Welcome everybody, on behalf of myself and Lebo, to our end August 2020 financial results presentation, or for the analysts who like things codified, the FY 2021 H1 presentation. I hope you're familiar with the two of us. If you follow us, you would be. Thank you for your interest in registering for this audio webcast and for giving up the time. Welcome, too, to the board members of Famous Brands who've dialed in, and a special welcome to all the FB family who have joined in on the webcast. Always great to have you on the webcast. I think just from our perspective, there's probably been limited improved disclosures this time around, based on limited feedback from shareholders and potential shareholders over the past six months. Interestingly, most feedback received has been really focused and biased towards the pandemic, which I suppose should be no surprise.
We know the disclosures, I suppose, are never enough, and you're always looking for more. Particularly now that there's been such a seismic shift and change in the consumer landscape. We also have to balance competitive advantage, and we'll continue to listen and adjust our disclosures as we go forward. We're going to try and split the presentation today, split the hour between 50 minutes sharing content with you and then 10 minutes questions. If we do go over on questions, we don't mind if we run over, but I'm sure some of you might have a hard close at 12 o'clock. Please would you excuse some of the narrow focus and speed through some of the information. As we know, the time focus should be on the obvious, and I suppose for you that would be COVID-19 as well as subsequent events.
It's clear in those subsequent events that we've treated Gourmet Burger Kitchen as a posterior event. Some of the usual information that we share with you has been relegated to the supplementary section, which is an ever-growing section, in line with keeping those disclosures in place. Feel free to, after the presentation, go and review that, and that will be loaded up onto our website. In terms of the agenda, which you would have on the screen in front of you, I'll be handling section one and two. Lebo will then handle section three. I will come back for section four and five, and together we will handle questions, and Ntando will be pulling those questions off and putting them to us.
I would also like to just remind you and ask you to post questions if you feel you would like to, and I understand that on your screen, on the left-hand side, there is a Questions tab where you can ask questions, and those will be read out at the end of the presentation. I think just to start off with, it's important to really, I think, get COVID-19 out of the way, but it obviously underlies the whole theme of the discussion today. We thought we'd try and share a few bits of information that may make it easier. I think for most South Africans in the audience, you would probably be very familiar with this slide.
What we've tried to do is just lay out for you the impact over a timeline and on different parts of the business, being around the brands part of the business supply chain, and then retail. As you see on the right there, retail pretty much unaffected, having essential service provider status through the period. The real impact and tough part has been around the March and April impact. If you take the revenue loss in the SA context of around ZAR 600 million in the first part of the year, being March and April, it's significant. That's, I think, where we've had to recover from a slow recovery in May. Again, if you look here, in the other markets that are key, U.K. and Botswana, differing levels of activity.
Probably far more stable in terms of those levels. In Botswana, one can commend being well managed, and certainly we saw a different perspective coming out of there, as we never had a total cut-off of revenue at any point in time. Although it's slow, that lockdown where there was no revenue makes a significant difference. I suppose really just to be focusing on the obvious, I suppose it's important to declare what we were focused on during the past six months and what were the risk mitigating measures that we took. I suppose obvious, but maybe not so obvious if you're thinking back in terms of what the pandemic was like at the time, but focus on safety of employees and customers and, in our business particularly, support for our franchise network, as well as at the same time trying to rightsize operations.
I suppose the obvious part that every other business would be struggling with was reducing costs and preserving cash, particularly in a lockdown. It was a very broad focus from our perspective, but again, I think some nuances to our business that are quite unique versus others. In terms of what were the kind of activities in those risk mitigating measures, there's 10 real focus areas in front of you there that were the areas of focus.
For me, there's probably six that are important, which should be bolded on your screen, and those really relate to, I suppose, the financial aspects, and this is a financial presentation, in terms of what were we trying to do to try and mitigate the financial impacts of the pandemic on the basis that you were still going to be running your business properly and taking care of all of the regulations.
Again, some obvious issues there, but most of those were around trying to preserve cash, but bring your costs down, and access government schemes such as Unemployment Insurance Fund, which were, I suppose, helpful, but very challenging in terms of the nature of what they had on offer. It's important to, I think, point out the last point there, which is really quite unique in the South African context, was around negotiations with the landlords to secure help for franchise partners. I cannot stress how important that relationship with landlords is in terms of the recovery and how important it has been in terms of the recovery thus far. I'd like to think that there's been good work done on that side, and I think that landlords have also been very mature and responsible in the South African context.
Having experienced it in other markets where it was an absolute stonewall and decisions have to get made around that, I think the impacts on the business are quite significant, the U.K. being a good example of a very different approach by landlords. Very thankful to the maturity of landlords, and we just hope that that process over H2 continues to be so robust. This is a slide we did show at our year-end presentation at the end of May. I think it's really just extending that over the phases of the life cycle of the pandemic. Just reiterating that sharp decline from March and April and really a lot of damage done then, and then the steady recovery as we've come out of it. The slide in front of you is around our Leading Brands specifically.
You can see there that the quick service restaurants were not as badly affected as casual dining. I mean, everything was affected in April. That recovery has been slow and steady, slower on casual dining, as one can see on the slide. We are very comfortable around that recovery. I think it's been acceptable under the circumstances and we've been coping. The gap between casual dining and quick service is closing. We are not seeing anything as being back to 100% right now. I think that is important. That graph doesn't extend into September and October. Again, the recovery has continued. We can't say right now that anything is back to 100% on a consistent basis. Lots of different trends out there. Have we got one brand that's back to 100% consistently? No.
I think we are hoping, as we move towards the end of the year, that that will continue to get us back up there and then hit the 100% mark. On Signature Brands, the impact has been far more pronounced than in Leading Brands. Again, the mixture of sites has also changed significantly. As an example, in that portfolio, you have our hospital brands, which have probably been the worst affected across the network because of the tight restrictions in those trading environments. Very much a broad portfolio, but you can see there the numbers show the significant difference between Signature Brands and Leading Brands. The trend in terms of recovery is similar in that the upward tick is there.
