Spur sees recovery in financial position

THE Spur Corporation dished up a whopping 119,4% increase in headline earnings to N$59 million in the six months to December 2021, as trading conditions improved with the easing of Covid-19 lockdown restrictions.

There was a strong increase in restaurant foot traffic over the past few months of 2021, chief executive Val Nichas said last week.

Group revenue grew by 40,3% to N$441 million due to improved franchised restaurant turnover, higher sales in the five company-owned restaurants and increased sales from the manufacturing and distribution division.

Comparable profit before income tax, excluding once-off and unusual items, increased by 96,3%.

An interim dividend of 49 cents per share was declared and the group was ungeared at the end of December, with N$259 million cash on hand.

Nichas said following the reduction in lockdown levels and the easing of trading restrictions, customer counts in restaurants improved from August to December 2021, with strong trading in the fourth quarter of the 2021 calendar.

“While there is still uncertainty (about) the pandemic, the group demonstrated a pleasing recovery in trading. However, franchised restaurant turnover for the half year remains 9,5% behind pre-Covid-19 levels,” she said.

Franchised restaurant sales grew 28,3% over the prior period when significant restrictions on sit-down trade were in place.

Trading conditions were also hurt by the civil unrest in KwaZulu-Natal in July.

Growth was driven mainly by the Spur brand, which increased local restaurant sales by 32,6%. Panarottis, John Dory’s and RocoMamas all increased restaurant sales by a third and The Hussar Grill by 45% in South Africa.

Takeaways accounted for 20% of South African turnover in the past six months, with the highest percentage of takeaways at RocoMamas (53%) and Panarottis (40%).

The group’s restaurant base expanded to 627, with 545 outlets in South Africa and 82 across the rest of Africa, Mauritius and the Middle East.

Sixteen restaurants were opened in South Africa, including seven RocoMamas, three Spur and two Panarottis outlets, while 10 were closed.

The most recent addition to the brand portfolio was Modrockers, a plant-based quick service restaurant.

Located in Rosebank, Johannesburg, the restaurant was in the fourth month of its pilot phase, and the group aimed to capitalise on the growth and awareness of plant-based eating.

The online, delivery-only virtual kitchen brands launched during the 2020 hard lockdown continued to gain traction, with over 170 group restaurants participating.

Following a positive customer response to the first Spur Drive Thru that opened in Pretoria in June, further potential sites had been identified, including two RocoMamas Drive Thrus that were being built.

Nichas said Covid-19 had a profound impact on the domestic restaurant industry, with an estimated 1 000 restaurants having closed since the onset of the pandemic.

“The restaurant franchising sector also faces increased operating costs which has resulted in a need to adjust staffing, reduce menus, introduce value offerings and simplify operations to offset increases in petrol, power and key food input costs. The recent increase in the minimum wage will continue to place pressure on restaurant business models, especially in some high volume sites like airports and resorts where turnovers have not fully recovered,” Nichas said.

New trends included convenience in prepared or near-finished meals. Online and food delivery was expected to continue to grow. Health options would gain momentum as vegan, vegetarian and plant-based offerings increase.

“There remains a constant need for providing value and reward,” Nichas said. – IOL News