Sales update for the year ended 30 June 2020
Spur Corporation Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/000828/06)
Share code: SUR
ISIN: ZAE 000022653
(“Spur Corporation” or “the group”)
SALES UPDATE FOR THE YEAR ENDED 30 JUNE 2020
Spur Corporation’s total franchised restaurant sales declined by 21.7% to R6.0
billion for the year to 30 June 2020, as the Covid-19 global pandemic and
resultant trading restrictions in all countries of operation hampered trading in the
last four months of the financial year.
Sales from franchised restaurants in South Africa decreased by 22.3%, with
sales from international restaurants decreasing by 16.7% in Rand terms. As local
restaurant sales comprise 88.5% of the group’s total restaurant sales, the trading
restrictions in South Africa had the biggest impact on the group’s trading
performance.
As advised to shareholders on SENS on 13 May 2020, all South African
restaurants ceased trading at the commencement of the nationwide lockdown on
27 March 2020, with turnovers declining significantly in the weeks leading up to
the lockdown. Restaurants could commence trading on a delivery-only basis
from 1 May 2020, with collection service being permitted from 1 June 2020. Full
sit-down service could be resumed on 29 June 2020. The group allowed
franchisees to reopen at their discretion under the various levels of trading
restrictions, ensuring that franchisees made decisions that were in their best
financial interests. Since 1 May 2020, franchisees have been required to comply
with strict safety protocols to minimise the risk of transmission of the virus to
customers and employees.
The table below illustrates trading patterns of the group prior to March 2020, and
the impact of the various levels of trading restrictions referred to above from May
2020.
Franchised restaurant sales for the year ended 30 June 2020
Total
Total restaurant
restaurant sales – 8 Total Total
sales – 12 months to restaurant restaurant
months to February sales – sales –
June 2020 2020 May 2020 June 2020
(% change) (% change) (% change) (% change)
Spur Steak Ranches (22.5) 6.1 (91.2) (87.2)
Pizza and Pasta (24.7) 3.1 (88.9) (82.8)
(Panarottis & Casa
Bella)
John Dory’s Fish Grill (24.5) 5.9 (95.7) (89.0)
Sushi
The Hussar Grill (19.6) 11.9 (99.8) (97.5)
RocoMamas (17.6) 6.8 (52.9) (53.2)
Nikos Coalgrill Greek* (19.1) 11.0 (84.8) (73.1)
Total South African (22.3) 6.0 (87.2) (83.6)
operations
Total international (16.7) 4.0 (73.2) (39.4)
operations
Total group (21.7) 5.8 (85.7) (79.0)
* Nikos Coalgrill Greek was acquired on 1 August 2018
During the year, 21 restaurants were opened in South Africa (most of which
opened prior to the lockdown) and 17 closed, while 18 restaurants were opened
and 11 closed internationally. At 30 June 2020, the group’s restaurant base
comprised 631 (June 2019: 620) outlets, including 84 (June 2019: 77) operating
outside of South Africa.
Restaurants trading at 30 June 2020 following the introduction of level 3
lockdown in South Africa from 1 June 2020 and the relaxation of trading
restrictions to permit sit-down trade with effect from 29 June 2020:
SA
SA restaurants
restaurants trading – Total SA
trading – sit delivery/take restaurants Total SA
Brand down out – trading restaurants
Spur Steak Ranches 204 6 210 298
Pizza and Pasta 32 24 56 91
(Panarottis & Casa
Bella)
John Dory’s Fish Grill 33 3 36 52
Sushi
The Hussar Grill - 5 5 22
RocoMamas 59 2 61 75
Nikos Coalgrill Greek 3 3 6 9
Total 331 43 374 547
It is anticipated that the number of local restaurants trading will increase from 374
at 30 June 2020 to 495 by the end of July 2020, with most operating a full sit-
down service.
The group’s international restaurants were also impacted by varying levels of
trading restrictions and as at 30 June 2020 78 of the 84 restaurants outside
South Africa were trading to some extent again.
Chief executive, Pierre van Tonder, commented: “After the limited relaxation of the
trading restrictions following the hard lockdown in April, trading has proved
particularly challenging. The restrictions on the sale of alcohol, and the curfew
imposed on all South Africans, together with customer anxiety about contracting
the virus and growing personal financial stress, has had a detrimental impact on
our business.”
“In these times of financial hardship, our customers have understandably become
extremely price sensitive and we are responding by providing customers with a
compelling value proposition across all our brands. Our ongoing partnerships with
third-party delivery services Mr D Food and Uber Eats have also been key in
driving customer support.”
“Our primary focus at this time is on supporting our franchisees. We are
discounting franchise and marketing fees and granting extended payment terms
for certain debts. We expect to continue discounting fees until our franchisees
experience meaningful increases in restaurant turnovers.”
“The re-introduction of a total ban on alcohol sales in July together with the curfew
will negatively impact trading. The grim economic outlook for the country is also
likely to result in a protracted period of recovery for the restaurant industry. In this
environment, we will continue to capitalise on the strength of our brands and
remain committed to delivering quality, excellent service and value to our
customers.”
Covid-19 has had a significant impact on the group’s revenue and earnings for the
year. The group is currently finalising the preparation of its financial results and
plans to issue a trading statement on SENS including the anticipated range of the
decrease in headline earnings per share and earnings per share once it has
reasonable certainty on the financial performance for the year. It is anticipated
that earnings per share and headline earnings per share are likely to decline by at
least 40% relative to the prior year.
The financial information in this sales update has not been reviewed or reported
on by the group’s independent auditor. Shareholders will be advised in due
course of the date on which Spur Corporation’s results for the year ended 30
June 2020 will be released on SENS.
Cape Town
23 July 2020
Sponsor
Sasfin Capital
A member of the Sasfin Group
Date: 23-07-2020 12:00:00
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