Markets on Friday welcomed Spur Corporation’s sizzling results, bountiful dividend to shareholders and as it said it was “cautiously optimistic about trading for the remainder of the financial year”.
Its shares rose 2.13% to R24.
Spur’s results have been on an upward trend after Covid-19 national shutdowns wrecked its revenue and the local restaurant sector was bought to its knees.
In its results for the six months ended December 31, 2022, the group which owns Spur, Panarottis, John Dory’s, and RocoMamas brands, said on Friday that its profit grew by a whopping 182.9% year on year to R117.1m.
Revenue increased by 35% to R1.5 billion as group profit before tax more than doubled to R168 million.
Headline earnings rose by a massive 191% to R112m with the group declaring a dividend of 82c per share, about 67% higher than the prior period.
Due to the stellar performance, the group hiked its interim dividend more than two-thirds year on year to 82c, amounting to R74.62m. The dividend has been declared from income reserves.
Spur Group CEO Val Nichas said: “Increased tourism in the Western Cape contributed to our sales growing by 31% in the province. We also experienced strong growth in restaurants in high-traffic national locations, such as OR Tambo International Airport, and major shopping malls, including Canal Walk, V&A Waterfront, and the Mall of Africa.”
However, South African market conditions remained challenging in the reporting period with higher inflation and a dramatic increase in the level of load shedding hours, which directly impacted the supply chain.
“Despite the mounting pressure on disposable income, the group continued to attract customers to restaurants with its distinct and differentiated value proposition,” it said.
Spur said its group’s 2023 financial year started with a remarkable performance in July 2022 in absolute terms and the group traded consistently, with another peak in sales in December 2022.
“Increased tourism in the Western Cape resulted in sales growth of 31% in the province. Restaurants in high-traffic national locations experienced strong growth. Several restaurants in casinos and resorts delivered higher than expected results,” it said.
The group’s footprint rose to 642 restaurants in 13 countries at the end of December 2022 compared to 2022’s 631.
In South Africa, 18 new restaurants were opened during the period, and nine closed. Four new restaurants opened internationally.
And it plans to open 17 new restaurants in the second half of the financial year.
Looking ahead, Spur said South Africa was experiencing its most severe load shedding ever.
“The plan by many companies to address their own power requirements and reduce pressure on the national power grid is encouraging,” Spur said.
It said consumer disposable income among the group’s core middle-income target market was likely to reduce further as a result of higher food, fuel, and electricity costs, rising interest rates and persistent load shedding.
“The group is cautiously optimistic about trading for the remainder of the financial year and will continue to navigate the current market challenges by exploring options for innovation, value, and experience,” it said.
BUSINESS REPORT