at a 62% recovery in our own plants, we've had a really good recovery. Some of those plants that are showing much higher performance, such as the bakery and the ice cream plant, can be deceiving, as if they were shut down for longer last year. The sales mix and the menus had quite a dramatic impact. In fact, our bakery, we outsourced production for a period post-COVID last year because we wouldn't have been efficient to reopen the bakery with smaller volumes. Hence the bounce is actually a lot higher. It's quite deceiving.
I think in general, the bounce is where you'd expect it to be, and that throughput from the front end is coming through the back end. In terms of our joint venture plants, as well, similar kind of bounce back. Again, Central Kitchen and TruBev are plants that were closed for longer, and of course, are more exposed to Signature Brands or to the broader industry. TruBev does supply other partners. So that recovery is slightly better because of a tougher time last year. Our three battleship plants there being Cater Chain, Coffee Company, and Cheese Company bounced back. They've all had CapEx put into them. So Cater Chain has invested quite heavily over the six months in a new bacon line.
Coffee Company's actually relocated into a new facility and really got more efficient opportunities. That happened at the end of the period, so again, capital has gone in there. The Cheese Company brought on a new line at the beginning of the financial year and has had around ZAR 12 million invested just in that plant. The 90% of the ZAR 27 million is spread across those three plants. Again, some of that is CapEx that we held back last year, and we felt comfortable to do it this year. In terms of logistics, again, the business has bounced back strongly. Case volumes are up as you would expect, you know, as consumers return to shops. We're making a lot of progress on our fleet mix. We're having to adapt it because we're not at full capacity yet.
We still got a fleet that was designed differently, so we're struggling to get truck utilization right, but that is coming. And of course, we now are becoming more and more automated, and I think COVID has accelerated that. From a business continuity plans perspective, it's something you talk about a lot, and it's hypothetical until it actually happens. I'm really wanna just say thank you to the team for what they did in terms of the business continuity plan. It was tested to the full in KZN, and we lost the operation for three weeks, and we managed to service the market. I think that is really a true test of a business continuity plan. Our numbers in logistics look very flattering. Again, that bounce back.
The Gauteng number is particularly flattering, but if you think about the change of the Mpumalanga DC scale down to a cross-dock depot, those revenue numbers now filter through Gauteng. The Gauteng number is inflated by Mpumalanga coming out of there. We only have the five full DCs now, and then we obviously have cross-dock facilities servicing Limpopo and Mpumalanga out of Gauteng. Limpopo was always there, but the Mpumalanga DC was downscaled and those numbers brought through. Exports, as I said to you, spoke about the localization of supply chains in Africa and the recovery. We are finding exports a little bit harder, given some of the restrictions, but also the localization. All right, I think this is quite important.
We talk about Project Decade a lot, and I think at your end we sort of relegated the slide because we were in a dormant phase. For those of you who follow us would understand where we've been with Project Decade, which is the evolution of our logistics network. I think what's important to highlight here in the next steps in the future is that from an investor perspective, we are in a position where we would like to consolidate our Midrand campus. To do that, we will likely be stepping in to potentially be an investor in the property to facilitate the development. That is going to materialize itself in the second half of the year, and I think that that's important. It's not something to be concerned about.
You know, this is not a change in strategy for us to become a property owner. We need to facilitate this development to manage our capacity. We've been talking about it for a long, long time, so we've been communicating clearly to the market. As you would understand, that leases sit on the balance sheet anyway now with IFRS 16, so this is not anything to be concerned about. There will be a potential change in the numbers, and there is no transaction done yet. I'm communicating early, so that the market understands where we're heading with Project Decade and what we need to do to control our own environment.
We have an opportunity to potentially acquire our existing campus and tag onto adjacent campuses or properties to form a bigger campus, and we will be able to do that with a view of either developing or finding a developer to do that. Our existing landlord, you know, is not desirous of developing it themselves, and we understand their position. It is a related party transaction, so one would need to be very cautious, and we will communicate clearly to the market in line with the JSE requirements. Then we, you know, continue to then want to potentially relocate our frozen facility here. We also need to find a new KZN distribution center, which has nothing to do with the civil unrest.
