Spur raises dividend by almost a quarter after profit windfall
Group profit rose almost a fifth in Spur’s half-year to end-December, with the balance sheet benefiting from an exit by Grand Parade Investments
Restaurant group Spur, the owner of RocoMamas and John Dory’s, upped its interim dividend to end-December by almost a quarter, with profits receiving a boost after its black empowerment partner sold off a stake in 2019.
The group’s profit rose 27.1% to R116.7m, lifted by the recovery of an impairment provision of R10.8m related to its transaction with Grand Parade Investments, which ended in October 2019. Grand Parade had sold its 10% stake in Spur as part of an exit of various food ventures as it seeks to reduce the discount to its net asset value per share.
Group CEO Pierre van Tonder said total franchised restaurant sales across the local and international operations increased by 4.5% to R4.1bn, blaming load- shedding for disrupted trading patterns and foot traffic.
The group reported that SA’s middle-income consumers had come under additional strain due to SA’s weak economy, while load-shedding also took its toll.
“In response to these sustained power outages, our franchisees across the group are investing in installing generators in their restaurants, with approximately 80% of outlets now able to trade during load shedding,” said Van Tonder.
RocoMamas grew restaurant sales by 6.4%, John Dory’s 6.6% and Panarottis and Casa Bella grew sales by 1.5% with the latter hit by aggressive discounting in the takeaway pizza market. The Hussar Grill continued to demonstrate the resilience of higher-income customers as the steakhouse brand grew sales by 9.2%, the group said.
Spur expanded its restaurant base to 642 after the net opening of 22 new outlets in the first half of the year, and is planning further expansion. Over the next six months the group plans to open 17 restaurants outside of SA, “with our international expansion focusing primarily on Africa and the Middle East”, Van Tonder said.
Six new restaurants are planned for Zambia, three in Saudi Arabia, two each in Nigeria, Kenya and Eswatini and one each in Zimbabwe and Ghana.
Spur upped its dividend 23.8% to 78c per share.
In morning trade on Thursday Spur’s share price was unchanged at R24.50, having risen 12.39% over the past 12 months.