SOUTH AFRICA – South Africa headquartered fast–food chain operator, Spur Corporation, has reported 32.5% growth in revenue to R2.4 billion (US$141.3m) in the year ended June 2022.
Spur Corporation, whose brands include Panarottis, John Dory, Spur Steak, Hussar Grill and RocoMamas, says easing Covid-19 restrictions helped franchised restaurant sales slightly exceed pre-pandemic levels.
The stellar performance was also boosted by with improved franchised restaurant turnover, higher sales in the company-owned restaurants and increased sales from the manufacturing and distribution division.
This contributed to profit before income tax growing by 41.9% to R210 million (US$12.3m) and its headline earnings increasing by 31% to R121 million (US$7.13m).
Its franchised restaurant sales increased by 28.2%, being ahead of the pre-pandemic sales reported for the 2019 financial year.
Franchised restaurant sales in South Africa grew by 30.5% and by 10.3% internationally. The rest of Africa accounts for 67% of the international portfolio and solid trading performances were reported in Zambia, Namibia, Zimbabwe and Kenya.
In South Africa, growth was driven mainly by the Spur brand, which increased restaurant sales by 30.1%.
Spur represents 68% of the group’s South African sales and remains independently rated as the country’s leading casual dining chain.
Meanwhile, Panarottis, John Dory’s and RocoMamas all performed well while the speciality brands lifted sales by 52% with a strong recovery in restaurant sales in The Hussar Grill.
Spur taps on new trends including plant-based food
During the period under review, the group expanded its restaurant base to 631, with 547 outlets in South Africa and 84 across the rest of Africa, Mauritius and the Middle East.
The restaurant owner also launched a new brand in the stable, Modrockers, an innovative plant-based quick service restaurant aimed at the youthful flexitarian market.
Further to that, the online delivery-only virtual kitchen brands were expanded with the launch of Just Wingz, specialising in a range of chicken wings and capitalising on the growth trend of chicken.
The virtual kitchen brands were launched during the hard lockdown in 2020 and over 50% of the group’s restaurants are now participating in the virtual kitchen offering.
The year also saw the opening of the first RocoMamas Drive Thru in Gauteng in June 2022 and a second is planned to open at the end of August.
This follows the highly positive customer response to the first Spur Drive Thru which opened in Pretoria in 2021.
“We will continue to expand this convenient and lucrative channel to meet the needs of our customers for convenience,” said Spur Corporation CEO Val Nichas.
On the outlook for trading in the new financial year, Nichas revealed that the group plans to open 32 new restaurants in South Africa and nine internationally in the 2023 financial year.
The company is optimistic on the growth prospects for the coming year despite the economic headwinds.
“The widespread changes in the trading environment and shifting consumer trends creates opportunities for innovation, including new meal solutions, expansion of restaurant formats and alternative trading channels.
“We are taking advantage of the global trend towards convenience with the growth in e-commerce and on-demand delivery as well as expanding our ranges of plant-based and vegan menu options for health conscious and environmentally aware consumers,” she said Nichas said
Nichas said it is encouraging that South Africa’s limited services restaurant sector, which includes fast food, chain and independent restaurants, is projected to show an annual compound growth of 8.6% from 2022 to 2026, according to Euromonitor, which offers a positive outlook and an opportunity to leverage the expected growth.