Spur has seen a jump in profits, with a significant increase in retail sales thanks to purchasing a majority stake in the Doppio Collection.
In its results for the year ended 30 June 2024, Spur said that it traded out 71 restaurants in 15 counties (2023: 639).
27 new restaurants were opened during the period, while nine closed. 11 new restaurants opened
internationally, and four closed.
37 restaurants were also added to the group’s portfolio after a 60% share in the Doppio Collection was acquired on 1 December 2023.
Despite the tough economic environment, the group plans to secure trading sites and open 47 new restaurants in South Africa and 13 internationally in the 2025 financial year.
“Trading patterns have been volatile over the past year owing to pressure on consumer spending in the
difficult macroeconomic climate,” said the group.
“The first quarter of the reporting period delivered a strong performance off a high base. While the
slower trading patterns marked the second quarter; restaurant turnovers were boosted by robust
trading in December 2023.”
“The second half of the financial year continued with slower trading volumes. A positive upturn in trade was experienced in June during the mid-year school holidays.”
Although mounting pressure has been on customers’ disposable income, the group continued to attract customers, with a record high of 3.1 million active Family Club members recorded in the financial year.
“The Spur brand’s voucher redemption rate of 78% is evidence that consumers are seeking value and rewards for their strained disposable income. Customer count numbers remain unchanged on the previous year, but pleasingly average-spend-per-head grew above menu price inflation,” said the group.
The trading performance led to solid growth in both group revenue and profit.
The revenue growth was supported by improved franchised restaurant turnovers and increased sales from the manufacturing and distribution division, which grew by 9.9% (8.7% excluding Doppio Collection).
The growth in the retail company stores increased by 119.5%, and the contribution from the Doppio Collection restaurants had a positive impact.
However, revenue from retail company stores reports a decline of 4.7% when excluding the Doppio Collection, as two fewer stores traded in FY2024.
Group profit before income tax grew 7.3% to R341.7 million (F2023: R318.4 million), while headline earnings increased by 10.8% to R236.1 million (F2023: R213.1 million).
The group also increased its dividend per share by 10.9% to 213 cents (2023: 192 cents).
The company’s unrestricted cash balance was R365.7 million at the end of the year (31 December 2023:
R288.0 million), with cash generation and allocation being key focus areas for the executive directors and board.
The group’s key financial metrics for the period can be found below:
- Franchised restaurant turnovers up 11.5% to R10.62 billion
- Revenue up 14.1% to R3.47 billion
- Earnings per share up 10.7% to 287.92 cents
- Diluted earnings per share up 8.7% to 281.31 cents
- Diluted headline earnings per share up 9.4% to 284.34 cents
- Dividend per share increased by 10.9% to 213 cents (2023: 192 cents)
- Profit before income tax up 7.3% to R341.7 million
- Headline earnings per share up 11.4% to 291.02 cents
- Unrestricted cash and cash equivalents on 30 June 2024 is R365.7 million
Outlook
“While South Africa’s economic growth is forecast to accelerate in the year ahead, this is unlikely to
translate into improved trading conditions in the short term,” said the group.
“Supported by a portfolio of ten distinctive restaurant brands, Spur Corporation is well-positioned to gain market share in various categories, regions and countries.”
Despite the tough economic environment, the group plans to secure trading sites and open 47 new restaurants in South Africa and 13 internationally in the 2025 financial year.
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