It has everything to do with our capacity plan, and if you go back to look at Project Decade presentations, you will see that in the slides. Then we need to, as the Eastern Cape expands, look at a cross-dock facility in Mthatha. In terms of retail, which I showed you up front, is an integral part of the supply chain. We're really getting momentum there. Not as fast as I would like, but we're doing the right things, and we're taking more products to market. In the period, we launched two Mugg & Bean salad dressings, which are going through listings and getting on shelf currently, as well as the Steers rib burger patty, which is famous in store and is now available in retail.
We are finding, of course, those inflationary pressures are starting to push through, and are going to find their way onto the retail shelf unfortunately. Again, a nice bounce back. I wanted to just give you a little bit of detail, and again, probably providing you this insight because of COVID. As we go on the retail journey, you can see sales levels come in and out how we get constrained. We're probably a little bit baffled ourselves on the June performance, but if you think about the hard lockdown, and what was happening, and then moving into the uncertainty of when we were gonna go out of that, we think that that's creating a destocking and restocking situation in retail.
Overall a 26% growth on last year, which if you think about H1 last year, I mean, retail, you know, was the gig in town, and people were really buying all the necessities via supermarkets. We think that we are doing a good job here in terms of the strategy that we're trying to apply. We've got a long way to go, and we're certainly not gonna pat ourselves on the back yet. Really trying to close out now and move into Q&A. I've got a few minutes to give you your promised 10 minutes to just give you a sense of the outlook and where we're heading in H2.
Unfortunately, I'd like to be a lot more upbeat around the outlook, but I think we all understand as South Africans and then also trading on the African continent, that we are in a very tough and unpredictable trading environment. You know, it doesn't matter who you talk to, but anybody who's got a scientific credential behind their name is very comfortable that there's likely to be a fourth wave. What the impact of that is probably unknown, and that is very difficult for us because our peak, as you would know, is the December/January period. Last year we were heavily affected, so we're really hoping for a nice bounce. The vaccination rate slowing down is not encouraging. But we will manage it. We're not, you know, overly concerned about it.
We don't anticipate that it will be as severe as last year, and we're planning for a proper peak, and we'll work around that. You know, a fourth wave we would all like to prevent. A fourth wave in January would probably be more beneficial for us as a business, but it's certainly not beneficial anyway for that to happen. We would rather work on prevention, and we're doing as much as we can to encourage vaccination. If you see that slide or the one on the right of the slide is The Restaurant Collective, which is a new industry body, which I'm proud to say, you know, we've been part of supporting. Kudos to Ocean Basket and to Grace Harding for driving that process.
As a restaurant industry, we really are driving hard on the vaccinations, and as a business internally, we are doing that too. Avoiding the fourth wave is really the primary objective, but one has to be realistic. We plan to open new restaurants in H2, so we continue with that. All things being equal, we'll open 42. The inflation we think is gonna continue to come through. There is some tailwind for us on that, but we're seeing it across all categories and our supply chain team is managing that risk very well currently. It does land up translating into more expensive product on shelf or more expensive product on the menu. We will continue to invest in technology, which is not something that, I suppose, as a restaurant industry we're always familiar with.
We continue to enhance our own delivery capabilities through investment, strengthen those partnerships with third-party platforms. Of course, you know, you can't only rely on delivery because that's only a part of the business. The old-fashioned counter or sit-down transaction is still the key part of the business, and we continue to improve that with self-service terminals and app ordering, which we've invested in. In H2, we really wanna put a strong push, and that does predominantly relate to Mugg & Bean and to Wimpy. From my perspective, I think opportunity to close out now and to move into questions. Hopefully we've given you enough information to ask us some informed questions. I'm gonna hand over to Ntando and let him fire the questions at myself, Lebo and Dion.
