Spur Corporation continues to be negatively impacted by COVID-19 reporting 29.5% decline in sales

SOUTH AFRICA – South Africa based fast–food chain operator, Spur Corporation has reported a 29.5% decline in sales to R2.9 billion (US$193 million) for the six months ended December 31, from R4.1 billion (US$273.4m) in the same period a year earlier, due to COVID -19 trading restrictions and lower consumer disposable incomes.

Sales from franchised restaurants in South Africa declined by 31 percent with sales from international restaurants decreased by 17.3 percent in rand terms.

South Africa’s restaurant sector has been one of the hardest hit industries by the COVID-19 pandemic as lockdown restrictions, curfews, cuts in seating capacity and a ban on the sale of alcohol have hammered profits, pushing some out of business.

“Continued Covid-19 pandemic lockdown trading restrictions, although at reducing levels in the first half of this reporting period, further exacerbated by the onset of the second wave of the pandemic and the resultant implementation of revised level 3 restrictions in the key trading month of December 2020, curtailed franchised restaurant sales in the six months to December,” the group said.

John Dory’s Fish Grill Sushi sales declined the most by 40.1% with RocoMamas reporting the lowest decline in sales of 15.3%

Restaurant turnover for the month of December 2020 in South Africa declined by 25.8% compared to December 2019, while international turnover decreased by 11.1% in Rand terms for the same period.

Pleasingly, a steady post-lockdown recovery in restaurant sales month-on-month was reported across most of the group’s brands in the first four months with a strong October trading month.

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Looking at brand performance, John Dory’s Fish Grill Sushi sales declined the most by 40.1 percent with RocoMamas reporting the lowest decline in sales of 15.3 percent.

In Spur Steak Ranches, sales declined by 31 percent, while Pizza and Pasta sales were 36.6 percent lower and The Hussar Grill sales were down by 37.6 percent.

The group opened 17 restaurants in South African and closed 18 during the period while seven restaurants were opened and four were closed internationally in the same period.

Its restaurant base consisted of 633 outlets at the end of December, which includes 87 outlets operating outside of South Africa.

The company’s interim results for the six months ended 31 December 2020 are to be released on 2 March 2021.

In its full year results ended 30 June 2020, the steakhouse franchise restaurant registered a 19.4% decline in revenue to R761.6 million (US$49.75m) resulting from dwindling sales impacted by the COVID-19 disruptions.

Its headline earnings decreased by 56.1% to R72.5 million (US$4.7m) with diluted headline earnings per share 52.1% lower at 82.96 cents.

According to the fast-food chain, revenue from its South African operations, which accounted for 95.7% of total group revenue, decreased by 19.3% while international revenue declined by 20.9% mainly due to the weak performance from the Australian operations.

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