SA casual dining chain set for African expansion
Spur CEO Pierre van Tonder at a Spur restaurant. (Source: FINANCIAL MAIL)
South African casual dining chain Spur, which is listed on the JSE, recently said that it would adopt an Africa focus in its expansion drive in the current financial year.
Now, the family sit-down restaurant brand has announced that new eateries are on the menu in Nigeria, Swaziland, Namibia, Tanzania and the Seychelles.
Spur said at least 26 new eateries in its stable will be opened in South Africa in the current financial year. Of this, seven Captain DoRegos, six Spur, five Panarottis and four John Dorys branches would be started in the first six months of the current financial year.
With more Captain DoRegos outlets on the menu, the company is looking to aggressively expand the recently acquired fast-food chain. In May in 2012, Spur paid $3.1 million (30 million rand) for Captain DoRegos â€” which specialises in â€śvalue-orientatedâ€ť take-away fare such as chicken, seafood and burgers.
Now, Captain DoRegos looks set to take under its wing the Free State, Gauteng and the Eastern Cape to the rest of the country.
Captain DoRegos had also made its first few forays into the rest of Africa with store openings in Namibia and Mauritius while Maputo, Gabarone and other African opportunities were on the anvil.
In the year to end June, Captain DoRegos generated restaurant sales of R191m ($19.54 million) and franchise fees of R9m ($0.92 million). While this compares favourably with Spurâ€™s secondary brands like Pannarotis and John Doryâ€™s, which notched up franchise fees of R17m ($1.74 million) and R12m ($1.23 million), respectively, the Spur restaurants still dominate the franchise line, earning almost R180m ($18.4 million).
While Captain DoRegos may prove the dark horse in spurring on the master brandâ€™s franchise flows, the growth of Spurâ€™s eponymous brand is key to the companyâ€™s all-important distribution centre sales.
The effect of Captain DoRegos is already tangible in the year to end June with Spurâ€™s manufacturing and distribution revenue increasing nearly 50% to R214m ($21.9 million).
Spurâ€™s management stated that Captain DoRegosâ€™s distribution centre chipped in R73m into Spurâ€™s manufacturing and distribution income. And, this contribution can only be expected to go up in the year ahead with 11 new Captain DoRegos outlets opened during the financial year and another seven scheduled for opening in the first half of the new financial year.
With all brands doing brisk business, Spur posted a 30 percent increase in revenues for the year to June, while operating profits surged 12 percent.
The company declared a final dividend of 56 cents a share for the year to June this year.
Spur Corporation was started in late 1967 with the launch of the Golden Spur Steak Ranch in Newlands, Cape Town.
The group has expanded over the past 40 years to the point where it currently has 267 Spur Steak Ranches, 61 Panarottis Pizza Pasta restaurants, 29 John Doryâ€™s Fish Grill Sushi restaurants, and 72 Captain DoRegos outlets within South Africa.
Globally, the group has established 36 Spur, 12 Panarottis and 2 Captain DoRegos outlets.
The Spur Group listed on the JSE in 1986, at which stage it had 43 franchised Spur Steak Ranch outlets.
Source: Company Website