Spur posts full-year profit, despite group revenue declining
Improved performance in the second half of the year led to Spur Corporation reporting a rise in profit for the full-year ended June 30.
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 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.
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 for the reporting period, pulled down by the concessions and marketing fees the company granted franchise partners for an eight-month period.
The group’s RocoMamas fast casual offering performed well despite the difficult trading conditions and reported a 13.1% increase in sales because of the high proportion of takeaways and deliveries; this is higher than the growth of 2.7% reported by its mother brand, Spur.
In June the company opened their first Spur Drive Thru in Pretoria and says it will continue to invest in this format.
“The group will continue to expand this convenient and lucrative channel to meet customer requirements for their favourite meals through accessible channels,” the company said in a statement.
They also launched their virtual kitchen (VK) brands during the first lockdown in 2020 which has grown significantly in a year.
“The virtual kitchen (VK) brands launched during the first lockdown in 2020 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,” the company said.
Spur said it will not be issuing a dividend for the 2021 full-year period, but instead will issue a deferred dividend of 78 cents per share.
This dividend was the interim dividend for the previous year ended June 30, after the payment was delayed as a precautionary measure following the Covid-19 outbreak. This was aimed at preserving the group’s cash reserves.