Thanks, Darren. Yes, a special welcome to Dion. We'll begin to take questions. I'll just dive straight into it. The first question comes from Douglas. Okay. Thanks, Darren. Again, a special welcome to Lebo this second. We'll be glad to know that we do have a couple of questions for you on this segment. We'll deep dive into it. The first one comes from Douglas from Nedbank.
You mentioned some of the logistics challenges caused by shipping constraints and bottlenecks. Are you seeing bottlenecks developing among vendors or suppliers, and does this materially affect your business from an inflation point of view as well as on general availability of inputs?"
Yeah, good question, Douglas. There's, I mean, there's obviously a lot of noise around this. I'd like to say that we're probably less affected than what I'm seeing happening out there, but I mean, certainly the procurement team are concerned around it. I think in the SA context, you do have some unique nuances. I mean, as a good example, the way the team explained to me the other day is that, you know, we used to be able to route coffee directly from Brazil to Durban or Cape Town, and that's not possible anymore. Now, that's because those routes have probably been taken off. They're less viable in managing that capacity. Those are the kind of challenges, and that will add cost.
In terms of the overall cost, I mean, it's not material, it's driving an inflationary part of that cost. It's not as if your cost of coffee is doubling, but the cost of shipping it in, which is a relatively small cost, is doubling, and that will add to that pressure. Yeah, we're certainly seeing the pressures. Right now, as we speak, there's nothing that we're sitting saying our business is gonna come to a grinding halt because of it. We're able to mitigate any risk we're facing as we speak. That can change and we're working with it. I think we're probably less affected than some other industries. We also, as a business, not overly exposed to importing.
Where we found the biggest challenge, and we've also managed to mitigate it, has been around the resupplying of equipment for the looted restaurants. We've worked well with suppliers. A lot of that equipment comes out of the U.S., and the parts come out of the U.S., but we've managed to try and procure alternatives, or stock that was sitting in other countries. Again, there are potentially some blockages there, but we think we're okay.
Thanks, Darren. The next question is from David, from Sapphire Street from London.
Could you give us a sense of capacity utilization in the supply chain business? Where does this fit in terms of your expectations of a steady state level in calendar 2022?
Yeah. I mean, each plant is different. David, it's not quite as simple as saying if I gave you an overall number. Right now, because of the drop in volumes, we are literally running under our capacity at almost all plants. Our cheese plant is probably less so in terms of where we're at, but that's why we've been investing the CapEx that we spoke about. Capacity is not something that concerns me. I would be concerned about the fact that we are not there yet. I mean, if you think about the bounce back next year, we'll be back to normal. I would be more worried about the logistics capacity right now in that the truck utilization is not where it needs to be.
From a manufacturing perspective, each plant has its own capacity. Of course, the shared costs of those effectively your corporate costs, those costs are elevated slightly this period due to higher audit fee as well that came through with the transition. Yeah, there's various, but there is a disclosure in there. Of course, any development costs on group enterprise development or, you know, acquisitions, et cetera, would be in there. I think Dion wants to add to what I've got to say.
Yeah. Just to unpack it a little bit more, as you would understand, actually, it was not business as usual. We incurred costs from insurance perspective, from COVID as well, certain professional fees, also from a group perspective, and there was quite a few costs relating to legal matters that we had to settle. Most of these costs are once-off costs, which we would not expect to repeat in the second half. The only thing around COVID, what may impact there may be once-off costs relating to that going forward.
Yeah. I think just to add is that last year's number was suppressed quite a lot given the salary cuts, et cetera, that we put through, which were quite aggressive. If you think about the April to August period, it was quite aggressive. We had costs that were not sustainable in terms of cutting in there. There was some salary cutting this year, not to the same extent as in the sort of height of COVID.
Yeah. Thanks. The next question comes from Patrice from Visio.
Good day. This one starts with a compliment, which is very much welcome. Congratulations on the results and wishing you well in the group.
Thank you, Patrice.
Can you provide some color on riots' financial impact in each division and overall, and are operations largely restored?
