South Africa’s Spur in expansion plan as revenues shore up

SOUTH AFRICA– Spur Corporation, a South African steakhouse franchise restaurant chain, has unveiled plans of dishing out more quick service restaurants supported by growth in its revenues posted in its recent half-year period.

Spur’s revenues increased by 5.3% to US$26.02 million during its half year period ending 31st December 2018.

The group’s performance upbeats the ongoing economic pressure in the country characterised by increasing demands on disposable income and weakening sentiment among Spurs middle-income customer base.

During the period under review, the group reported a 4.8% sales growth in its total franchised restaurant across the local and international operations to US$274.09 million. 

Additionally, its profit before tax, excluding exceptional and one-off items, increased by 12.4%, while the results were negatively impacted by impairment losses of US$549,000. 

The corporation – which includes Spur steak ranches, Panarottis, John Dory’s and The Hussar Grill, and RocoMamas, said that it has noted continued recovery in Spur Steak ranches as well as a strong performance in the Hussar Grill.

Its South Africa franchised restaurant sales increased by 5.7% with Spur Steak Ranches sales up by 6.1%, Hussar Grill sales increasing by 13.8% and sales in RocoMamas growing by 6%.

Henceforth, the group has unveiled plans of opening at least 12 new restaurants across the country in the second half of the year, including Spur Steak Ranches, Panarottis, RocoMamas and Nikos Coal Grill brands.

However, Spur has in the past financial year undergone restructuring, including resizing some of its restaurants which according to Chief executive Pierre van Tonder, was necessitated by harsh trading conditions.

He said management’s main focus during the period had been on enhancing the profitability of franchisees to ensure the sustainability of the group’s business model.

“Initiatives aimed at improving margins across the brands include expanding the range of home-made products manufactured in Spur restaurants, rationalising menu offerings, renegotiating rentals and reducing the size of restaurants where necessary,” Van Tonder said.

Despite these efforts, the group still posted a decline in headline earnings by 11.2% to US$5.9 million.

The restaurant’s recovery was helped along by a loyal customer base of 1.2 million Spur Family Card members, the corporation said.

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