Spur saw a significant increase in earnings and profit for its 2023 financial year on the back of impressive sales growth at its restaurants.
Spur released its full-year results for the year ended 30 June 2023 today, which revealed solid results.
The company saw its franchised restaurant turnover increase by 23.0% to R9.52 billion compared to the 2022 financial year.
In H1 2023, Spur’s franchised restaurant sales grew by 31.5% compared to H1 2022.
“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,” Spur said.
In H2 2023, restaurant sales increased by 15.1% compared to H2 2022.
This saw Spur’s earnings per share grow 80.2% to 260.03 cents, and diluted headline earnings per share grow 81.0% to 260.01 cents.
The company’s revenue is also up 27.4% to R3.05 billion from R2.39 billion the year before.
In South Africa, Spur said volume growth was mainly driven by the Spur brand, which increased restaurant sales by 24.9%.
“The Spur brand has been well-positioned to meet customers’ needs during load-shedding hours, with the grills remaining on, offering a safe place for kids to eat and play, and for parents when they are unable to feed their families at home,” the company said.
International franchised restaurant sales increased by 27.6% following improved trading conditions in the rest of Africa.
Africa – excluding Mauritius – represents 71% of the international portfolio, with solid performances in Zambia, Namibia, Kenya and Nigeria.
Mauritius represents 21% of international franchised restaurant sales.
The Spur brand represents 42% of the group’s international restaurant sales, followed by Panarottis at 33% and RocoMamas at 23%.
At year-end, the group had 639 restaurants in 14 countries. In South Africa, 22 restaurants were opened during the year, and 20 restaurants closed. Ten restaurants opened internationally, and four closed.
Spur said its improved trading performance led to continued strong group revenue and profit growth.
The company’s revenue growth was supported by higher sales in the retail company stores (up 37.7%), increased sales from the manufacturing and distribution division (up 23.5%) and improved global franchised restaurant turnovers.
Group profit before income tax increased by 51.9% to R318.4 million (2022: R209.7 million).
The company noted that the prior year included a material once-off charge against earnings of R22.0 million following the resolution of a dispute with SARS regarding tax deductions claimed for the group’s 2004 to 2009 share incentive scheme as reported on SENS on 18 October 2021.
Of this charge, R14 million was reflected as an income tax expense and R8 million as an interest expense.
Spur’s profit increased by 72.2%, from R128.34 million in 2022 to R221.01 million.
Spur said its balance sheet remains ungeared, with unrestricted cash of R374.8 million as of 30 June 2023.
“While trading conditions will remain challenging owing to pressure on consumer spending in the weak macroeconomic climate, the group remains positive on its prospects and will continue to work closely with stakeholders in responding to the changing environment with a re-invention ethos and growth mindset,” the company said.
Spur plans to open 41 new restaurants in South Africa and 12 internationally in the new financial year.
It declared a dividend per share of 192 cents – a 51% increase from last year’s dividend of 127 cents.