Total restaurant turnover in the international division increased 18.6% to R726.2 million (2014: R612.1 million), representing 11.8% of total restaurant turnover (2014: 11.1%), while existing businesses increased turnover by 9.3%. Applying a consistent exchange rate, total restaurant sales increased by 16.5% and by 7.3% in existing outlets.
The eight restaurants in the UK and Ireland are company-owned, and include the first pilot Spur RBW restaurant, while those in Africa and Mauritius are all franchised. Three of the restaurants in Australia were company-owned at the start of the year, but these were sold to franchisees. This means that all outlets in Australia are now franchised.
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Trading was positive despite the challenge of managing high labour costs. There was a marked downturn in the Western Australian economy due to the slowdown in the mining sector. However, the opening of a new Spur franchise in Perth was well received and another is planned for the second quarter of the 2016 financial year. The group sold off its remaining interests in Panarottis Blacktown, Panarottis Penrith and Silver Spur Penrith to franchisees and the focus will be on pursuing further franchising opportunities.
Total restaurant turnover in company-owned restaurants decreased due to intense competition which, along with continued high labour, occupancy and raw material costs, negatively affected profitability.
Following a sustained period of losses, Mohawk Spur in Wandsworth (which had previously been impaired for accounting purposes) was closed on 28 February 2015.
The long-term viability of a number of the existing outlets is uncertain due to the operating challenges and tough economic conditions. Where practical and economically feasible, the group will look to exit from these businesses.
The first of the new concept restaurants, Spur RBW (Ribs Burgers Wings), was launched in Corby on 26 June 2015 and initial turnover is encouraging. The trimmed-down menu and reduced size of this model reduces set-up costs, rentals and labour costs. It appears to be a more attractive franchising opportunity. The board has approved a total facility of GBP1 million to expand this pilot concept to four company-owned outlets in order to assess the feasibility of the rollout.
Total restaurant sales for franchised restaurants in Africa and Mauritius grew by more than 25%, confirming the potential for strong growth in the region. The group opened three more Spurs in Namibia and a Spur and a Panarottis in Tanzania. The opening of the first international John Dory’s restaurant in Lusaka, Zambia, has been well received and is a good indicator of the potential for this brand in African markets. The first international The Hussar Grill is set to open in the second quarter of the 2016 financial year in Lusaka, Zambia and the group will pursue further opportunities in selective locations throughout the continent. Enquiries for Captain DoRegos outlets in the region are received on a regular basis due to their low set-up cost.
Spur Corporation has planned openings of further new restaurants in Zambia, Namibia, Kenya, Nigeria, Botswana and Ethiopia. Area Development Agreements have been signed in Ethiopia, Angola and Mozambique and plans are underway to develop our brands in these territories.