I think to try and put COVID behind us, and again, it's going to be a theme and it comes through in all of the presentation, we try and really focus on the year as a whole and the financial impacts of that. Revenue being down 48%, I think, again, needs to be seen in the context because it's really a significant drop, but the dire impact of the early parts of the lockdown and then clawing back over that period of time should be put into context because the 48% is on the road to recovery. Lebo's going to unpack those numbers a little bit more in her presentation, so I'm not going to dwell too much on things like the operating loss, which is significant and certainly not something we're very proud to present.
In the context of where we are, I think it's important to understand it. As well as the decision in terms of capital allocation to hold back dividend, a little bit more on that later. In terms of the group, I think it's just important to just give a little bit of an overview of where we are. I think for me, on that slide, the first point is important because our recovery and performance is directly linked to the progression of lockdown levels, and I think that's important to note. As well, take some positive out of that in terms of the way the business is behaving, is in line with that. I mean, of course, we weren't bulletproof. We didn't have a business model that could circumvent the lockdowns as some very few businesses had, but there were businesses that had that ability.
We didn't. I suppose all of this is history now, given that we are at level one. I think important to highlight the last point on that slide, where the health and hygiene protocols and instilling trust for consumers and our employees is a critical part of what we have done and continue to do, because ultimately, people want to feel safe in your restaurants. Different trends happening within the market there, and we're certainly seeing a change in the performance of the network, and some areas are performing better than others, but starting to see recovery across the board. I continue on that theme on the next slide. We believe we have a resilient business model, and our differentiated brand portfolio has certainly enabled the business to flex that risk-adjusted activity.
Lebo will talk more about the financial management side of it, but the way we manage cash has been important. Really some simple things, such as brand innovation and trading formats, really being able to take consumer offerings to the customer, like curbside delivery, as an example, ramping up the technology we had available to ourselves. Interestingly, the menu rationalization was quite an interesting phenomenon that came through, that was really consumer-led, which was really nice, managed to make businesses more manageable through that process. If you look at the geographical aspects of our business, I think, again, important that in terms of South Africa, we manage brands we like to be number one or number two in their categories.
Leading Brands has really had a much better time through this very tough period. They have continued to be the main driver of growth in our business, and continue to be something that we want to invest in and certainly prioritize investment. As I said earlier, quick service have outperformed casual dining, and that was really just as a result of the lockdown restrictions and the way that they played out. There's been good momentum across the board, although casual dining is still lagging behind. Signature Brands, particularly, as I said, was very hard hit by the trading conditions, but there's been work done there. The portfolio remains under review.
We have work to do there in really simplifying the business and making sure that the limited resources that we have are put into the right things, hence why you've seen some sale activity as well as rationalization activity in that portfolio, even through the pandemic. In terms of our supply chain business, which has really been a phenomenal performance from the team in this particular time, battling to adapt to a really volatile environment. Bullwhip is our new term in the business because everywhere you turn, there's a graph that's really just showing how wrong you can get the forecasting because of the flick on switch and flick off situation regarding the lockdowns. CapEx has been limited in this particular environment, and we also try to focus on minimizing food wastage.
As you can imagine, the lockdown caused quite significant problems with food that needed to be moved and not wasted. In terms of our Acquisitions & Expansions business, it is predominantly a quick service model that we operate. Our markets performed relatively well, particularly when compared to South Africa. Botswana was a leading light in that. Generally, the franchise network proved fairly resilient under very tough circumstances. Our Wimpy U.K. business jumped out as really being a business that was able to be resilient. The exchange rate certainly has favored us. The team, even in pound terms, really did a great job in able to keep the network running through a tough period of time, thinking innovatively and capitalizing on the delivery opportunity.
GBK, there'll be a lot said about GBK, and there has been a lot said, and I'm sure it will continue to be something that we are leveraged with over time. I think we're through the difficult period. Unfortunately, we had a two-year remedial program, which was really looking positive. I started March this year, at the beginning of our year, feeling very optimistic about what we had done and how we were going to tackle the business, and I think we were all very excited about it. The lockdown has really put huge pressure on that business and led us to make some really tough decisions. Ultimately for the group, the ZAR 1.6 billion impairment being the most difficult decision from our perspective.
In the U.K., the entering into the insolvency area was very difficult, and the group is no longer part of the Famous Brands group. As a creditor, we'll continue to pursue what rights we have in terms of the recovery, but for the financial results that you're seeing, we are assuming a null position. Lebo will talk a little bit more about that, and I'm sure you may have questions around GBK. In terms of the overall business capability, our focus really has been around putting in measures that restructure business units, focus on re-engineering the cost base, and in our own side, reprioritizing investments to the higher return projects. We believe that will continue to deliver benefits. It's not something that was started as a consequence of COVID.
We are confident that the track we were on enabled us to get through COVID a little bit easier than had we had no plan. We are feeling relatively confident about our business capability. I'm going to hand over to Lebo to try and unpack the financial results for you, and I think that will help you to put some of my comments into context. Lebo Ntlha, over to you. Thank you.
Thank you, Darren. Good day, ladies and gentlemen. I will unpack our August 2020 interim financial results in the next seven slides, starting with salient features. The 48% decline in the group's top line and the 129% drop in operating profit sketch the shock waves that our business felt from the COVID-19 global pandemic explosion during the review period. Despite this explosion, the undeniable resilience of our business model is reflected in our closing cash position of ZAR 341 million at the end of August, which represents about 80% of our closing cash position at the end of the prior comparable period in August last year. When we tabled our February 2020 year-end results, we communicated that we had secured a ZAR 300 million contingency facility from our single lender partner, Nedbank.
