Johannesburg - Spur Corporation’s South African outlets proved to be resilient in the year to June as they helped the company offset declining sales in its some of its international markets.
For the full year, Spur reported revenue overall slightly up by 3.7 percent to R760 million, with income in its home base growing 11.7 percent. International revenue, comprising franchise revenue and company-owned restaurant turnover, declined 11.5 percent to R223.1 million, partially due to the closure of a retail outlet in the UK and the sale of all three retail outlets in Australia during the year.
However, the franchise restaurant company noted its performance was impacted by a R33 million share-based payment linked to its empowerment deal with Grand Parade Investments.
The deal, which became effective at the end of October last year, resulted in Spur issuing 10.8 million shares, which increased the average weighed number of shares in issue.
Pre-tax profit was almost flat, gaining 1.8 percent to R205.4 million, which includes the Grand Parade charge and other items such as a foreign exchange gain, impairements and once-off items. Stripping out these aspects, pre-tax profit would have gained 10.8 percent, Spur explains in its results commentary.
Headline earnings gained 4.7 percent to R141.5 million, but the exceptional items weighed on diluted headline earnings per share, which lost 3.2 percent to 152.8 cents a share.Stripping out the exceptional items, headline earnings per share would have gained 14.3 percent.
Spur has 522 outlets now as it opened 15 Spur restaurants, 12 Panarottis, seven John Dory's, 12 Captain DoRegos, two The Hussar Grill and four RocoMamas outlets. It bought a 51% stake in RocoMamas in March. The outlet is marketed as a trendy, fast-casual dining restaurant brand offering hand-made "smash-style" burgers, ribs and wings.
When Spur bought into it, the chain had five franchised restaurants in Gauteng and a further four were opened before year-end.
In the new year, Spur says it will open 38 restaurants across its brands in South Africa, which includes doubling RocoMamas’ existing restaurant base.
International expansion will focus mainly on Africa where 12 new franchised outlets will be opened. These include additional restaurants in Nigeria, Zambia, Kenya and Namibia, and the first outlets in Ethiopia. The first international outlets for RocoMamas will be opened in Namibia, and the first The Hussar Grill will open in Zambia.
In Australia, one Spur and one Panarottis restaurant will be opened in Perth. In the UK, the group plans to expand the Ribs Burgers Wings pilot project to a further three sites, and suitable locations are currently being evaluated.
Franchise revenue in Spur increased by 9.5 percent, Panarottis by 31.7 percent and John Dory's by 13.7 percent, with improved margins in each of these franchise divisions, Spur Corporation says.
Franchise revenue for Captain DoRegos declined by 25.8 percent and its trademark has been impaired by R13.9 million. The Hussar Grill generated R33.2 million in franchise and retail revenue in its first full year in the group.
Revenue in the manufacturing and distribution division was 1.5 percent lower owing to the impact of the closure of the Captain
DoRegos warehouse and distribution centre in the previous financial year. Comparable revenue increased by 13 percent.
In the past year franchisees invested over R310 million in opening, relocating or revamping restaurants.
Spur declared a 132c dividend, a 9.1 percent improvement on last year.
IOL