Press release
SALES UPDATE FOR THE YEAR ENDED 30 JUNE 2019
July 29, 2019
Spur Corporation – Sales update
Spur Corporation Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/000828/06)
Share code: SUR
ISIN: ZAE 000022653
(“Spur Corporation” or “the group”)
SALES UPDATE FOR THE YEAR ENDED 30 JUNE 2019
Spur Corporation increased total franchised restaurant sales by 7.2% to R7.6 billion in the year to 30 June 2019.
Franchised restaurant sales in South Africa grew by 6.2%, with sales from international restaurants increasing by 16.2% in Rand terms. International restaurant sales increased by 12.3% on a constant exchange rate basis.
These results include the Nikos Coalgrill Greek chain which was acquired with effect from 1 August 2018. The chain comprised six outlets at the date of acquisition, while a further three outlets have been opened subsequently. The chain contributed franchised restaurant sales of R65.9 million for the 11 months since acquisition.
The results exclude the Captain DoRegos chain which was sold with effect from 1 March 2018. At the date of disposal, the brand comprised 43 South African restaurants with local franchised turnover for the eight months to the date of disposal amounting to R71.8 million and R4.5 million for the three international restaurants.
In South Africa, 39 restaurants were opened (in addition to the six Nikos restaurants acquired) and 15 closed during the year, while 20 restaurants were opened and 5 closed internationally. The group opened its first restaurants in India and Cyprus, both RocoMamas outlets, during the year. At 30 June 2019, the group’s restaurant base comprised 620 (June 2018: 575) outlets, including 77 (June 2018: 62) operating outside of South Africa.
Chief executive, Pierre van Tonder, commented on the performance for the period: “Following increases of 11.3% and 1.3% in local restaurant sales in the first and second quarters of the financial year, the group reported growth of 7.5% for the third quarter and 6.0% for the fourth quarter. The growth in the second half was supported by a recovery in the John Dory’s brand following the re-opening of restaurants temporarily closed in the first half, a turnaround in RocoMamas as a result of investment in marketing in the second half which saw a return to positive existing business growth, and the continued resilience of customers in the upper income market in which The Hussar Grill operates.
“The group’s main middle income target market remains under financial pressure due to the sombre state of the economy. Restaurant turnover for the Panarottis chain was impacted by aggressive discounting by competitors in the takeaway pizza market, while the brand’s strategy has been a deliberate shift away from discounting to focusing on product quality and value, which has had a negative impact on turnover in the short term.”
“Restaurant trading conditions continued to deteriorate in Australia and New Zealand where turnover declined by 14.2% following the closure of three restaurants. Africa and Mauritius, which accounts for 71.8% of international restaurant turnover, performed well and benefited from the opening of new restaurants. This included 8 new Panarottis restaurants in Zambia, increasing the number of outlets in that country to 13.”
The financial information in this sales update has not been reviewed or reported on by the group’s independent auditor. Spur Corporation’s annual results for the year ended 30 June 2019 will be released on SENS on 12 September 2019.
Cape Town
25 July 2019
Sponsor
Sasfin Capital
A division of Sasfin Bank Limited