I am pleased to report that the business was able to absorb the shock waves without having to tap into this facility. This is testament to the fact that the fundamentals of the business remain strong. This core strength enabled us to reset our priorities to continue to trade in the COVID-19 environment. These priorities are largely reflected in the remedial measures we implemented, which included right-sizing the business, given that we are not anticipating a complete recovery to prior year levels in the short term. While cash generated from operations during the review period, being ZAR 55 million, pales in comparison to the ZAR 573 million generated in August 2019. The result of our increased focus on working capital management provided the necessary shield to ensure relatively smooth business continuity.
The basic loss per share of ZAR 15.35, compared to the basic earnings of ZAR 1.40 last year, is mainly attributable to the ZAR 1.6 billion impairment we recognized during the review period in order to fully impair GBK's carrying amount in our books at the end of August. It is worth pausing at this stage to highlight two points in relation to GBK. One, the impairment process at interim will be adjusted in the second half of the financial year to take into account the movement in GBK's GBP-denominated carrying amount, as well as the movement in the exchange rate. The reason for this is that IFRS requires us to consolidate all our subsidiaries for as long as we have control over them.
Two, while the ZAR 1.6 billion impairment processed during the review period is a non-cash item, its significance is reflected in the notable reduction in the group's equity position at interim compared to the year-end closing position. On the positive side, the concern regarding the group being triggered into a negative equity position as a result of GBK is now behind us, given that the group's control of GBK has now ended. Moving on to basic headline earnings per share, which is not affected by impairment. The HEPS loss of ZAR 2.40 reflects the extremely severe impact that the COVID-19 pandemic had on our business. Having said that, it is important to point out that at operating profit level, the group's operating profit, excluding GBK's significant operating loss of ZAR 120 million, would have been positive.
The sharp increase in our gearing level, both with and without IFRS 16 liabilities, is mainly attributable to the GBK impairment. There is an idiom in Setswana, which when translated, means, "Ask me about where I have been and not where I'm going, as I cannot tell what the future will bring." When used in context, this idiom rings true as it refers to what we have been through and how COVID-19 has forced a reset of priorities. Pre-COVID, we were on our way to restoring our track record of paying dividends as part of our capital allocation considerations. While one cannot tell with certainty what the future will bring, what the COVID-19 pandemic highlighted was the importance of having a business model such as ours that can be flexed to resiliently respond to unforeseen challenges.
In order to further strengthen this flexibility, the board has considered it prudent to preserve cash and not declare a dividend for the review period. Also worth noting in this context, and as set out in our subsequent events, note 17 of our condensed consolidated financial statement, is that a new debt covenant has been introduced in our refinanced debt facility. The new covenant is a liquidity covenant, which requires that the group holds a minimum of ZAR 250 million of unutilized facilities under the revolving credit facility and the general banking facility, plus any cash balances within the SA Group that are freely available for immediate use, excluding cash balances belonging to our joint venture and associate companies. This covenant is required to remain in place until the SA Group's Net Debt to EBITDA ratio is below two and a half times for two consecutive measurement periods.
We will unpack the revenue and operating profit lines when focusing on the segmental performance in the next two slides. A breakdown of our net finance cost of ZAR 127 million is provided in note 11 of our condensed consolidated financial statements, which are available on our website. In note 11, you will notice a ZAR 35 million reduction in our bank debt-related finance costs compared to prior. This results from the phasing de-gearing of the balance sheet over time, as well as favorable interest rates. You may recall that the debt structure that was in place as at 31 August 2020 had proactively been concluded in March 2020, before the harsh realities of COVID-19 hit home.
I am pleased to report that we were able to proactively conclude another refinance structure, which repayment profile is more suited to the current trading environment as it allows us more flexibility to preserve cash. Details of the refinance structure are set out in the subsequent events, note 17 of our condensed consolidated financial statement on page 28. Worth bearing in mind for the February 2021 year end is the ZAR 40 million cash outflow that was required in the second half of the year in order to settle the old interest rate swaps as part of concluding the refinanced debt structure. The old interest rate swaps had been entered into when interest rates were a lot higher than the recent Johannesburg Interbank Average Rate levels, which would have resulted in a significant portion of our hedging strategy being ineffective, and thus resulting in earnings volatility.
The hedging of interest rates relating to the bank debt was adopted as a strategy back in 2016 when we acquired GBK, with a hedging range of between 40% and 60% of the loan notional amount. Our hedging strategy for the new swaps is at the 60% level, and thus locks in a good portion of the current low interest rate environment. The positive ZAR 272 million tax amount mainly relates to the impairment of the GBK brand at group level. The first two columns on the left show how our top line is sliced up across our key divisions and geographies. Consistent with the prior year, just over three quarters of the group's revenue is generated from South Africa. GBK's results before going into administration will still be reflected in our group's FY 2021 year-end results.
Therefore, a reset of this top-line generation will only be fully evident in our FY 2022 results. In line with our FY 2020 year-end results, revenue related to marketing funds is now disclosed as part of our segmental report. We have kept this revenue separate from our brand's performance, as our operational practice relating to marketing funds remains that of managing the funds on a ring-fence basis in line with the Consumer Protection Act.
As previously indicated, the group's profit before interest and tax, excluding GBK, would've been positive. The negative operating margin of -7% for our SA business underscores the challenges of trading through the various lockdown levels during the review period. Our logistics business was the most severely impacted division within our SA business due to the nature of its cost structure. Corporate costs registered a positive of ZAR 1 million compared to a cost of ZAR 62 million in the comparative period.
Details of our corporate costs are set out in the segmental report of our condensed consolidated financial statement on page 14. While corporate costs were positively impacted by a favorable exchange rate as well as the profit on the disposal of tashas, corporate costs relating to corporate administration costs also resulted in a ZAR 5 million saving compared to prior year as a result of cost reduction remedial measures implemented during the review period.
Disclosures relating to the business disposal are provided in note 14 of our condensed consolidated financial statement on page 24. Wimpy U.K. continues to hold its own despite the challenges faced by the business in navigating the impact of COVID-19 in the U.K. Well done to Chris and the team for their considerable effort. Pleasingly, our Africa and Middle East business has fared the pandemic well, led by the solid performance from our JV partnership in Botswana.
