Franchised restaurant turnover grew by 10.4% to R5.4 billion and revenue increased by 15.2% to R1.8 billion. The group increased sales in its retail company stores by 47.4%, aided by the Doppio Collection acquisition, while sales from the manufacturing and distribution division were 12.4% higher.

Diluted headline earnings per share grew by 14.8% to 157 cents and the interim dividend was increased by 15.9% to 95 cents per share. The group’s balance sheet remains ungeared, with unrestricted cash on hand of R288 million.

Group CEO Val Nichas said after the group delivered a strong performance in the first quarter of the financial year, the second quarter was marked by slower trading patterns. However, restaurant turnovers were boosted by buoyant December trading, reflected in 251 of the 305 Spur restaurants in South Africa exceeding their turnover records in December 2023.

High numbers of tourists in the Western Cape enabled the group to report double-digit growth for the festive season trading period. The group also performed well in KwaZulu-Natal in December 2023 despite the impact of roadworks, heavy rains and beach closures on tourism in the region.

“However, the high cost-of-living continues to impact household spend and lower and middle income consumers are diverting a greater share of their wallets to fund the increasing cost of food, housing, energy and transport,” she said.

Spur Corporation’s acquisition of a 60% interest in the Doppio Collection, comprising the Doppio Zero, Piza e Vino and Modern Tailors brands, was effective from 1 December 2023. The Doppio Collection includes 27 franchised and 10 company-owned restaurants, as well as a bakery and central supply business. Restaurant sales for December totalled R66.7 million.

“The acquisition will strengthen our position in the day-time speciality dining segment and accelerate the group’s entry into the speciality coffee market. We have received considerable interest across our franchise network on the Doppio Collection portfolio of speciality brands and this will be key to expanding the brands nationally,” she said.

Nichas said the identity of the 57-year-old Spur brand had undergone a creative transformation during the period, with the new contemporary brand icon designed to be more inclusive, colourful and refreshed. “The bold new look is part of the refresh of the brand and the dining experience, and has been incorporated in four Spur restaurants to date which are all reporting double-digit turnover growth,” she said.

In the six months to December 2023, Spur accounted for 69% of the group’s South African sales followed by RocoMamas and Panarottis which each represent 10%. The international restaurants account for 10% of group sales.

Volume growth in South Africa was mainly driven by the iconic Spur brand which increased restaurant sales by 10.0%. Panarottis grew sales by 10.1%, RocoMamas by 6.0% while John Dory’s sales were 0.8% lower. The speciality brands increased sales by 38.7%, and by 12.1% excluding the three Doppio Collection brands, which was mainly due to The Hussar Grill which benefited from the increase in local and international tourism.

The group continued to capitalise on consumer demand for convenience. Local takeaway sales now represent 14% of total local restaurant sales. Collect orders comprise 55% of takeaways, with the balance through Mr D and Uber Eats.

International franchised restaurant sales increased by 8.0%, with the Spur brand accounting for 40% of international sales, Panarottis 33% and RocoMamas 26%.

The group’s restaurant footprint increased to 687 outlets across South Africa and 13 countries in the rest of Africa, Mauritius and the Middle East. In South Africa, 14 restaurants were opened in the first six months. The Doppio acquisition added 25 Doppio Zero, 10 Piza e Vino and 1 Modern Tailors restaurant to the network, bringing the South African restaurant count to 595.

Internationally, new restaurants were opened in Zambia and Zimbabwe, while the Doppio acquisition added one Doppio Zero outlet in Botswana, bringing the international restaurant base to 92.

On the outlook for the remainder of the 2024 financial year, Nichas said trading conditions will remain challenging with the myriad of headwinds including electricity shortages, inconsistent water supply, high unemployment and supply chain disruptions, coupled with high interest rates and the weakening currency. Uncertainty ahead of the general elections on 29 May 2024 poses a further risk to the trading environment.

Nichas said while the weak macroeconomic climate will constrain consumer spending, “we are positive on the outlook and will continue to work in partnership with our franchisees in responding to the changing consumer environment.”

She said the group is well positioned to gain market share across categories, regions and countries, supported by the portfolio of ten diverse and distinctive restaurant brands. “Market share growth will be driven by exceptional customer experience, fanatical attention to product quality and added value to captivate customers and ensure sustainable growth,” she said.

Management’s optimism is reflected in the group’s plans to open 41 new restaurants in South Africa and 12 internationally for the financial year.

Ends

Issued by Tier 1 Investor Relations on behalf of Spur Corporation

For further information kindly contact
Val Nichas, Spur Corporation 021 555-5100 valentinen@spurcorp.com
Graeme Lillie, Tier 1 Investor Relations 082 468 1507 graeme@tier1ir.co.za

Media requests for images kindly contact
Moshe Apleni, Spur Corporation moshea@spur.co.za