Press release

Spur Corporation revenue up 17% in resilient trading

February 26, 2009

Group opens 350th restaurant

Cape Town – Franchise restaurant group Spur Corporation has again demonstrated its resilience in the face of increasing pressure on consumers, increasing revenue by 16.9% to R169.4 million in the six months to 31 December 2008.

Diluted headline earnings per share for the period increased 11.9% to 44.25 cents per share.

Group managing director, Pierre van Tonder, said the value-for-money offering and affordability of the group’s brands, together with the family eating and entertainment experience, has proved popular with consumers in the tougher economic climate.

“The flagship Spur Steak Ranches brand continued to grow market share and lifted revenue by 11%. Revenue in Panarottis Pizza Pasta was steady while John Dory’s Fish & Grill grew revenue by 25%. Internationally, franchise revenue was up 10%, while company-owned restaurants increased turnover by 33%, benefiting from the opening of two new retail restaurants in the second half of the 2008 financial year,” he said.

The group’s operating margin was impacted by exceptional foreign exchange losses of R3.0 million (2008: R0.4 million) in the international operations, arising mainly from the substantial weakening of the Pound Sterling against the Euro in December 2008. This resulted in the margin declining from 34.2% to 32.6%. If these losses had not been incurred, the operating margin would have remained constant.

Operating profit for the period rose 11.2% to R55.1 million, a creditable performance in an environment of economic slowdown locally and internationally.

Van Tonder said Spur Corporation opened its 350th restaurant during the period. The group has 315 outlets in South Africa and 35 restaurants in the international operations across Africa, Australia and the United Kingdom.

Eight restaurants were opened during the past six months. These comprised six Spur Steak Ranches, one Panarottis and one John Dory’s restaurant.

In the second half of the year, seven new restaurants are planned in South Africa. Internationally, new Spur outlets are scheduled to open in Derby in the United Kingdom, Lusaka and Nairobi. Further opportunities are being evaluated in Africa, the United Kingdom and Ireland.

On the outlook for the second half of the year, Van Tonder said the economic environment is expected to remain challenging in 2009.

“While declining interest rates, the tax relief granted in the recent Budget, lower fuel prices and an easing of food price inflation are positive factors for consumer spending, it is anticipated that disposable income levels will remain under pressure.”

“The group is determined to continue to enhance its value proposition to encourage increased foot traffic across all its brands,” he said.

Ends

Issued by Tier 1 Investor Relations on behalf of Spur Corporation

For further information kindly contact

Pierre van Tonder
Spur Corporation
Tel (021) 555-5100

 

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