Kudos to Rudolf de Wet in Botswana for the strong results he and his team delivered during the review period. The most significant change on our balance sheet during the review period is the drop in our group equity position as a result of the GBK impairment, which I discussed earlier. The next slide will help us unpack the net working capital position at the end of August relative to February 2020 year-end and August 2019. Although one typically considers working capital as a percentage of revenue, the COVID-19 impact has made this ratio less meaningful for comparison purposes. What is still meaningful, however, is to consider the actual levels of working capital, starting with inventories. Our SA stock level closed at about 75% of prior year levels.
Our operational agility and stock planning capability ensured that stock levels were managed without incurring significant stock write-offs despite the lockdown, while simultaneously ensuring that we had adequate stock to service our franchisees as the lockdown levels eased. While trade and other receivables for SA closed ZAR 40 million lower than last year, the ZAR 85 million increase from year-end to interim includes the impact of the cash flow relief we provided to our franchisees by deferring the payment of their pre-COVID-19 debt. Despite the payment deferrals, we are comfortable that our debtors' books remain in good shape. The group's trade and other payables increased from ZAR 851 million at year-end to ZAR 1 billion at the end of the period. The majority of this increase is attributable to GBK, which is not surprising given the extreme challenges that the business was faced with.
Our prudent capital allocation approach in recent years ensured that we went into the pandemic with strong cash reserves of ZAR 486 million. From this position of strength, we were able to fund our debt obligations and business operations while negotiating a revised debt structure that is more suitable for the business in the current trading environment. Warren Buffett is often quoted as saying that, "Only when the tide goes out do you discover who's been swimming naked." Well, we were found to be well-covered with a strong ZAR 341 million cash position when closing off our half year period. It also helps having a lending partner we can count on should the need arise, and we are grateful to Nedbank for their continued support in this regard.
In closing, I would like to extend a sincere thank you to my colleagues in our brands and supply chain divisions, led by Derrian Nadauld, Andrew Mundell, Philip Smith, and Jean-Paul Renouprez, for ensuring that our brands remain trusted and sought after by our customers as we embrace our new trading environment. To our franchise partners, your unwavering tenacity has been incredible. Thank you for your commitment, which underpins the many direct and indirect livelihoods you take care of. Last but not least, to our long-term shareholders, the fundamentals of the business remain strong. Famous Brands has teams at all levels of the organization who are passionate about the success of our brands and whose spirit is unbreakable. Thank you for staying the course. Your confidence in Famous Brands' value proposition is not misplaced.
I will hand back to Darren, whose leadership, I know my ex-colleagues and the broader Famous Brands team will agree, has been phenomenal in steering the business through these unprecedented times. Over to you, Darren.
Thanks, Lebo. That's very kind of you. I'm going to try and just recap now on some broader parts of the business. Starting with strategic imperatives, I think it's just important to remind you of what those real imperatives are. I suppose if you look at the slide, probably seem quite boring and obvious, I'm sure a lot of businesses are doing that right now, that is important. I suppose our business is no different in that regard. Really making sure that we right-size the business for the new environment, ultimately reducing costs, the obvious and not so obvious costs. As Lebo has really focused on around the cash side, which I think has been important from the beginning, we need to retain that balance sheet flexibility moving forward.
I'm going to spend a little bit of time just sort of unpacking the brands. I know from the analyst community, probably will want more from us than we are providing. Balancing that around competitive posture is very, very important as well from our side. In terms of our system-wide sales, I'm sure never, ever presented graphs like this, and really making it quite challenging. The numbers have been put out there previously. It wouldn't be a surprise to you. GBK, I think is obvious when one looks at the stress that we've been through and underpins that kind of number in terms of the difference in the performance, and how the business behaved through COVID-19. In saying that, I mean, the team did a phenomenal job. The impacts were significant when compared to both the South African and the African environment.
If you look at the South African environment in a little bit more detail, as I said earlier, Signature Brands really feeling the brunt of the lockdowns, and Leading Brands recovering. Interestingly, similar to our revenue drop, which typically shows you that the Leading Brands really drives the front end of the business. From an SA perspective, you'll see there nearly half of what we did in the previous year. In terms of like-for-like, which is typically a lead indicator of performance for us, there's not much difference between this and the previous slide around system-wide. Normally there's a gap. Like-for-like is typically lower percentages, that really just talks to the lack of new store activity, which came to a grinding halt at the beginning of the pandemic.
As we know, was probably starting to feel some pressure as the SA economy has been faltering, but has come to really, I wouldn't say a grinding halt, but certainly slowed down significantly. We're not anticipating a big recovery of that in H2. Retail is an area of the business that we've been focusing on and showing to you since October last year. This is a newer not newer part of the business, but a part of the business that we've provided disclosure on. The number there of 7% would probably sound disappointing to you, given what has happened in retail. I think, as I said to you, we're trying to build a base here. This is an IFRS treatment.
If you compare it to last year, we've actually had to strip out the commissions part, and the number is not quite the same. Actually, cases are actually up 6% in this environment. We have seen the benefit of the lockdown restrictions in our retail business. The Lamberts Bay Foods business, which actually isn't included in this number, cases on retail were up nearly 80%. You'll see that a little bit later. I spoke briefly about new store openings. I mean, there has been some activity, some franchisees who are committed, some who've seen opportunities, we've never seen this kind of number from us. We're not anticipating a significant difference in H2. The probably obvious question there is why open a GBK?
That was a dark kitchen through a franchise network in the U.A.E., which was committed to prior to the emergence of COVID-19. One saw that commitment through. These numbers are, I suppose, quite pleasing given the lockdown. It wasn't possible to even open stores at one stage, and some momentum building, and the mix of those stores is very consistent to what has happened in the past. Moving on to our supply chain business and logistics, which we use as an export platform as well into Africa. This division really struggled to offset fixed costs. As you can imagine, it's a half-fixed cost business, and Lebo spoke about it earlier, and the loss was significant for us.
