SOUTH AFRICA – South Africa based fast–food chain operator, Spur Corporation has reported improved full year performance, a sign of a slow but positive recovery.
The group which owns sit-down restaurant brands like Spur, Panarottis, John Dory’s and the Hussar Grill – as well as fast food and fast causal brand RocoMamas, saw its headline earnings per share for the year ended June 2021 increase by 33.1% to 110.74 cents per share, from reporting a loss of 82.76 cents per share in the previous year.
The JSE-listed company also reported a 16% rise in profit before income tax, to R148.2 million (US$9.85m).
The restaurant and hospitality sector has been hard hit by the Covid-19 pandemic which ushered in strict lockdown restrictions.
Limited seating, shorter trading hours and the recurring alcohol ban were just some of the restrictions that created a tough trading environment for the sector. Sit-down restaurants felt the pinch even more than fast food brands.
Despite the increase in profit and the improvement in total group sales, the Spur group reported a 10.5% decrease in revenue to R681.4 million (US$45.27m) for the reporting period, pulled down by the concessions and marketing fees the company granted franchise partners for an eight-month period.
Revenue from the South African operations accounted for 95.8% of total group revenue, declined by 10.5% while its international revenue dipped by 11.5%.
According to the report, franchise revenue only increased at RocoMamas, as the product mix is more conducive to takeaway and delivery trade, which has been a critical market during lockdown conditions. Revenue in this brand increased by 12.9% coupled by 13.1% rise in sales.
However, other brands, registered a fall in top-line earnings i.e., 7.0% decline in Spur, 15.3% in Panarottis and Casa Bella, 19.3% in John Dory’s, 5.7% in The Hussar Grill and 29.7% in Nikos.
Meanwhile, Spur’s manufacturing and distribution division increased turnover by 4.7% due to a strong recovery in the second half.
The higher restaurant sales, along with a price increase of 10.2% in November 2020, allowed for an improved contribution by the group’s manufacturing operations. Sales of retail sauces grew by 6.7%.
During the period under review, the group opened its first Spur Drive Thru in Pretoria, which was well received by customers.
Spur has indicated that it will continue to expand this convenient and lucrative channel to meet customer requirements for their favourite meals
Also, it launched the virtual kitchen (VK) brands which have continued to gain traction, generating turnover for the year equivalent to the group’s smaller brands.
At the end of June 2021, 302 of the group’s restaurants were participating in the VK brand offering.
A new RocoMamas restaurant in Dainfern in Gauteng was created to offer a single collection point for its VK brands, BENTO and RibShack Rocofellas, as well as for third-party aggregators Mr D and Uber Eats.