Spur Corporation’s strategy aims to ensure that sustainable returns are generated for providers of financial capital over the long term. These returns support the creation of value for the group’s other key stakeholders. The strategy is based around two complementary objectives, supported by the strategic value drivers shown in the diagram below.
- Increase same store sales through effective marketing, excellent service, outstanding food, good value and
compelling loyalty programmes
- Open new outlets in existing markets
- Expand into new geographic markets
- Strategic acquisitions
- Vertical integration opportunities
MAINTAINING A SUSTAINABLE BUSINESS
- Responsive and agile franchise model
- Ensuring that franchisees can earn a competitive return
on their investment
- Ethical business practices and good corporate governance
- Social responsibility
- Environmental responsibility
Performance against the strategic objectives is tracked against key performance indicators (“KPIs”) which include short-term (one-year) and medium-term targets. The table below summarises a few high-level KPIs and the full table can be found on page 76. The short-term incentive scheme and the new long-term equity-settled share appreciation rights schemes reward successful implementation of group strategy, as discussed in the remuneration report on page 71.
Key Performance Indicators summary
|Total worldwide restaurant turnover (R’m)||6 972||7 672||7 157||7 074|
|Operating profit margin1||29.7%||40.0%||27.9%||29.5%|
|Return on equity2||19.7%||25.0%||16.6%||17.8%|
|Total local restaurants||517||535||528||548|
|Percentage of international revenue to total group revenue||18.6%||5.0%||4.9%||5.0%|
|Percentage of international profits to total group profit before income tax||(11.5%)||3.5%||3.5%||2.5%|
|Number of international outlets||58||65||63||68|
|Percentage of suppliers that have adequate and appropriate sustainability plans in place||100%||100%||100%||100%|
|Employee training costs (R’000)||1 763||2 000||2 248||2 057|
|Community support (R’000)||2 243||3 075||2 930||3 473|
|Electricity consumption (kWh per annum)4||705 040||700 000||679 591||700 000|
|1||Includes share of profit/loss of equity-accounted investee (net of income tax).|
|2||Profit for the year adjusted for headline earnings adjustments and foreign exchange gain/loss, divided by equity.|
|3||In prior periods the group published medium-term targets. Given the current uncertainty in the markets we serve we are revising our medium-term targets and will disclose these when we have more confidence that they are realistic.|
|4||Electricity consumption targets have been rebased as further information has been obtained.|
Spur Corporation’s management and governance structures support, monitor and facilitate economic, social and environmental performance to drive the effective execution of the strategy.
The group recognises information technology (“IT”) as a key enabler to achieve the group’s strategy and invests heavily in building IT capabilities that support improved strategy execution. These capabilities allow the group to influence purchase behaviour across all target markets through platforms such as digital loyalty, e-gifting, business-to-business e-commerce, GPS locations, generator notifications and social network management.
A new marketing intelligence tool is in the process of finalisation. Once implemented, this intuitive digital application will interrogate consumer behaviour with reference to social media interests and loyalty sales data to allow personalised, targeted automated communication to our customers on a large scale.
Those matters that have the most significant effect on Spur Corporation’s strategy and ability to create value are listed in the table of material matters. The group’s main stakeholders, their key concerns and how we aim to address these are analysed here.
The group’s economic material matters are discussed in more detail in this section of the report, including the group’s strategic response to the opportunities and risks associated with each. Spur Corporation’s social and environmental material matters are discussed in a separate report available online.
STRATEGIC OBJECTIVES AND RELATED MATERIAL MATTERS
MAINTAINING A SUSTAINABLE BUSINESS
|Sustainable local franchise model||here|
|Efficient use of resources||here|
|Health and safety||here|
|Human capital and skills development||here|
|Franchisee employee training||here|
|Operational and strategic resource management||here|