We have tried to adjust the business quite quickly, and we think we've done a relatively good job of that, and that was a little bit fortuitous in that because we'd been embarking on Project Decade, we were able to pivot that project to go from an expansion project to a rationalization project. Most of the stock loss we saw in our business came through this division. Again, I am pleased to say that although it's a financial loss for us, it didn't result in food wastage. That stock was able to be donated. Again, it's been a tough year all around for logistics. As you can see on that slide, the 46% decline was pretty much spread across the board. These are not provincial provinces as per South Africa, but largely reflect that. Our six centers and then exports.
Again, it's interesting to see how the business behaved and quite consistently through this. Mpumalanga being slightly less affected than others, and exports performing in line with the Africa and Middle East performance. A nice reflection, but a very dire number. As I said earlier, and I repeat that a lot of that damage was done in March and April with the recovery consistently coming through as the performance of the brands has come through. We're very pleased with the recovery, but you're never going to make up for five weeks of lockdown. In terms of logistics, we did provide this kind of disclosure at your end to try and understand the moving parts. This becomes more pertinent because a lot of the moving parts have been around restructuring, and now you've had to deal with COVID-19.
The real number that jumps out there is the volume impact, so that you can see that volume impact has translated directly into the operating loss. The moving parts are still there, they're not material. That stock write-off we spoke about is a net COVID-19 cost, which is the third bar there. A lot of area and opportunity for recovery here as volumes come back. It's not all doom and gloom, and I think the business behaved very well and in line with what you'd expect through such a hit in terms of closure. On our manufacturing side, the business behaved slightly differently and was really probably a lot more agile than logistics was able to be in terms of reducing its cost.
Both businesses were agile in terms of the consumer side, but the team really managed to bring down inventory and adapt to small batch manufacturing, which is really a testament to the management team's embrace of what was happening. No material stock write-offs there. We did close the small ice cream plant we had in KZN, and again, that was a decision that could be made quite quickly because it was something that the team had the analytics on and had been thinking of. It wasn't knee-jerk reaction, but used the opportunity to make the decision prior to when we would have done it. We're going to continue to look at the opportunities in manufacturing to focus on our batch manufacturing and where we get the best returns, and the team are continually looking at those opportunities and exploring them.
Again, I think a really nice agile response from the manufacturing team. In terms of their performance, a lot more of a mixed bag than you saw on logistics. In our wholly owned plants, again, similar kind of drop-offs, but some more severe than others. As an example, the Lamberts Bay Foods, where I spoke about earlier, the retail increase there certainly offset because the business was very reliant on food services, but retail kicked in nicely and the team were very innovative and focused on that, so that reduced the loss there. It certainly didn't take it out of the loss situation. Again, the sauce and spice plant, which also provides retail, felt a softening of that. Still a really severe impact at 44% down.
In terms of our JV plants, where we have joint venture partners, quite a mixed bag in terms of results. You can see the cheese company there, which was probably the least impacted, but has also got the greatest exposure to Leading Brands and particularly to quick-service restaurant. They benefited slightly better than some others, such as coffee, which was very reliant on a sit-down cup of coffee as being a channel, which is a key channel, and the business got hurt through that process. I'm pleased to say again, all are on the path to recovery. Our retail business, which I touched on briefly, in terms of where we're at, is really this business was able to trade through COVID-19. It was really quite exciting for us.
We proved the model that we took on in October last year, the scalable direct retail distribution, even through that, it gave the retail team something to focus on, and we're building capability and capacity in that area all the time. Unfortunately, though, we had a pipeline of new products that we would like to have launched, and we still would like to hopefully bring in some of those before peak season. The pipeline has had to be delayed versus some of our ambitious plans. In terms of the second half of the year, I think it's important to really just recap for you, which I probably wouldn't typically do in a presentation around our strategy.
We have put in our documentation that we believe that our strategy that we had in place actually enabled us through COVID to really keep focused on what it is that we were doing. We didn't have to shift our strategy as a result of COVID. We don't think that we're going to have to shift it fundamentally. We've obviously had to make certain key decisions, such as we've made around GBK, which was really in line with our strategic focus. The ability of the business to respond through COVID has really been proven that our strategy is the right one. I think in terms of working within that strategy, the team have been absolutely focused. The board have been very, very supportive. Also in terms of their oversight, making sure that we don't drift from that strategy.
Of course, aligning to your strategy in tough times is probably even harder to do, but we think that there's been a great alignment. Again, not too much course correction has had to happen. We think as we emerge out of this, the strategy is going to be very, very helpful. As any business would do, we continue to review it. We've just gone through that process internally, and we feel that we're in a good space in terms of the hard yards that are going to be ahead of us in terms of the claw back out of COVID. We think that the framework that this provides is going to give us the guidance that we need to make the tough decisions, but also the right decisions.
In terms of the outlook, I think it's probably good for me to just slow down a bit here and really just talk around the outlook, because one has to be cautious not to talk too negatively, because being in tough situations doesn't always mean that the outlook is negative. Right now, we've been through a really tough time. We've emerged from it slowly, but we are not fully emerged from that. It's safe and easy to say that trading conditions are going to remain challenging in all of our markets. We are not seeing anything where there's a complete easing. Of course, some are better than others. In the South African context, we're all talking about a second wave, but one needs to make sure that we're all doing our part to prevent it.
Our sector faces unique and inherent challenges, so some sectors are probably finding it a little bit easier than we are. With a lot of things slowing down, like mass events, like sporting events, school events, and you name it, people have to eat at those events or either to and from those events, we are facing some really inherent challenges. Remain confident that as those sectors open up, that we will benefit again. The consumer behavior, and there's been lots said about this and lots written and lots of theses and lots of theories floating around, has changed during lockdown, and in our view, may become uncertain and is impacting on the restaurant landscape. We are seeing a return to normality. That new normal is probably only going to be evident in the 12- 18 months ahead of us.
