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Spur restaurant sales top R6bn

Sep 10 2015 12:42

(Supplied)

Company Data

SPUR CORPORATION LIMITED [JSE:SUR]

Last traded 27
Change 0
% Change 1
Cumulative volume 88726
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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Cape Town – Restaurant franchise group Spur Corporation [JSE:SUR] said on Thursday comparable profit before tax, excluding the impact of a black economic empowerment deal and exceptional and one-off items, increased by 10.8%.

The profitability for the year to end-June was impacted by a share-based payment expense of R33m relating to the black economic empowerment transaction with Grand Parade Investments in October 2014, the group said in a statement.

Headline earnings increased by 4.7% to R141.5m with diluted headline earnings per share 3.2% lower at 152.8 cents per share. Excluding the impact of the GPI transaction and other exceptional and one-off items, headline earnings per share increased by 14.3%.

Spur’s share price dropped 2.41% to R34.35, despite the group announcing a total dividend increase of 9.1% to 132c per share.

The fast food chain said its worldwide restaurant sales increased by 12.1% to R6.2bn, despite a slowdown in consumer spending.

It said it continued to gain market share in the year to June 2015, increasing its restaurant base to 522 by adding 52 new outlets in the review period.

Load shedding impacts

Sales from its 464 restaurants in South Africa grew by 11.3%, while international restaurant sales from its 58 restaurants across Africa, Australia and the United Kingdom increased by 18.6%.

Group chief executive, Pierre van Tonder, said local trading was impacted by load shedding which reduced local restaurant turnover by an estimated 3%.

“Generators have been installed in 283 of our local restaurants at a cost to franchisees of approximately R106m,” he said.

Despite this and operating in an environment of continued slowdown in middle-income spending and consumer confidence sinking to its lowest levels in over a decade, the group showed “a competitive performance”, said Van Tonder.

Panarottis Pizza Pasta continued its strong growth trend and increased local restaurant sales by 25.4%. Spur Steak Ranches increased restaurant sales by 9.0%, John Dory’s grew by 12.0% and Captain DoRegos declined by 13.2%.

The Spur Family Card loyalty programme has grown to 1.9 million active members who account for 45% of Spur’s restaurant sales.

In March 2015 the group bought a 51% stake in RocoMamas, a trendy fast casual dining restaurant chain offering artisanal-style “smash burgers”, ribs and wings. Four new outlets have been opened, bringing the total to nine.

“The brand has exciting growth prospects nationally and we plan to double the number of RocoMamas outlets in the year ahead,” said Van Tonder.

International expansion

The group’s African operation delivered strong growth. The footprint in the region was expanded to 41 outlets, including the opening of six new restaurants, including the first international John Dory’s which was opened in Lusaka, Zambia.

Van Tonder said the performance in the UK and Ireland was disappointing, owing mainly to high levels of competition in the quick-service restaurant market and escalating labour, occupancy and food costs.

On the prospects for the group, Van Tonder said the economic and trading headwinds facing the food and restaurant sector are not expected to abate in the year ahead. Similarly, consumers are likely to remain under financial pressure.

The group plans to open 38 restaurants in South Africa. International expansion will focus mainly on Africa where 12 new franchised outlets will be opened, including additional restaurants in Nigeria, Zambia, Kenya and Namibia, and the first outlets in Ethiopia.

The first international outlets for RocoMamas and The Hussar Grill will be opened in Namibia and Zambia respectively.

Two new restaurants will be opened in Perth, Australia, and the group plans to expand the RBW pilot project in the UK to a further three sites.

spur  |  companies  |  retail
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