Spur has hiked its interim dividend just over two-thirds after its profits and revenues soared in its half-year to end-December, with the restaurant group’s namesake steakhouse brand leading the growth charge.
The owner of brands such as Spur, RocoMamas, Panarottis and John Dory’s said revenue grew 35% to R1.5 billion and group profit before tax more than doubled to R168 million. Headline earnings rose 191% to R112 million with the group declaring a dividend of 82c per share, about 67% higher than the prior period.
The group had previously flagged the outperformance in an update earlier this month, which analysts said indicated Spur was gaining market share. Its shares reacted strongly, soaring almost 4% on the day.
By 10:15 on Friday, however, shares in Spur were up only 0.85% to R23.70, suggesting the good news had now been priced into the share.
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Spur said increased tourism, particularly in the Western Cape gave it a boost, with several restaurants in casinos and resorts delivering higher-than-expected results.
The increase in power outages and scheduled load shedding, about 208 days in 2022, placed pressure on franchisee operating costs with higher diesel and generator maintenance costs. But, at the end of December, 90% of restaurants had generators or were linked to shopping mall central generators, and this has since increased to 95%.
CEO Val Nichas said in a statement that the group’s customer count had risen by 21% even as South Africans experienced increasing pressure on their wallets.
As far as its prospects for the second half, Nichas said the company’s core middle-income target market would find their disposable incomes under more pressure because of higher food, fuel and electricity costs.
At the same time customers would also be squeezed by the rising interest rate environment and load shedding. Despite this, the company was “cautiously optimistic” about the second half.