Spur Corporation reports 7.2% growth in full-year sales to US$535.12m

SOUTH AFRICA – Spur Corporation, a South Africa based fastfood chains operator, reported an overall 7.2 percent growth in sales to US$535.12 million (R7.6 billion) in the year to end-June.

The group’s performance, whose brands include RocoMamas, Pizza Pasta and Panarottis, was boosted by a robust growth in the last two quarters of the period under review with overall growth driven by the John Dory’s and RocoMamas brands.

An IOL Business report indicates that Spur only managed a 1.3 percent growth during its second quarter while during the third and fourth quarters, sales grew by 7.5 percent and 6 percent respectively.

Despite subdued consumer spending which has in turn dampened growth at consumer-focused businesses, the group recorded its best performance during quarter one, where sales grew 11.3 percent.

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““The growth in the second half was supported by a recovery in the John Dory’s brand following the reopening of restaurants temporarily closed in the first half; a turnaround in RocoMamas as a result of investment in marketing in the second half,” explains Spur’s chief executive, Pierre van Tonder.

Van Tonder added that this saw a return to positive existing business growth; and the continued resilience of customers in the upper-income market- in which The Hussar Grill operates.

Franchised restaurant sales increased 6.2 percent in South Africa, while international sales further boosted the company’s performance with a 16.2 percent growth – in Rand terms.

Sales were also boosted by the addition of new outlets where the Spur opened 39 new restaurants in South Africa, in addition to the six Nikos restaurants acquired, and 20 new outlets in the international market.

Last year the group added a 51 percent stake in fast-growing Nikos Coalgrill Greek to its portfolio and has since then grown the number from six to nine. Nikos added US$4.64 million (R65.9 million) for the 11 months since acquisition.

Notably, Spur also increased its international footprints by opening its first restaurants under the brand RocoMamas in India and Cyprus during the year.

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However, the group also closed 15 outlets in the country and five internationally.

Van Tonder said the group’s main middle-income target market in South Africa remained under financial pressure, due to the ‘sombre state’ of the economy.

“Restaurant turnover for the Panarottis chain was impacted by aggressive discounting by competitors in the takeaway pizza market,” he said.

He further noted that the brand’s strategy has been a deliberate shift away from discounting to focusing on product quality and value, which has had a negative impact on turnover in the short term.

In June, Spur said it would buy back Grand Parade Investments’ (GPI) 10% stake in the steakhouse company for US$18.33 million (R260.4m).

At the end of June, the group’s restaurant base consisted of 620 restaurants, up from 575 outlets compared to last year.

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