Tough trading hits Spur profit
Political uncertainty trims margins of steak ranches as well as brands such as Panarottis and The Hussar Grill
Tough trading conditions gnawed into Spur Corporation’s margins in the half-year to end-December, but the restaurant franchisor still has a strong appetite for expansion. Results for the six months to end-December released on Thursday showed Spur’s gross profit margin dropped from 73% in the corresponding interim period in 2016 to 71%. The operating profit margin dropped from close to 40% to less than 35% after margins of flagship Spur Steak Ranches as well as smaller brands such as Panarottis, John Dory’s, The Hussar Grill and Captain DoRegos eroded markedly. Margins of Spur, the largest component of revenue and profits, were pushed down to 84.5% from 88.5% previously. The exception was gourmet burger brand RocoMamas, which reported a 55% gain on profits to R13m with operating margins fattening to 73.3% (70.4% previously). Overall, total franchised restaurant sales from local and international operations slipped 2.6% to R3.7bn. Spur CEO Pierre van Tonder said franchised restaurant ...
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