SA’s Spur forecasts 40% fall in annual profit, hit by lockdowns
Franchise restaurant chain Spur Corporation said on Thursday it expected full-year earnings to fall by at least 40% because all of its operations in the country were shut during coronavirus-related lockdowns.
Restaurant operators across South Africa were hammered during coronavirus restrictions, with Spur’s stores closed for five weeks.
The country’s leading restaurant businesses, with more than 640 restaurants across South Africa, the rest of Africa, Mauritius, Australasia and the Middle East, said it expects 495 of its domestic restaurants to be open by the end of this month, with most operating a full sit-down service.
The company said its South African restaurant sales, which comprise nearly 90% of the group’s total restaurant sales, fell 22.3% in the year ended June 30. It expects annual headline earnings per share, the main profit measure in South Africa and which strips out certain one-off items, to decline by at least 40%.
“We are discounting franchise and marketing fees and granting extended payment terms for certain debts. We expect to continue discounting fees until our franchisees experience meaningful increases in restaurant turnovers,” the company said.
Its total franchised restaurant sales declined by 21.7% to R6 billion due to trading restrictions in all countries of operation during the last four months of the financial year, Spur said.
Would you like to comment on this article or view other readers' comments? Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.