The Spur Corporation has published its annual financial results for the year ending 30 June 2021, with the group positive about 2022 as South Africa’s Covid-19 vaccination efforts pick up.
Group revenue declined by 10.5% to R681 million. This was due to concessions granted on franchise and marketing fees to franchisees for the first eight months of the financial year as well as lower sales in company-owned restaurants.
However, profit before income tax increased by 16.0% to R148.2 million, while headline earnings per share increased by 33.1% to 110.74 cents.
Other key financials include:
- Total franchised restaurant sales up 1.0% to R6.0 billion
- Comparable profit before income tax declined by 18.6%
- Deferred interim 2020 dividend of R70.978 million to be paid 25 October 2021
- Diluted headline earnings per share 33.0% higher at 110.37 cents
- Cash and cash equivalents up R95.6 million to R260.9 million
- Net asset value per share up 18.6% to R7.56
“The macro-economic impact of Covid-19, and the resultant erratic trading restrictions imposed in South Africa and globally, continue to create uncertainty in the restaurant industry,” it said.
“New restaurant turnover trends, therefore, emerged that were closely aligned to these changing consumer requirements and ongoing government regulation of seating capacity, takeaway/deliveries only and curfew hours.”
Despite the continuation of these difficult trading conditions, the group’s casual dining restaurants were better positioned to manage deliveries and takeaways, it said.
“Loyal customers were more responsive to convenience channels such as click and collect, and, overall, the second half of the F2021 trading year produced improved results that indicate a slow, but positive, recovery.”
Drive-thrus and ghost kitchens
The first Spur Drive Thru was opened in Pretoria in June 2021 and has been well received by customers, the corporation said.
“The group will continue to expand this convenient and lucrative channel to meet customer requirements for their favourite meals through accessible channels,” it said.
The drive-thru, situated in Karenspark in Pretoria, offers meals that are traditionally sold at its restaurants including burgers, chicken wings, ribs and onion rings.
The menu also includes more snack-focused items including in-hand breakfasts and roadhouse-style desserts. Alongside the drive-thru is a traditional Spur restaurant where customers can have a sit-down meal.
Spur also launched its virtual kitchen (VK) brands during the first lockdown in 2020, with these continuing to gain traction and generating turnover for the year equivalent to the group’s smaller brands, it siad.
A virtual restaurant or ‘ghost kitchen’ operates from an isolated kitchen space without a storefront, and diners will use online ordering and food delivery apps.
“At the end of June 2021, 302 of the group’s restaurants were participating in the VK brand offering,” the Spur Corporation said.
“A new RocoMamas restaurant in Dainfern in Gauteng was created to offer a single collection point for its VK brands, BENTO and RibShack Rocofellas, as well as for third-party aggregators Mr D and Uber Eats.”
The Covid-19 pandemic has increased consumers’ reliance on technology, it said. “Online options to have meals delivered to customers in a contactless manner is becoming the norm.”
“Related new trends and technologies include contactless delivery, contactless payments, digital/online ordering, QR codes, ghost/virtual kitchens and contactless dining experiences. Innovations will be developed around the future needs of customers to ensure the group remains ahead of global and local lifestyle changes.”
In line with the refocused strategy, to dominate with brands leading the experience, the group plans to open 32 new restaurants in South Africa and seven internationally in the 2022 financial year.