Spur Continues Strong Competitive Growth in Africa

"Spur Corporation delivered solid results as trading conditions became increasingly challenging in the second half of the year. The fundamentals of the group's flagship brands remain strong and continue to deliver competitive growth," it said.

"Total restaurant sales across the group increased by 13.5 per cent, with sales from existing restaurants increasing by 9.8 per cent and sales in South Africa growing by 12.8 per cent, driven by robust performers Spur and Panarottis."

The restaurant franchisor also reported revenue growth of 9.1 per cent for the year ending 30 June 2014 to 732 million rand from 671 million rand for the same period in 2013.

"Local franchise revenue increased by 11.8 per cent for the year – Spur increased franchise revenue by 10.6 per cent, Panarottis by 25.4 per cent and John Dory's by 21.8 per cent. Franchise revenue from Captain DoRegos decreased by 10.8 per cent," Spur Corporation 3.15% said.

"Operating margins in the Spur and Panarottis divisions improved for the year due to the benefits of economies of scale, while the margin in John Dory's contracted slightly as a result of the investment in resources to ensure future expansion of the brand."

According to the group, it plans to open eight restaurants internationally and ten Spur, ten Panarottis, seven John Dory's, eight Captain DoRegos and six The Hussar Grill outlets locally in the 2015 financial year.

The planned international openings are expected to include additional franchised restaurants in Namibia, Tanzania, Nigeria, Zambia and Australia.

The group's profit before income tax rose 2.7 per cent to 201 million rand in the 2014 year from 196 million rand in 2013 and its diluted earnings per share increased by 3.3 per cent from 154 cents to 159 cents.

"Economic pressures are likely to continue to dampen consumer demand in the restaurant sector in the short to medium term. Management is confident that the group will continue to deliver on its growth strategy by targeting organic growth within existing brands and markets," said Spur Corporation.

"[This while] pursuing opportunities to expand vertical integration in relation to core products. A focus for the year ahead will also be ensuring efficient and optimal resource utilisation to contain costs in an uncertain consumer environment."

SOURCE: http://www.cnbcafrica.com/markets/earnings/2014/09/11/spur-corporation-fy-sales/