Press release

Spur Corporation restaurant sales up by 12.9% to R7 billion

September 8, 2016

Cape Town – Spur Corporation delivered another robust trading performance in the year to June 2016 as total restaurant sales across its local and international operations grew by 12.9% to R6.97 billion.

The group’s headline earnings increased by 15.9% to R164 million with headline earnings per share growing by 11.9% to 170.9 cents.

Following the opening of 74 new outlets locally in the past year, the group’s worldwide restaurant base increased to 575.

Domestic restaurant sales grew by 13.0% as economic conditions worsened in the second half of the year while international sales increased by 12.1% in Rand terms.

Chief executive Pierre van Tonder said the group’s brands performed well in the face of lower consumer spending and benefited from new restaurant openings. However, the impact of the widespread drought in South Africa and the deterioration of the Rand, together with aggressive discounting by competitors, placed pressure on margins.

Panarottis Pizza Pasta grew restaurant sales by 18%, Spur Steak Ranches by 6.2%, John Dory’s by 17.7% and The Hussar Grill by 51.8%.

“Panarottis continued its strong growth trend of recent years, despite the increasing competition from international pizza brands entering South Africa,” he said.

RocoMamas, acquired by the group in 2015, continues to gain popularity among trendy urban millennial customers for its ‘Smashburgers’, ribs and wings. In the past year 33 RocoMamas restaurants were opened, bringing the base to 42.

During the year the group made a strategic decision to focus its international operations primarily on Africa and Australia, and ceased trading in the UK and Ireland. As a result, the remaining eight restaurants in the UK and Ireland were closed.

Ten international outlets were opened across Africa, Mauritius and Australia, bringing the total restaurant base outside South Africa to 58. These include the first international outlets for The Hussar Grill and RocoMamas in Zambia and Namibia respectively.

The group’s South African revenue increased by 11.7% to R600 million while international revenue declined 38.4% to R137.4 million owing to the closure of restaurants in the UK in the current and prior year, and the disposal of three retail outlets in Australia in the prior year. Group revenue from continuing operations increased 3.4% to R633.1 million.

Comparable profit before income tax from continuing operations, excluding exceptional and one-off items, and the impact of the group’s BEE transaction in the prior year, increased by 9.8%.

Headline earnings from continuing operations increased by 21% to R182.3 million with HEPS from continuing operations growing by 16.8% to 190 cents.

The total dividend was increased by 6.1% to 140 cents per share.

Discussing the prospects for the new financial year, Van Tonder said the group’s middle-income market will remain under pressure in the months ahead in an environment of low economic growth and negative consumer sentiment.

“We will continue to attract cost conscious customers through our quality, value- driven product offering, aggressive marketing campaigns and targeted television advertising,” he said.

Despite the slower economy, the group plans to open 28 restaurants across all brands in South Africa in the next 12 months.

Internationally, nine new franchised outlets are planned, including the first Spur outlets in New Zealand and Ethiopia, and additional restaurants in Nigeria and Zimbabwe.

The international expansion of RocoMamas will gain momentum with new outlets planned for Saudi Arabia, Oman, Kenya and Mauritius.

Ends

Issued by Tier 1 Investor Relations on behalf of Spur Corporation

For further information kindly contact

Pierre van Tonder, Spur Corporation 021 555 5100;

Graeme Lillie, Tier 1 Investor Relations 082 468 1507

 

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