Eating out booms in South Africa
Listed food and restaurant group Spur has seen a substantial increase in profits and sales in the first half of the year.
In a trading statement for the year ended 30 June 2023 (FY23), the group said that its total franchised restaurant sales jumped by 23.0% for the whole financial year compared to FY22.
“Although economic conditions remain challenging in the face of higher inflation and severe pressure on consumer disposable income, the group’s business model continues to demonstrate its resilience,” the group said.
The group added that its sales increased by 15.1% in the first six months of 2023 compared to the same period in FY22.
“In this constrained consumer trading environment, the group accelerated its marketing activity and amplified brand awareness with value-added campaigns, engaging sponsorship activity and outdoor exposure that resulted in an increase in restaurant foot count of 13%,” the group said.
“Restaurants remained focused on product quality and enhanced customer experience, which increased customer loyalty and spend.”
The group’s expected sales growth is below:
Profit
Amidst the group’s improved sales, it is expecting a substantial increase in Earnings Per share (EPS) and Headline Earnings per share (HEPS).
The group said that it expected HEPS to increase from 144.22 cents in 2022 to 256.70 – 263.92 in 2023 – a 78% to 83% increase.
The group’s expected earnings are below:
“The improved trading performance, together with the high growth achieved by the retail company-owned stores, led to a continued strong recovery in both group revenue and profit,” the group said.
It added that its results in the prior financial year were affected by a once-off payment of R22 million regarding a SARS dispute.
The group said it will release its results for the year ended 30 June 2023 on 22 August 2023.
Expanding
Last month, Spur announced that it will acquire a 60% interest in Doppio Zero, Piza e Vnio and Modern Taulors. This will include close to 40 franchised and company-owned restaurants and Doppio Zero’s bakery and central supply business.
Spur said that it is acquiring the stake to expand into markets where it is not fully represented.
“Doppio Zero has extensive expertise in the bakery and coffee speciality market and offers a bespoke day and evening dining experience. Piza e Vino complements the group’s Italian offering provided by Panarottis (78 restaurants) and Casa Bella (6 restaurants),” the group said.
Read: How much it costs to open a top fast-food franchise in South Africa
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