I wouldn't like to take a side of saying that there's been a fundamental change in consumer behavior. I think we are watching it very carefully. We are confident that the aspects that we are seeing and the behaviors we're seeing are tending to lend more back to normal behavior. Of course, we need to be mindful, and we are ready for whatever that brings, whether it be increased delivery, whether it be online ordering, whatever those challenges will bring, we are exploring all of them and making sure that we're not caught off guard. I think given if you look at the numbers, you'll see that it's obvious that the casual dining market recovery is going to be protracted, and certainly, we're expecting a higher attrition rate.
We haven't necessarily seen that right now, and we think that the market has recovered and we probably think we're recovering ahead of the market, but we're all in uncertain times. We have no formula that says that we're going to be better than anybody else because when you're in a lockdown, you're all the same. Casual dining is definitely going to take longer, and our consumer studies are telling us that, but it will recover. I think it's very difficult to take a view over the next three months. I mean, this time we would normally be very excited about peak season. We would be planning, and we would have a lot of certainty around the decisions that we're making. Right now, we're doing the same. We are planning for more eventualities. We are planning for a peak season.
The trends that will emerge out of Black Friday, which has certainly become notable on the calendar, and peak holiday seasons are not a guarantee any longer. We need to be sharp on our planning this year, and I think the whole industry is going to have to be. A lot is said about lack of international tourism being substituted by local tourism, but one needs to also be cautious that that spend isn't there, and there still are lots of restrictions, and we still have social distancing measures in our restaurants that reduce capacity, and you need capacity the most at peak season. In terms of Famous Brands, I suppose you could say, really stating the obvious here, but we are of the belief that H2 will obviously perform better than H1 in the absence of a lockdown.
We are seeing the sales trends continue to tick up, particularly post the period end being the end of August. Really the last seven weeks have been positive, but I have to reiterate that we are way ahead of our expectations, but we're not consistently at 100% of where we were this time last year. We're very pleased, but we need to be cautious, and we think there will still be a continually slow ramp-up, but with social distancing measures in, there are always going to be challenges. I think we'd like to just take a bit of a pause to really just focus on a snapshot of where we are. This slide is very similar to what I shared with you at our May results, so not fundamentally different.
Important to note in terms of our capital management allocation, that the drivers are very similar, and we are doing the same thing. The last line on that block there is probably important for me. That has changed from where we were at year-end, in that our joint venture business and associate businesses are now largely self-funding. We've probably done quite a lot of work in our funding mechanisms over the last period of time and making sure that we're managing that slightly differently. Ensuring that those businesses are left with the appropriate amount of cash, and probably a lot of them in a very healthy position, but making sure that they can navigate the pandemic without parental support. The consolidation program we've been talking about for some time, and is really gaining traction through COVID, as you have to make decisions faster.
There's a lot of exits on that block. We continue to simplify the business, which is really the theme that I think is important, and really try and reduce shared service and corporate costs as well. The business units are putting in the effort and generating, and we have to make sure at the top that we have a lean, mean, and efficient structure to make sure that the cash generated flows through the business with very little corporate tax, if you want to call it that. CapEx is a critical part of our business. I think you'll see in the numbers that we've done a good job in the six months, considering that the lockdown came, there was already CapEx committed. To be honest, most of the CapEx that was spent was actually probably flow-through from last year and really spent in March.
Particularly logistics did a phenomenal job of cutting their CapEx. We think the same will be able to happen. There will be more CapEx spent in H2, but it'll be very tight when compared to FY 2020 and FY 2019. Any good business will also not just be trying to manage its challenges, but also looking to grow. We are a growth organization by nature, and we're not going to stop looking at areas to grow. Our Signature Brands portfolio, as much as had a hard time, we still believe that there are lots of avenues for opportunity and runway for us there. In terms of the Leading Brands, it's the driving force behind the business, and will continue to get the right kind of attention, and access to resources to be able to grow and gain market share.
Ultimately, we are in a fight at the front end all the time there, and we're not going to give up. The supply chain, I think you've seen our commitment to align costs as has happened through the pandemic. Africa continues to be an area of the business that we are excited about, and continue to get our hands dirty, roll up our sleeves, and make good progress. Really just continue to build a solid platform there that will become a contributor over time. I always talk about the retail business as probably the one aspect I'm the most excited about in terms of some benchmarking we've been doing there, and the opportunity to continue to expand our portfolio of brands or Leading Brands that we take to market in the retail space. Simplistically, what are we saying?
We think and we've proven now through COVID that we have a solid business model. We've got competent teams that are going to facilitate the group's recovery. They've shown that. They've tested their mettle through COVID, and we're all very thankful for that. Our diverse portfolio of brands, and our agility and ability to innovate across these brands and formats is key to driving growth, and we believe that that growth will come. We are as optimistic within the context of COVID as we've ever been around the growth opportunities of the business, and we just have to adjust to that new normal. I'm going to close there, and I will again just remind you that there will be supplementary slides to tap into. As I said, we've got 10 minutes, so we're spot on there for questions.
I'm going to ask Ntando, who's got the questions in front of him, to just randomly fire them, and we can try and tackle them as we go.
Thanks, Darren. Morning, all. I've got a couple of questions here on the web. I've got the first question is from Anthony Clark from Small Talk Daily Research. The question goes as this. First, thanks to us for the results. Then he goes and comments, "Given your Annual General Meeting and recent update narrative, in light of H1 results, cash of ZAR 341 million and a debt position of ZAR 1.5 b illion, and unused facility of ZAR 300 million, are you now able to fully rule out a cash call equity raise? In the past, you would not rule out anything at the moment." It's really around, I guess, an equity raise. Is there potential there?"
