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Spur H2 profit down 73%, interim dividend payment deferred

To preserve cash amid continued uncertainty due to Covid-19
Image: Moneyweb

Spur Corporation will further defer the payment of its 2020 interim dividend “until future cash flows can be predicted with a greater confidence level”. This follows erratic trading patterns due to Covid-19 trading restrictions.

Spur suspends franchise fees amid Covid-19 closures
Spur talking to financial institutions as precautionary measure

The franchise restaurant chain has been hit hard by the lockdowns. The implementation of curfews, a ban on the sale of alcohol and the required reduced seating capacity has battered its profits, prompting the company to defer paying the 2020 interim dividend for the third time. 

Spur, which operates over 600 stores including Panarottis Pizza Pasta, RocoMamas and John Dory’s, notified its shareholders on Tuesday that paying the interim dividend would reduce the group’s cash reserves and result in a cash deficit should the country experience a third resurgence (wave) of Covid-19. 

A further announcement on the payment of the interim dividend is expected ahead of the publication of the group’s results for the year ending June 30, 2021, which are expected to in September.

Profit plummet

Although trading conditions improved in the second half of 2020 due to the easing of lockdown restrictions, this was not enough to prevent Spur from experiencing a massive 73.3% (R43.1 million) slump in profit. 

The second wave of Covid-19 infections and resultant restrictions led to restaurant turnover for December 2020 declining by 25.8% in South Africa. The closure of beaches immediately impacted restaurants in coastal regions in this traditionally high trading month, with sales declining by up to 40% in these areas, newly-appointed CEO Val Nichas said in a statement. 

The move to alert level three in late December and the subsequent imposition of a renewed nighttime curfew, as the country was recording a high number of new daily coronavirus infections, negatively impacted restaurant sales, the group says.

“The impact of the curfew in South Africa on evening restaurant trading hours is reflected in dinner sales declining by 39%. Group alcohol sales were 39% lower as a result of the ban on the sale of alcohol for part of the period.”

Spur says it’s confident that the easing of restrictions will improve its financial position for the foreseeable future, adding however that “there is no guarantee that this will be [the] case.”

Read: Spur expects Covid-19 effects to linger longer

For the six months to December 2020, total restaurant sales declined by 29.5% to R2.9 billion, while sales from its South African franchise restaurants fell 31% and those of international restaurants 17.3%.

On the flip side, the restrictions boosted the group’s sales from online third parties, which now account for 27% of all restaurant sales.

Sales from online food delivery services Mr D Food and Uber Eats grew by 72% and 41% respectively for the six months. 

Read: How Spur is using delivery services to fight back

Group revenue declined by 40.2% to R314.2 million. Headline earnings decreased by 76.4% to R26.8 million with diluted headline earnings per share 74.5% lower at 31.88 cents.

In South Africa, 17 restaurants were opened and 18 closed, while seven restaurants were opened and four closed internationally during the period. In the second half of 2021, Spur plans on opening eight to ten new restaurants in South Africa and four to six new restaurants in other African countries “where the group has a presence and the brands are well received by customers.”

Spur share price graph

Listen: Spur CEO Val Nichas discusses its interim results and how the group has tackled lockdown

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Allankal kla met spur

The sudden surge in the Electricity price a couple of years ago hit their menu prices hard, and load shedding didn’t do them any favours either..Their stores cannot absorb anomalies like that

And of course, the whole racial debacle which was ridiculously biased made them reel..They’re still feeling the effect
They also weren’t aware of the fact that a certain minority group of families were one of their biggest support bases

I also believe their Burger offering of buy one get one free brought the feet to the stores..Two things disappeared..That and their salad bars..Mistake? Perhaps.. many Vegans only want Vegan food, give it to them

Buying Captain Dorego wasn’t such a clever move either!

Once upon a time the Spur was a place you could frequent more than once a week..Now it’s more like once every three months..It has become pricey

Good luck to them, i hope they turn the corner

I don’t think the electricity prices hit them too hard because don’t they use gas?


Quite right they do, however their fridges and other equipment,including lights and air conditioning are the big sinners, running for most part of the day

To add insult to injury, they have to contribute toward the mall/centres electricity bill as well and many stores invested in back up power, at a huge cost, thanks to the ANC run Eskom

My brother owns a few and shared with me what the first major electricity hike did to their food cost

And gas isn’t cheap either

They’re running a tight ship, but then again most of us are

Even a dead cat jumps twice.

What did they expect though…

Even before COVID19 their menu prices were distorted.

A normal boring spur burger costs R82.90… now let that sink in, it’s a basted patty, dry bun, lettuce, tomato slice, chips and onion rings… Does that sound like value to you?

Overpriced fast food joint. Outdated decor, this lot needs to take a serious look in the mirror as to where they see themselves in 5 years. Van Tonder and Farrely jumped ship just in time, they knew it was sinking.

I bet they now wish the customers of a certain minority ethnic group were not taken for granted.

Oh does Spur Group still exist

Just love it when a plan falls apart !!

Spur now very much a down-market eatery.

I worked at one as a student. I must have eaten a whole cow’s worth of staff burgers. That inoculated me. I love how foreign visitors can’t make head-or-tail of a Spur. It’s a Disneyfied celebration of a genocide if you know anything about American history. But with burgers and steak instead of smallpox and land grabs

End of comments.





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