Spur Steak Ranches (South Africa) Continues International Expansion
13 Sep 2019 - Spur Corporation continued to increase its geographical footprint and added 39 new outlets during the year to end June.
This was despite a dour South African economy, weak economic conditions abroad and high operating costs in Australia.
The group opened its first restaurants in India and Cyprus, both RocoMamas outlets, while The Hussar Grill opened its first restaurant in Saudi Arabia.
As at the end of June, Spur boasted 620 restaurants, including the acquisition of six Nikos Coalgrill Greek restaurants in August last year.
The multi-brand restaurant franchisor is not planning to slow down in the next financial year as it intends to add more than 20 new restaurants, including at least 11 in South Africa and 10 international restaurants.
The group said the international expansion would focus primarily on Africa and the Middle East, with three RocoMamas outlets in Saudi Arabia and new restaurants in Kenya, Nigeria, Mauritius, Zambia and Zimbabwe.
The new outlets were instrumental in lifting the group's headline earnings by 10.2 percent to R165 million during the year.
Its total franchised restaurant sales increased by 7.2 percent to R7.6 billion, while group revenue increased by 5.9 percent to R945m.
Headline earnings per share increased by 10.8 percent to 173.68 cents a share and the group increased its dividend by 10.6 percent to 136c.
Chief executive Pierre van Tonder said franchised restaurant sales in South Africa grew by 6.2 percent as the group's middle-income customer base came under increasing pressure in the slowing economic climate.
“In this constrained spending environment we continue to focus on enhancing the margins of our franchisees to ensure a more sustainable franchise business,” Van Tonder said.
Spur Steak Ranches restaurant sales increased by 5.4 percent and the Hussar Grill’s higher income customers continue to be resilient and the brand grew restaurant sales by 13.4 percent.
RocoMamas increased its restaurant sales by 7.5 percent while John Dory's increased restaurant sales by 4.6 percent.
Panarottis and Casa Bella grew restaurant sales by 0.9 percent as the Panarottis chain continued to be impacted by aggressive discounting in the pizza takeaway market.
The group said international restaurant sales increased by 12.3 percent, benefiting from the opening of a record 20 restaurants during the year, but this was offset by a 15.9 percent sales decline in Australia and New Zealand.
“Trading in Africa, Mauritius and the Middle East remains strong, while trading in certain African countries including Namibia, Kenya and Lesotho was slower,” Van Tonder said.
Spur shares rose 2.50 percent on the JSE yesterday to close at R22.55.