Yeah, not easy, but I'll try and provide some color. The operations are largely restored except at the 50 restaurants that I spoke about. In terms of our ability to service those markets, within three weeks, we had our own capabilities back up and running. It's the 50 restaurants that are finding it difficult to reopen, and those are pretty much out of our control. They relate to landlords. In terms of cost, I mean, there is obviously cost that has been spent that is in the cost primarily related to logistics and to those marketing breaks and royalty breaks. But there is some mitigation of the insurance claim.
There's no upside in there that we've said, "Well, we're gonna get money back." We've mitigated the insurance claim down to 80%, so there's 20% that we've actually expensed in those numbers. And that's probably around ZAR 5 million. There's ZAR 5 million, which potentially, if we got paid out 100% of our claim, would come back. And I think that's fairly understandable. In terms of any potential BI claim, business interruption claim, we haven't factored that in. That, you know, that's not in our control, and that's unlikely to probably come in H2. Those are the real ccsts. I mean, the breaks that have gone through is quite difficult because, you know, if the revenue is naught, there's no break either.
That's quite difficult, and the ZAR 20 million I spoke about is bridging finance. It's not money that we've expensed. We do hope to recover the investment in the insurance portal through a claims process, which we will get back. I've given you a kind of fairly long-winded answer, Patrice. Is that there's nothing in there that's material. Of course, there are costs, you know, that we've had to incur, which we'll bounce back. Everything, the business is back to normal other than those 30 restaurants.
Thanks, Darren. I'm quite conscious of time, but I'll take a question from Zintle Anchor from Anchor Capital.
What caused operating profit margin decline in the U.K.? Do you expect it to recover to historical levels again?
Yes, we do. We've been doing a little bit of work there. Obviously, it's not business as usual with COVID, because you still have COVID in the early part. We've also been doing a little bit of work there on maybe the future, so spending a little bit of money in the cost base. I think it's just really about managing expenses and timing. There's nothing fundamental that's changed in the U.K. that margin can't restore itself. I mean, given that it's a smaller business and you've got the exchange rate effects, it's just really, I suppose, a bit of swings and roundabouts. You know, when you spend some money on a project, it's gonna show in that margin.
Yeah. Thanks. I think it allow me to take one more question. There's a question here from Peter, from Measure Market.
To what extent does the company have appetite for acquisitions? If so, what assets and markets are likely to be of interest?
Yeah. Look, we've never taken our eye off potential acquisitions. I mean, obviously, we need to be very cautious around the balance sheets. Absolutely. We continue to be clear about what it is that we understand and what we're good at. From our perspective, you know, we'll be very comfortable looking at brands in the SA context or in selected markets, particularly in Africa. We'd be very clear whether those sit in the food service space or in the direct retail space. We wouldn't be uncomfortable potentially looking at manufacturing, provided that we could send our own volume into that manufacturing facility, whether that be, you know, retail or food service. A very narrow lens, but we continue to look. We're not shy.
We do know that we would need to be very clear, post the GBK disappointment, that we're very clear to the market. We're not of the view that we're bulletproof, and we would need to bring that. We're very clear on what we're looking for, and we continue to look. Yes, we have appetite.
Okay. Thanks, Darren Hele. Obviously in the interest of time, and thanks to you, Michael, for the questions, and thanks to Darren Hele and Dion.
Thank you, Ntando.
Thanks, Ntando. Appreciate it. If I could just close out, and Ntando, really just to thank everybody for attending. We really do appreciate it, giving up your time, particularly to the marketplace. The questions were very important to me because I think that they give us a sense of how you feel about the business. A thank you to a few people, so particularly KPMG, Nick, Noku, Yusuf for the work that you've done, to our bankers in Absa Bank for the support through a very difficult period. You can imagine how they felt through the civil unrest. To our sponsors, Standard Bank, and to the franchise, you know, Famous Brands team, the franchising teams, the franchise partners, the supply chain teams, everybody in the business, thank you very much.
To the board, my executive colleagues for the personal support, and then to Celeste, GMF, and Yolandi for making all of this happen. You know, it's easy to get the results together, but you've got to get them to the market. Thank you to everybody, and appreciate the support.