Strong sales growth lifts Spur Corp earnings by 35%
March 7, 2013
Cape Town – Strong sales growth across its local and international restaurants
saw Spur Corporation report a 35% increase in diluted headline earnings per
share to 90 cents in the six months to December 2012.
The interim dividend was increased by 37.5% to 55 cents per share.
Group revenue increased by 40% to R332 million, with franchise revenue in Spur
Steak Ranches increasing 17%, Panarottis Pizza Pasta by 32% and John Dory’s
Fish Grill Sushi by 7%. Revenue also benefited from the inclusion of the
DoRego’s takeaway chain acquired with effect from 1 March 2012.
Chief executive, Pierre van Tonder, said an aggressive promotions strategy,
increasing customer loyalty and robust Christmas trading resulted in the group
growing its market share in the highly competitive family sit-down restaurant
Total restaurant sales across the group increased by 17.5% for the six month
period. Sales in South Africa grew by 16.5% and in the international operations
by 26.4% in Rand terms.
Van Tonder said growth in Spur was driven by “the continued success of the
breakfast and weekday promotions, and increased demand for the brand’s
quality, good value offering. The Spur Family Card continues to foster loyalty in
our brand and membership increased to over 1.4 million, accounting for 29% of
Spur’s turnover in the period”.
Panarottis boosted turnover through ongoing weekday promotions, new and
refurbished outlets and the introduction of a new menu. John Dory’s continues to
benefit from targeting promotions at quieter trading periods.
“The integration of the DoRego’s franchise chain continues to gain momentum
and nine new outlets were opened,” he said.
Manufacturing and distribution revenue rose by 86%, lifted by the first-time
inclusion of the revenue from the DoRego’s distribution centre and higher product
volumes in the group’s sauce manufacturing facility and outsourced distribution
network owing to strong local restaurant sales.
International revenue, comprising franchise revenue and company-owned
restaurant turnover, increased by 27%. “Spur bucked the trend in the depressed
UK restaurant economy and posted a pleasing growth in turnover. Africa
continues to deliver stable growth while trading conditions have remained static
in Australia,” said Van Tonder.
Spur Corporation’s restaurant footprint was expanded to 471, with 422 outlets in
South Africa and 49 across the international operations.
In South Africa, 23 new stores were opened in the past six months. International
expansion continued to focus on Africa, with new outlets opening in Kenya and
Mauritius, bringing the presence in Africa and Mauritius to 34 (2011: 24)
On the outlook for the remainder of the financial year, Van Tonder said the group
is actively pursuing new marketing promotions to maintain the current sales
momentum and to grow market share.
“The Spur Family Card will be used to drive loyalty by increasing average spend
per customer and the frequency of visits, and to attract additional foot traffic,” he
Eleven new Spur restaurants, one Panarottis and two DoRego’s outlets are
planned to be opened in South Africa in the next six months. Expansion in the
international operations will include second Spur restaurants in Tanzania, Nigeria
and Swaziland, as well as a DoRego’s outlet in 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