Spur’s earnings grow 14% this year as it banks on new technology opportunities

SOUTH AFRICA – The South African steakhouse franchise restaurant chain, Spur Corporation has posted a 14% rise in headline earnings per share (Heps) from continuing operations and is banking on technology platforms such as Uber Eats and Mr Delivery for services to expand its customer base, reports Business Day.

While comparable Heps were down by 9.5%, revenue from continuing operations increased by 3 percent to US$43.70 million, up from US$42.44mn.

Spur’s results for the year to end June showed that total franchised restaurant sales across the local and international operations increased by 0.6% to US$471.94 million, and by 1.3% to US$465.39 million excluding the results of the Captain DoRego’s chain, which was sold with effect from March 1.

According to Chief executive Pierre van Tonder, the business was influenced by pressure on customer spending resulting in a decline in restaurant and shopping centre foot traffic, with the middle-income customer base under increasing financial pressure.

“Our focus in this environment will be on retaining and growing our customer base through our product quality, value, customer experience and innovation.

“We also plan to increase market share by capitalising on the growing opportunity through delivery services, which are becoming increasingly popular across all brands, including Uber Eats and Mr Delivery, as well as call and collect,” Van Tonder said.

According to him, the period suffered from weak economic growth in South Africa as a result of political concerns and policy uncertainty in addition to a volatile exchange rate, rising unemployment, increased pressure on consumer disposable income and low levels of consumer confidence.

Although the firm sold 43 Captain DoRego’s outlets and closed 18 restaurants, it opened 44 new outlets across all brands, excluding Captain DoRego’s, in South Africa.

During the period, 10 outlets were revamped, four relocated to better trading locations while 11 more international outlets were opened including RocoMamas in Australia.

Spur bought a 51% stake in Nikos Coalgrill Greek chain with a focus on expanding to about 50 restaurants nationally over the next few years.

In the first half of the year, Spur reported 25.9% decline in headline earnings to US$10.28 million partly blamed on a racial spat at the restaurant.

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