Yeah. Good question, Anthony. He's always consistent because he's always the number one question asker and asking the hard questions. Well done on the consistency. Yeah, look, I think you can never rule it out because you don't know what the pandemic is doing. As we stand right now, it's not something that's on our radar screen. It's not something that we've been talking about. In fairness, I think even at the AGM, we were probably still in the uncertain part of COVID-19. Whilst we didn't need it, one couldn't rule it out. I think technically, I can't rule it out on behalf of the board publicly, but I don't think it's something that we are worried about or considering right now.
We think that working with our bankers as we have done, looking at the various scenarios, we think we've got it right. Like any business, we are uncertain as to how COVID is going to evolve. I don't know if you want to comment, Lebo.
Darren, I think you have covered it, because the key at the moment is around our comfort from a liquidity perspective, and I'm comfortable that at the moment, based on what we know, we are fine. Certainly, one doesn't know what will happen. Will there be a second wave? You just don't know. On that basis, you can't rule it out definitely at this stage.
Yeah.
Perfect. Next question is from [Merveck Winter] from Rezco Asset Management. The question goes as this: Food retailers have clearly taken a wallet share away from QSR industry during the lockdown. How have you seen these trends progress lately? Are you getting customers back? Secondly, how do you see that dynamic playing out going forward? With the consumer under increased financial pressures, do you see consumers likely to prioritize retail food instead of casual dining or takeout?
Yeah. It's a very good question, and we did see that because we saw it in our own retail business. We are starting to see a normalization of those trends. Until, I suppose, you get back to 100% and then growth on top of that, because you really want to be growing year-on-year, although there has been no food inflation in effect from our side, and that's coming. We don't think that trend is going to be permanent. We're not seeing anything that says that the retailers are going to hold on to that share of wallet that they were given by default of the lockdown. We're relatively confident around that recovery. In terms of when we get to 100% or whatever the new normal is around the economy, that is probably more of a concern.
Again, the early days around that are saying, well, there's a lot of money that would've been spent in the economy that's not being spent around sporting events, whatever it might be, the big activities that we think are still being circulated back and we are getting the benefit of. Casual dining is going to be the benchmark for that, and that's going to be a slower recovery. If it's going to unfold, it's going to be there. Even then, those trends are quite positive. We're seeing casual dining coming back. We're seeing footfall in shopping centers coming back. I have to stress, it's not to 100% yet, so I wouldn't like to make a definitive call on it. We are watching it every day.
Perfect. Next question I got from Keith McLachlan from Alpha Wealth, and it's a two-part. The question goes as thus: Has the period led to any brands or store formats being discontinued, as you believe they'll never recover? Secondly, has this period led you to change any views to your backward integration, logistics, and kitchens? As in good times, this all add good margins, but in bad times, overheads surely add pressure.
No, Keith, we're not seeing any formats that have been kind of laid bare and become irrelevant as a result of COVID-19. Our Signature Brands portfolio, we were restructuring anyway. I think there's just been an acceleration of that around some of the probably upmarket casual dining formats. No, I wouldn't say that there's a format if you took it, whether it be a QSR or a drive-through or a fully fledged restaurant. Clearly, restaurants that have got a strong alcohol bias were affected, and of course, where you've got social distancing, so where you've got live entertainment, but we're hardly exposed to that sector now with exiting the pub category. That's not really an issue for us, so we're not too worried about that. I think in terms of the vertically integrated business model, there could be lots of debates around that.
I'm actually more optimistic around that and seeing how strategically beneficial it has been for the business in the recovery phase. I think we were able to get going quicker than others. Yes, I understand the impact of logistics, so that's the fact that we owned it, we took that loss. I can tell you that we got our business going probably a lot quicker than some, and also having direct sight of the total debtors book was advantageous coming out of this. I think it's given us a renewed focus, but I do accept that the nature of a logistics business and the lockdown was a drag on our business.
I think you need to look at it from a capital perspective, and provided that we're able to get the right returns out of those businesses in a normal environment, that should certainly answer the question, rather than, well, is it strategic? It has been a big strategic benefit having direct access to the manufacturing and supply chain business as we have had through COVID.
Next question from Nico Kricke from Signal AM. The question goes as thus: Can you provide a feel of the financial health of franchisees and their ability to sustain their operations?
Thank you. That's a question we get asked a lot. We do a lot of work within that to try and get that insight. Clearly, we have a lot more insight into their income statement health than their balance sheet health, which is always the challenge. Given our relationship with franchise partners and the close proximity to our debtors book, we would see a lot of signals coming through there which we're not. I think, however, we have been very proactive, and our revenue on the front end has been very muted because of the assistance that we've been providing franchisees. We believe that the assistance that they've given themselves, in terms of running their business better and harder through this process, the relief we've provided, the relief that landlords have provided, is probably putting them in a manageable position.
Like any other business, their health would have deteriorated. It's not a top concern of ours right now. It is a risk, and we watch it, but we think that the network is in acceptable shape right now. It's not a huge concern to us, and we are engaging with franchisees all the time. We're also not naive to know that like any other business, they have taken a hit on their own balance sheets and income statements as a result of this.
Perfect. Next question is from Talya Ginsberg from Umthombo Wealth. Where will your focus be out of S.A. going forward? Do you see more divestiture in the U.K. or perhaps expansion in Africa?
Yeah. Our only association with the U.K. remains Wimpy U.K., and that's where it will remain. There will be no focus outside of Africa. Even then, within Africa, our focus is very clear. It's clearly around areas where we have competence, and primarily West Africa and East Africa is where the current focus is, as well as obviously Southern African Development Community, which we are in. Those are the two primary areas. Anything that we look at beyond that, we'd have to have the caveat that it's probably going to be anglophone Africa rather than francophone. That's where our competence would be. Right now, there are a lot of activity around West Africa and East Africa. That's where the team is putting the energy and effort into.
