Total restaurant sales grew by 10.0% to R5.9 billion, with the recently acquired Doppio Collection brands contributing sales of R351 million.
Group revenue rose by 13.8% to R2.0 billion through solid growth in franchise restaurant turnover, improved sales from the manufacturing and distribution division and higher sales from retail company stores.
Group profit before tax increased by 12.9% to R217 million with earnings per share up 12.1% to 179 cents. Cash generated from operations was R79.3 million higher at R179.5 million, with unrestricted cash on hand of R368 million at the half year.
Group CEO Val 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 said.
The iconic Spur Steak Ranches brand increased restaurant sales by 2.8%, accounting for 64% of total South African sales. Sales generated by the Spur Family Club loyalty programme represent over half of the brand’s restaurant turnover. Panarottis increased restaurant sales by 14.0% and RocoMamas by 8.4%, with the brands each representing 10% of local sales.
Sales in the speciality brand portfolio increased by 86.0%, bolstered by the inclusion of the Doppio Collection. Excluding the three Doppio brands, sales grew by 5.2% which was mainly driven by the reputable grill house chain, The Hussar Grill.
International franchised restaurant sales increased by 8.7%. Mauritius represents 23% of international sales with Spur leading the brand sales contribution at 40%, followed by Panarottis at 33% and RocoMamas at 27%.
Nichas said “the group’s ability to harness its resources and apply our 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.”
She said 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.
“The successful repositioning of Panarottis continues to attract growing support from customers and potential franchisees. The Panarottis small town strategy has gained momentum, confirming that the brand is well positioned to be a dominant brand in the pizza casual dining category.
“At the same time, the marketing and product innovation strategy of RocoMamas is yielding good results. The second new-look John Dory’s restaurant was opened as part of the brand’s repositioning strategy while enhanced designs have also been applied to The Hussar Grill and Doppio Zero restaurants,” said Nichas.
The group continues to capitalise on consumer demand for convenience, with takeaway sales accounting for 13% of total local restaurant sales. Collect orders comprise 48% of takeaways, with the balance delivered by Mr D and Uber Eats.
The six virtual kitchen brands are now operating from 392 restaurants and have consistently maintained their market share of the online ordering channel. Pizza Pug and Just Wingz are the top performing brands. The virtual kitchen brand Mac&Rib was introduced with the Doppio Collection acquisition.
The group has accelerated its restaurant expansion programme with 21 restaurants being opened in South Africa and five closed, bringing the local restaurant count to 619. The restaurant openings included three Doppio Zero, one Piza é Vino and one Modern Tailors restaurant. Doppio Zero opened its first Halaal restaurant in KwaZulu-Natal which has been well received by consumers.
Twelve new restaurants were opened in the rest of Africa to bring the international store network to 107 after three restaurants were closed. The refreshed Spur branding was incorporated into the newly-built Spur restaurants in Botswana and Zimbabwe, and a restaurant in Namibia was revamped with the updated brand identity.
Discussing the trading outlook for the months ahead, 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.”
She said 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. This confidence is reflected in the planned growth of the group’s restaurant portfolio, with 47 new outlets planned for South Africa and 13 internationally for the 2025 financial year.
“As a group we are well positioned to gain market share across categories, regions and countries, supported by our portfolio of 10 distinctive, market-leading restaurant brands. Our brands have certainly not reached saturation levels and we will continue to focus our purpose of ‘Leading for the Greater Good” as we align all our activities on our strategic growth on the continent of Africa and leveraging the group’s unique differentiator of casual dining brands that lead the experience,” she said.
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
