Finweek English Edition - - INVESTMENT -

The restau­rant group re­leased a sales up­date for the six months ended 31 De­cem­ber 2013, which said that to­tal restau­rant sales in­creased by 11.5% and in­ter­na­tional sales were 16.1% higher in rand terms fol­low­ing weak­ness in the cur­rency. FNB Se­cu­ri­ties told clients: “This re­sult ref lects re­cent re­tail sales trends. Spur is trad­ing on a for­ward P/E of around 16 times. This rat­ing ref lects a rel­a­tively high growth tra­jec­tory which ap­pears to be jus­ti­fied.”

The com­pany should con­tinue to show strong growth in the years ahead be­cause of its di­verse mo­bile op­er­a­tions and will con­tinue to pay an at­trac­tive div­i­dend of al­most 5%.

We think that back­ing the un­der­dog in this con­text is the right call to make in 2014.

In light of the re­cent ac­qui­si­tion and signs of eco­nomic re­cov­ery, par­tic­u­larly in Europe, there’s good scope for fu­ture earn­ings growth and a div­i­dend pay­out.

Mea­sures to drive op­er­a­tional ef­fi­cien­cies and cut costs are un­der­way and we ex­pect mar­gin up­lift over the next three years.

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