Spur H1 profit to double, as the taste for restaurants stays strong

Owner of family restaurant and franchise group, Spur Corporation, is looking forward to healthy earnings for the six months ended December, forecasting almost double that reported in the previous year.

Earnings were supported by increased foot traffic at its restaurants.

The group, which owns Spur, Panarottis, John Dory’s, RocoMamas as well as speciality brands such as The Hussar Grill, Casa Bella and Nikos, says it expects headline earnings per share (Heps) to rise up to 98% to 138.28 cents.

This comes despite businesses in the country facing tough market conditions as a result of Eskom’s energy generation crisis as well as a tougher inflationary environment that is eating away at consumer buying power.

“Despite the mounting pressure on disposable income, the group continued to attract customers into restaurants with its distinct and differentiated value proposition,” Spur said in a trading statement on Thursday.

“Restaurant brand relevance and appeal, supported by enhanced customer experience, resulted in increased footfall over the period with a peak in December.”

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Sales growth

According to the group’s business update, the half-year period saw 31.5% growth in sales, led by the speciality brands segment in particular, followed by Spur and Panarottis.

“The improved trading performance, together with improved performance by the retail company stores, led to a continued strong recovery in both group revenue and profit.”

The group noted the inclusion of a once-off income tax charge of R13.996 million as well as non-deductible interest on tax liabilities of R8.038 million, related to a dispute the group had with country’s revenue collector.

“These charges followed the final resolution of the group’s dispute with the South African Revenue Service (Sars) in October 2021 over the treatment of its 2004-2009 share incentive scheme, as detailed in the group’s Sens announcement dated 18 October 2021.”

The market reacted positively to the group’s update, with the stock jumping 7% higher during morning trade and levelling out at almost 4% higher after lunchtime.