Spur lifts profit 13% despite FMD squeeze

Spur Corporation has delivered a robust set of interim results for the six months ended 31 December 2025, overcoming a “fractured” global outlook and persistent domestic economic pressure. The casual dining giant reported a 13% increase in profit before income tax to R244.7 million, driven by strong performance across its 10 restaurant brands.

Total franchised restaurant sales climbed 8% to R6.4 billion, a notable feat given the challenging backdrop of the 2025 foot-and-mouth disease (FMD) outbreak. The FMD crisis significantly disrupted the beef livestock industry, causing supply shortages and driving meat prices up by 12%. Despite these costs, the group’s average spend per head grew above menu-price inflation, while annual customer counts increased slightly.

The iconic Spur brand remains the group’s primary engine, accounting for 64% of South African restaurant sales and achieving a 7.2% sales increase. Panarottis emerged as a standout performer, posting a 17.4% sales surge, driven by a value proposition that resonated with price-conscious consumers. Conversely, John Dory’s faced a difficult period with sales falling 11.7%, prompting a strategic review and the appointment of a focused executive team to develop a turnaround strategy for the seafood brand.

Strategic expansion and executive shifts

Franchisees demonstrated their commitment to the group’s “R8 model”, focusing on revamps, relocations, and revival, by investing an estimated R173 million in new local restaurants. This expansion resulted in 29 new builds in South Africa and nine internationally, bringing the total footprint to 753 restaurants across 14 countries. To further its digital strategy, the group is leveraging artificial intelligence for personalised customer communication, driving a 76% increase in app adoption over the past year.

The group also announced the appointment of Vuyokazi ‘Vuyo’ Henda as an executive director, effective 2 March 2026. Henda, who has served as the group’s chief marketing officer since 2022, is credited with driving revenue growth and brand turnarounds for major South African labels.

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Shareholder returns and legal headwinds

Reflecting its strong cash generation, which increased 21.1% to R217.5 million, the board declared an interim gross cash dividend of 120 cents per share, a 13.2% increase from the prior period. This payout comes despite a decrease in overall cash and cash equivalents to R454.7 million, primarily due to aggressive share repurchases and higher dividend distributions.

The group continues to navigate a high-profile legal dispute with GPS Food Group, in which an arbitrator recently found Spur liable for damages arising from a breached joint venture agreement. While GPS is claiming R233 million, Spur intends to exercise its automatic right to appeal the merits of the award. Based on legal counsel, the group believes it is “more likely than not” to succeed on appeal and, as such, no liability has been recognised at the reporting date.

Outlook: Cautious optimism

Looking ahead, Spur Corp remains optimistic despite a “subdued” hospitality market. The group plans to open 42 new restaurants in South Africa and 14 internationally during the 2026 financial year. While short-term trading conditions are expected to remain volatile due to strained disposable income, the group believes it is well positioned to gain market share across middle-income and speciality dining categories.

This article was republished from Moneyweb. Read the original here.