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Spur sinks 7% after warning of poor sales
Restaurant group Spur's share price fell 7% to R26.01 on Monday morning after it warned shareholders of a decline in interim sales.
©Andrey Armyagov via 123RF
The total group's sales fell 2.6% to R3.7bn for the six months to end-December from the matching period in 2016, with the sharpest sales decline of 12.2% suffered by Captain DoRegos followed by 9.3% at its flagship Spur Steak Ranches chain.
CEO Pierre van Tonder said Spur had suffered a perfect storm of disasters in March which included "social media fall-out following a customer incident in an outlet in Johannesburg", coupled with a plunge in consumer confidence following President Jacob Zuma's Cabinet reshuffle.
"We believe we are on the right track to restoring Spur Steak Ranches to the growth trajectory it was on prior to March. Economic growth is critical to local business and the resolution of the political turmoil in the country will no doubt have a profound impact on our future," Van Tonder said.
March's problems continued into its September quarter, leading to sales at its South African franchised restaurants falling 6.2%. "The second three months of the financial year to December showed a marked improvement, with sales declining only 0.2%," Van Tonder said.
Spur is scheduled to release its interim results on 22 February, and it did not include a forecast for earnings in Monday's sales update. The group's number of outlets grew to 613 at the end of 2017 from 590 at the end of 2016. Excluding new restaurants, sales declined 6.6%.
Its fastest-growing chain was RocoMamas, which grew sales 37.5%, followed by The Hussar Grill, which grew sales 24.1%.
Source: BDpro
Source: I-Net Bridge
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