TASTE FOR LIFE: Spur Corporation has expanded its total footprint to 613 restaurants with 22 units opened in SA despite subdued sales in 6 months to December. Picture: Simphiwe Mbokazi/ANA
JOHANNESBURG - Franchisor Spur Corporation has expanded its total footprint to 613 restaurants with 22 units opened in South Africa despite subdued sales in the six months to December.

The group also opened outlets in Nigeria, Mauritius, Kenya and Namibia. It said that while its expansion would be focused primarily in Africa, it was planning to open two units in Saudi Arabia and one in Australia.

Chief executive Pierre van Tonder said the group planned to open more restaurants across all brands in South Africa in the second half of the financial year as the political and financial sentiment improved.

“The ongoing political instability in the country during the reporting period, together with higher living costs, negatively impacted consumer sentiment and discretionary spending, resulting in a sharp decline in restaurant and shopping centre foot traffic,” Van Tonder said.

The group reported a 2.6percent decline in total franchised restaurant sales from continuing operations to R3.7billion.

South African sales eased 3percent against a 3.2percent rise in international sales on a constant exchange rate basis.

Group revenue declined 0.9percent to R344.6million while headline earnings from continuing operations declined by 11.8percent to R96.6m and by 19.7percent on a comparable basis.

Diluted headline earnings per share from continuing operations declined by 11.7percent to 100.9cents a share and as a result the group declared an interim dividend of 63c a share, which was 11.3percent lower compared to last year.

Van Tonder said that despite tough trading conditions during the period, the group had still managed to show a marked turnaround in the second quarter, with sales declining by only 0.2percent as compared to a decline of 6.2percent in local restaurant sales.

“This trend was particularly evident in the Spur chain, which reported a 5.3percent decline in second quarter sales, compared to a 14percent decline in the first quarter, when the chain encountered major headwinds,” he said.

The group experienced positive growth in RocoMamas as it continued its strong growth trajectory and increased sales by 37.5percent and it opened eight new restaurants in South Africa.

Panarottis and Casa Bella also grew sales by 6.6percent in the highly competitive pizza market, while John Dory’s increased sales by 1.8percent and The Hussar Grill by 24.1percent.

Sales in Captain DoRegos declined by 12.2percent.

Spur achieved mixed results in the international business with sales in Mauritius, which consists of 11 outlets, increasing by 15.7 percent.

Africa, with 39 outlets, declined by 0.9percent, while sales in Australasia, which has 11 outlets, were down by 12percent.

Van Tonder said that while the stabilising political environment in South Africa was expected to boost consumer confidence in the short term, any improvement in spending was likely to follow an economic recovery in the medium to longer term.

He said the focus in the months ahead would be on food quality, value, competitive pricing and driving customer loyalty across all brands. “The improving performance in the second quarter augurs well for stronger results in the second half, particularly for the Spur chain,” Van Tonder added.

Spur shares closed 0.40percent higher on the JSE yesterday at R27.51.