All right. Next question is from David Eborall from SaltLight Capital Management. Could you kindly provide some color on how you're bringing volumes back to the system? Are you investing in price to get customers back in stores or are you maintaining GP margins and believe footfall will naturally come back over the festive season? Any thoughts on whether you've gained or lost market share over the period?
Yeah. Just on the market share issue, it's probably very difficult because like all other aspects of business, our research indicators have been thrown out completely. We typically have tracking studies that have not happened now, so we are picking that up. A little bit difficult to tell on that. Of course, with the consumer segments moving, there's no doubt there's probably some areas where we've lost share, but there's also areas where there's no activity, and we're confident there's areas we've gained share. The pricing is very interesting. We've been through a period of low inflation, so we didn't have price increases in April as we typically had. We're probably under-recovering right now, but we've had a very benign inflation environment on the food side. In our view, there's a wall of food inflation that's coming. We can see it. It's already starting.
We're going to have to probably take some price as we're doing currently and running through to probably March, April. Everyone seems to be behaving fairly sane right now in that there's a focus on GP maintenance, but there's certainly no margin to gain. I think we will be able to retain margins at franchise level, and we think that the supply chain will be able to support that. Again, there's going to be some uncertainty. We're seeing this food inflation really starting to move. Right now it's fine, but I think over the next three to four months, we're going to see some challenges.
Thanks, Darren. Next question's from Kaitlin Byrne from Prudential. What operating rate is the logistics back to in September, October, and what is the net debt excluding GBK, given you have committed to not putting any further capital in GBK? The last part is what rental reduction are your franchisees receiving in general?
Just on the rental side, I'll answer that, then Lebo can answer the GBK question. On the rental side, it varies, and it's starting to come to sort of a little bit of equilibrium, but the rentals relief has been up to 100% in lockdown months. Again, it will differ by landlord, but institutional landlords have been very mature around the process. That then, again, is also aided by the recovery. Still, there are some cases where rental relief hasn't been required, but up to 100%. We're not seeing 100% currently where there's trading, but there is an ongoing conversation, and it's a good dialogue. It's every month, and even in the current environment, we are seeing some 50% reductions around that.
On the logistics business, we're not providing disclosure on any numbers for September and October, but I've said to you that we are probably trending closer to 100% in some of those businesses. On the supply chain business, We're seeing some volatility in the month, again, logistics has picked up the retail side of it. We're probably closer to 100% in the logistics business than we are in most. Lebo, the question around the net debt to equity on GBK, do you want to answer that?
Come again with Kaitlin's question there on GBK.
The question was around what is the net debt excluding GBK, given you have committed not to putting any further capital into GBK.
I don't have that number offhand, but maybe to try and answer why Kaitlin is probably asking the question, just to remind everybody that from a covenants perspective, if that's what the concern is around, is that the debt has been ring-fenced to the SA balance sheet. We don't have any covenants that are linked to the GBK debt situation. As at interim, the numbers that we've got in there do include the lease liabilities, a significant portion of which relates to GBK. Perhaps, Kaitlin, the number to look at would be in our, we call it the long form, the consolidated financial statements. There's a table that we've included in there where we've got the gearing levels. The ZAR 574 million is the one that includes the lease liabilities. In the slides, the one that I spoke to earlier, that number excludes the lease liabilities.
Any gearing level excluding GBK will be closer to that number, the one excluding the lease liabilities.
Thanks for that, Lebo. I think you've covered the question there. I think I'll take a last one here, and this is from Chris Ready, and I guess it's for Mazi, and it's leaning on the rental reliefs. If we go into second phase of infections, what flexibility do we have on the leases, and what are your thoughts regarding the current footprint across the various offerings at the moment?
Thanks, Chris. Flexibility is an interesting word because a lease is a lease. I don't think anybody disputes that a lease written in law doesn't require the landlord to concede. However, the Disaster Management Act does provide some wiggle room, I suppose, to have a conversation. We would hope that if there's a second lockdown, that there would be the same kind of mature discussions as there has been through the first and through the second wave. We are seeing that. Landlords are obviously anxious to try and get their rental levels up, but they're also very responsible and understanding that where the feet are not there, and where there's social distancing in stores. I have to be honest, Chris, it's an ongoing conversation. It's not something where we can say, well, it's formulaic, that if you get X, you get Y.
Our teams are very engaged with our franchise partners, with those landlords all the time, working out solutions that are right. In some cases, there's not even a conversation. We're paying full rental, the franchisee is paying full rental, and everybody's happy. It's really around the situations that are stressed. Bear in mind, as an example, that we still have some sites that are closed as a result of just lack of trading. Airports as an example. It's not possible to continue to pay a rental in that environment where you're not trading. Those conversations would be around 100% or whatever it might be. There are certain venues such as theme parks or water parks where you aren't able to trade. I'm not really trying to evade the question.
I'm saying it's a very broad conversation, and it's part of the commercial running of the business, is to engage in those conversations. Thanks, Santie.
Okay. Perfect, thanks, Darren, for that.
Well, thanks very much to everybody. Just a reminder about the supplementary slides. When you do go onto the web to pick those up, we'd be grateful if you wanted to have a look through those. I think from my side, I'd like to just thank everybody at Famous Brands, especially our franchise partners, for their efforts to deliver these results. To our sponsors, Standard Bank, our funders, Nedbank, and our auditors, KPMG, again, thank you for your advice and inputs through this very difficult time. Especially to the board, who have been phenomenal through this difficult time and always accessible to us, and as well as to our own executive colleagues for their personal support.
On my side, a special thank you to our chairman, Santie, who has really led us through a challenging period and always been on the other end of a phone or a Zoom call whenever I or the team have needed him. Thank you. From my side, just a special thank you to everyone involved in getting these things together. It's never easy. To Celeste, our company secretary, GMF team, Yolandi and Delmarie, thank you for your tireless efforts behind the scenes. Thanks for listening to us, and really look forward to presenting a much better picture in much better circumstances at our full year results. Thank you very much for your time and participation.