Spur Corp earnings up 31% on strong brand performance
September 6, 2012
Cape Town – Franchise restaurant group Spur Corporation today reported a 31% increase in diluted headline earnings per share to 128 cents for the year to June 2012, driven by a strong performance across all trading brands.
The total dividend was increased by 32% to 87.0 cents per share.
Group revenue increased by 25% to R503 million, with franchise revenue in Spur Steak Ranches increasing 14%, Panarottis Pizza Pasta by 12% and John Dory’s Fish Grill Sushi by 13%. Revenue also benefited from the inclusion of DoRego’s, the quick service value chain which was acquired with effect from 1 March 2012.
Chief executive, Pierre van Tonder, said the group has adopted an aggressive promotions strategy to increase foot traffic and attract cash strapped consumers across its local and international operations.
He said the Spur Family Card has been successful in driving customer loyalty. “Card membership has grown to over 1.1 million and accounts for 27% of the brand’s local restaurant turnover. The loyalty programme has grown the average spend per head and is creating a greater affinity with the Spur brand. Card holders spend on average 20% more than non-members,” he said.
Panarottis Pizza Pasta increased its focus on the family offering, while the menu has been refocused on the brand’s core products of pizza and pasta. Revenue benefited from ongoing weekday specials and the refurbishment of existing outlets. John Dory’s Fish Grill Sushi has shown encouraging growth under new management and boosted turnover through refocused marketing and by targeting quieter trading periods.
DoRego’s offers chicken, seafood and burgers through 74 franchised outlets. Van Tonder said the retention of key management ensured the seamless integration of the brand into the group. “The DoRego’s brand gives the group exposure to a broader segment of the market and we have an exciting expansion plan for the new year.”
International revenue, comprising franchise revenue and turnover from company-owned restaurants, reflects the improving trading performance in Africa, Mauritius and the United Kingdom, and increased by 24%.
Manufacturing and distribution revenue rose by 31% to R143 million, which includes the addition of the revenue from the DoRego’s distribution centre for the four months to June 2012 of R24 million. Spur Corporation’s restaurant base was expanded to 456, including the 74 DoRego’s outlets. In South Africa, 12 new Spur, three Panarottis, one John Dory’s and two DoRego’s outlets were opened. A further eight restaurants were relocated and 65 outlets were refurbished.
International expansion focused on Africa, with five Spur and two Panarottis franchised outlets being opened across the continent. Spur openings included Zambia, Malawi, Botswana, Namibia and Nigeria and Panarottis openings included Botswana and Zimbabwe. The group has a growing brand presence in Mauritius where two Spur and four Panarottis restaurants were opened during the year.
On the outlook for the year ahead, Van Tonder said the retail trading environment is expected to remain challenging. “We are confident that by offering quality and good value across our brands we will remain competitive in the eatout
The group plans to open eleven new Spur Steak Ranches as well as seven Panarottis, eight John Dory’s and ten DoRego’s outlets in South Africa in the 2013 financial year. Seven new stores are planned to open in the rest of Africa, two in Mauritius and one in the Seychelles. African expansion includes the opening of second outlets in Nigeria, Kenya, Tanzania, Swaziland and Zambia. Two further outlets are planned for Namibia.
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 021 702 3102 / 082 468 1507