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Spur Boosts Interim Diluted Earnings per Share

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Spur Boosts Interim Diluted Earnings per Share

Spur Boosts Interim Diluted Earnings per Share

Franchise restaurant group Spur Corporation (SUR) reported diluted earnings per share (HEPS) of 66.49 cents for the six months ended December 2011, up 20.3% from the previous period.
The group increased headline earnings by 19.4% to R58.2 million.

An interim dividend of 40.0 cents per share was declared, 21.2% higher than the previous year.

Revenue was up 16.2% to R236.2 million and the group’s profit before tax for the six months stood at R88.4 million from R72.9 million, while operating profit before finance income grew by 20.5% to R85.1 million.

Managing director, Pierre van Tonder, said the performance was driven mainly by strong Christmas trading, increased customer loyalty and promotional campaigns across the three franchise brands.

“Membership of the Spur Family Card loyalty programme has more than doubled to over 720,000 in the past six months.

“At the same time, the customer spend per head as well as the volume of foot traffic in Spur has also increased,” he said.

Franchise revenue in Spur increased by 12.4% to R78.9 million, Panarottis by 6.9% to R6.4 million and John Dory’s by 10.2% to R5.5 million.

Corporate services and other income grew by 29.8% to R12.6 million, and manufacturing and distribution revenue rose by 10.9% to R60.9 million, the company said.

While trading conditions remained tough offshore, franchise revenue and restaurant turnover from the international operations increased by 25.1% to R71.9 million, Spur Corporation said.

The group expanded its restaurant base to 371 in the period under review.

Shortly before the end of the reporting period, Spur Corporation announced the acquisition of the DoRego’s fast food restaurant franchise and distribution centre, with effect from today, 1 March.

DoRego’s is a value take-away chain offering chicken, seafood and burgers through 75 franchised outlets.

“DoRego’s will give the group exposure to the fast growing lower to middle income segment of the quick service restaurant market,” the company said.

“We expect a seamless integration of DoRego’s and plan to capitalise on the regional brand awareness to expand the current footprint nationally.”

It added that following the acquisition of the remaining 35% shareholding in John Dory’s in January this year, the brand was now wholly-owned and well poised for growth under the new management team.

Looking ahead, Spur Corporation said six Spur, three Panarottis and five John Dory’s restaurants were expected to open during the second half, with 38 restaurants due to be refurbished across the three brands.

“International expansion will focus on Africa, with franchised Spur restaurants planned for Nigeria (Lagos), Zambia (Lusaka), Kenya (Nairobi) and Botswana (Gaborone), while the first franchised Panarottis outlet will be opened in Gaborone,” it added.

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