Spur adds drive-thrus as sales decline

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Spur adds drive-thrus as sales decline

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Published Date: 2021-03-03 | Source: Stephen Gunnion | Author: Stephen Gunnion

Spur adds drive-thrus as sales decline

After reporting a big drop in first-half sales, the restaurant group is extending its format to cater for the new reality of Covid-19 dining.

Spur Corporation says the Covid-19 pandemic has continued to have a material impact on its business operations and financial performance due to lockdowns and trading restrictions in all the countries where it has restaurants. The group is now extending its trading formats with the introduction of drive-thru RocoMamas and Spur outlets as it adapts to the new Covid-19 dining reality.

Spur's new financial year started on 1 July, days after its SA restaurants were allowed to resume a full sit-down service - subject to strict social distancing protocols, restrictions on customer numbers and a ban on the sale of alcohol. It said the impact of the local curfew on evening restaurant trading hours was reflected in dinner sales for the group declining by 39%. For its upmarket The Hussar Grill, Casa Bella and Nikos Coalgrill Greek chains, dinner sales fell 48% over the six months to end-December. Group alcohol sales were also 39% lower as a result of the ban on sales for part of the period.

Although trading conditions improved between September and November as the curfew was relaxed and alcohol sales were permitted, sales were still down on the prior year. However, the imposition of adjusted level 3 lockdown restrictions in late December, and the extended curfew and another alcohol ban, impacted sales yet again.

Revenue fell 40% to R314 million and comparable profit before tax declined by two thirds to R43.1 million. Earnings per share (EPS) came in 75% lower at 31.96c and diluted headline EPS were down by the same margin at 31.88c. It ended the period with cash and cash equivalents of R178 million, up R12.8 million from a year earlier.

Following the partial lifting of restrictions in February, which allowed it to extend trading hours to 10 pm and sell alcohol, Spur said sales picked up to reach 82% of last year's levels. Spur and RocoMamas were its strongest performing brands for the month. It said President Cyril Ramaphosa's announcement on Sunday of a further relaxation in lockdown restrictions to alert level 1 was a welcome development for the group, its franchisees and customers.

It hasn't declared an interim dividend and has again deferred payment of last year's interim dividend due to the uncertain economic environment and the possibility of further trading restrictions.

Spur's shares closed 8.8% higher at R18.73 yesterday.





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