Spur Steak Ranches new look is bolstering bumper sales.
Image: Suppled
Spur Corporation, a leading restaurant franchise group, dished up sizzling results with a 10% increase in total restaurant sales for the six months ending December 2024 despite intensified competition in the casual dining sector.
This as Group CEO Val Nichas, presenting the results on Wednesday, said, "Spur is looking at new markets, new regions and new opportunities" as well as creating more value for customers across all business verticals.
Headline earnings per share rose 12.1% to 179 cents from the prior period. Headline earnings increased by 11.5% to R144.4 million.
Revenue grew by 13.8% to R2 billion, driven by a 10.0% increase in total restaurant sales to R5.9bn and contributions from the Doppio Collection, acquired in December 2023, which added R351m in sales.
The board declared a dividend of 106 cents per share, an 11.6% rise from the previous year, totaling R96.5m.
Nichas said, “Despite the sustained pressure on disposable income, the group continues to attract customers into restaurants with its distinct and differentiated value proposition. Our proven capability in casual dining hospitality remains our strategic competitive advantage.”
She added the group’s ability to harness its resources and apply its brand expertise to evolve and grow brands has been core to the resilient trading performance, ensuring that the brands remain relevant and appealing to customers as competition in the sector escalates.
The Spur Steak Ranches brand, representing 64% of South African sales, grew restaurant sales by 2.8%. Panarottis sales rose 14.0%, and RocoMamas increased by 8.4%, each comprising 10% of local sales.
The speciality portfolio, including The Hussar Grill, saw sales jump 86% with Doppio Collection included, or 5.2% without it. International sales grew 8.7%, with Mauritius accounting for 23% of the total, led by Spur (40%), Panarottis (33%), and RocoMamas (27%).
Takeaway sales made up 13% of local restaurant sales, with 48% as collect orders and the rest via delivery platforms like Mr D and Uber Eats.
On brand updates, Nichas noted, “The evolution of the Spur brand restaurant concept and the new brand identity has been incorporated into 36 new-look Spur restaurants, which are providing consumers with a refreshed family dining experience. Most of the revamped Spur restaurants are reporting double digit turnover increases.”
Operating profit before tax rose 12.9% to R216.6m. Debt levels remained stable, with cash on hand at R368.4m, slightly up from R365.7m at the full-year mark, and cash generated from operations increased by a remarkable R79.3m to R179.5m.
Operationally, Spur said it has expanded its footprint to 726 restaurants across 15 countries, up from 701 in June 2024. In South Africa, 21 new restaurants opened, including six Spur, six Panarottis, three Doppio Zero, one John Dory’s, three RocoMamas, one Piza é Vino, and one Modern Tailors, while five closed, bringing the local total to 619.
Internationally, 12 new outlets opened, primarily in Africa, with three closures, increasing the network to 107.
Looking ahead, the group plans to open 47 new restaurants in South Africa and 13 internationally in the 2025 financial year.
The Doppio Zero team has also just won a tender with the Mediclinic group, Nichas revealed.
Spur was looking at what tax increases the South Africa Budget will detail next week.
Nichas said, “The stable electricity supply, lower levels of inflation and interest rate relief are all levers to support increased spending and confidence in the country. However, this may be negated by an increase in tax rates, and in particular VAT, which impacts all consumers, as well as the recent recurrence of intermittent load shedding.”
While South Africa’s economic growth was forecast to accelerate in the year ahead, this was unlikely to translate into improved trading conditions in the short term.
“While trading conditions will remain challenging in the short to medium-term owing to continued pressure on consumer spending, the group is positive on the longer-term prospects,” Nichas said.
In Spur's results webinar Q&A, Cobus Cilliers, a senior equity analyst from All Weather Capital, and other analysts congratulated the group on delivering a good set of results.
BUSINESS REPORT