The Spur Corporation plans to open 32 new restaurants in South Africa, and 9 stores internationally in its year to June 30, 2023.
The group said Friday it remained optimistic about growth, should current market conditions remain stable. Spur traded through 631 restaurants and in 15 countries by the end of June 2022.
In South Africa, 23 restaurants were opened in the past year and 15 closed.
Eight restaurants opened internationally.
The positive growth forecast was despite the group acknowledging that South Africa faces a range of economic issues, including political instability, the electricity crisis, rising inflation driven by higher fuel, food and electricity prices, and the impact of the Russia-Ukraine war on supply chain costs.
“These are likely to continue to challenge the local restaurant market by impacting the operating environment as well as consumer disposable income,” the group said at the release of its annual results for the 2022 financial year, where a final dividend of 78 cents a share was declared, bringing the total for the year to 127 cents.
The group remains ungeared, with cash of R291 million.
Group CEO Val Nichas said: “The business model continues to demonstrate resilience. The group embarked on aggressive marketing campaigns to increase brand awareness, everyday value and consumer convenience, including takeaways, click and collect services and third-party deliveries.”
During the year, franchised restaurant turnover increased 28.2 percent percent to R7.7bn, slightly ahead of the 2019 pre-pandemic year. Group revenue increased 32.5 percent to R2.4bn. Pre-tax profit increased by 41.9 percent.
In South Africa, growth was driven mainly by the Spur brand, which increased sales by 30.1 percent. Spur represents 68 percent of the group’s South African sales. Panarottis, John Dory’s and RocoMamas performed well while the speciality brands lifted sales by 52 percent with a strong recovery in restaurant sales in The Hussar Grill.
Takeaways grew by 30 percent, with the highest percentage of takeaways being in RocoMamas (57 percent) and Panarottis (39 percent) as pizza and burgers are the most popular products for takeaway and delivery.
“Increased customer foot traffic is evident in the restaurants, although new trading patterns are emerging, and these levels are erratic,” said Nichas.
Diluted headline earnings per share was 30.9 percent higher at 143.68 cents.
Trading in the second half of 2022 had continued to be strong, with a 28.5 percent increase in local restaurant sales and a 24.7 percent increase in international restaurant sales, when compared with the second half of the 2021 financial year.
“The improved trading performance together with a focus on expanding margins, and to a lesser extent the reduced level of financial support in discounted franchise and marketing fund fees required by franchisees post pandemic, led to a strong recovery in both group revenue and profit,” the group said.
BUSINESS REPORT