Spur Corporation earnings up 22% on strong sales growth
September 12, 2013
Cape Town – Spur Corporation today reported a 22% increase in diluted headline earnings per share to 157 cents for the year to June 2013 following a robust performance across all brands in the current weak consumer spending environment.
The total dividend for the year was increased by 28% to 111 cents per share.
Group revenue increased by 30% to R653 million, with Spur Steak Ranches growing by 16%, Panarottis by 29% and John Dory’s by 6%. Revenue was bolstered by the inclusion of the Captain DoRegos chain and distribution centre from 1 March 2012 and the acquisition by the group of two previously franchised Spur outlets in England and Ireland during the year.
Chief executive, Pierre van Tonder, said the strength of the group’s brands and increasing customer loyalty ensured the group entrenched its position in the highly competitive family sit-down restaurant market.
Total restaurant sales across the group increased by 16%. Sales in South Africa grew by 15% and in the international operations by 25% in Rand terms.
Van Tonder said the strong growth in Spur was driven by the continued success of the breakfast and weekday promotions, and the upgrading of kids’ play facilities in restaurants. The Spur Family Card continues to attract increasing volumes of customers, with membership growing to 1.4 million by year end.
“We also managed to contain the menu price increase in Spur to 3.6% despite the high levels of food price inflation over the past year,” he said.
Sales growth of 31% in Panarottis was driven by weekday and breakfast specials, supported by targeted revamps of existing outlets and the introduction and improvement of kids’ play facilities.
John Dory’s grew sales by 11% as customers responded positively to the innovative marketing campaigns, the new menu offering and weekday specials.
Captain DoRegos has been fully integrated into the group and generated restaurant sales of R191 million and distribution centre sales of R73 million in its first full year of inclusion. Eleven new outlets were opened during the year.
Manufacturing and distribution revenue increased 50% to R214 million, lifted by higher sauce manufacturing volumes and the inclusion of the Captain DoRegos distribution centre for the full year. The upgrading of the central kitchen facility was completed and a new sauce bottling plant was commissioned during the year.
International revenue, comprising franchise revenue and company-owned restaurant turnover, increased 33% to R191 million as the performance of the UK operation continued to improve. The Spur outlets in Staines (England) and Dublin (Ireland) were converted to company-owned restaurants during the past year. All eight restaurants in the UK and Ireland are now company-owned.
Van Tonder said Africa continues to deliver stable growth while trading conditions and revenues have remained under pressure in Australia, resulting in the group impairing the assets of one of the restaurants owing to the challenging trading performance.
A net 23 new outlets were opened across the group during the year, bringing the total restaurant footprint to 479. Internationally the group now has 50 outlets following the opening of a new Spur restaurant in Nairobi (Kenya) and a Panarottis Express outlet in Mauritius. The first international Captain DoRegos outlets were opened in Namibia and Mauritius.
Discussing the outlook for the year ahead, Van Tonder said disposable income in the group’s target markets is likely to remain under pressure as economic uncertainty continues. “Our brands will continue to deliver excellent quality meals at a reasonable price, with great service in an enjoyable family environment.”
The group plans to open at least 26 new restaurants across the four brands in South Africa in the year ahead. This includes six Spur, five Panarottis, four John Dory’s and seven Captain DoRegos outlets to be opened in the first half of the year.
International expansion will continue to focus on Africa, with new restaurants planned for Swaziland, Nigeria, Tanzania, Namibia and the Seychelles. Two new Spur franchised restaurants will be opened in Australia in the year ahead.
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