Spur Corporation enjoying the taste for life as profits increase 8.4%
JOHANNESBURG - Spur Corporation Thursday reported an increase of 8.4 percent in group revenue to R525 million as middle income consumers came under increasing financial strain in the six months to December 2019.
Pre-tax profit grew by 19.5 percent to R161.8m, boosted by an impairment provision of R10.8m related to its black economic empowerment transaction with Grand Parade Investments, which ended in October 2019.
Headline earnings grew 29 percent to R113.5m, with diluted headline earnings per share 35.6 percent higher at 124.9 cents. The interim dividend was lifted by 23.8 percent to 78 cents per share.
CEO Pierre van Tonder said total franchised restaurant sales across the local and international operations increased by 4.5 percent to R4.1 billion.
“Economic headwinds dampen consumer spending in South Africa, with local franchised restaurant sales growth of 4.7 percent reflecting the pressure on the group’s main middle income customer base,” he said.
Load shedding has been disruptive to trading patterns and restaurant foot traffic.
“Our franchisees are investing in installing generators. About 80 percent of outlets can nowtrade during load shedding,” said Van Tonder.
The flagship Spur Steak Ranches brand increased restaurant sales by 4.5 percent and gained market share. Spur’s restaurant design and décor had been revamped, and a new menu catered for all taste profiles, including vegan-friendly options.
RocoMamas grew sales by 6.4 percent . John Dory’s lifted restaurant sales 6.6 percent and Panarottis and Casa Bella increased sales by 1.5 percent, impacted by aggressive discounting in the takeaway pizza market. The Hussar Grill’s higher income customers pushed sales 9.2 percent higher..
International restaurant sales increased by 4.1 percent. Restaurant turnover for the Africa and Middle East operations, which accounts for 82.3 percent of total international turnover, increased by 9.6 percent.
Continued poor trading conditions and the closure of a net two restaurants contributed to sales in Australia and New Zealand declining by 20.3 percent.