RocoMamas chain turns in star performance for Spur

RocoMamas burger chain continued to be a standout performer in Spur’s 2021 financial year, with sales rising more than 10% even as the restaurant industry battled to cope with lockdowns, curfews and intermittent bans on alcohol sales.

RocoMamas franchise revenue, paid by restaurants to Spur, increased 12.9% to R29.47m in the 12 months ended June as its delivery and takeaway options proved popular with consumers. This is in stark contrast to Spur’s overall SA franchise revenue, which fell 6.7% to R230.5m as the group offered reduced franchising and marketing fees until March to support struggling outlets.

Franchise revenue for seafood chain John Dory’s was down 20%, and that of Panarottis pizza and pasta outlets was 15.3% lower.

Upmarket restaurants were hit hard by curfews and alcohol sales bans, leading to a 5.7% drop in franchise revenue from highend steakhouse chain Hussar Grill and a 29.7% fall for Nikos, the Greek food establishment.

Asked about the declining performance at Panarottis, Spur CEO Val Nichas said a refresh of the brand was being planned. “It is a brand that we’re looking to re-energise.” She did not divulge details: “It’s about just creating a more appealing shopping experience with pizza that is a very high quality.”

Total restaurant sales increased 1% to R6bn in the financial year, with takeaway sales reaching R1bn as the group scrambled to adapt to a change in dining patterns as a result of the pandemic. RocoMamas accounted for almost half of the entire group’s takeaway orders, while Panarottis made up 37% and Spur 11%.

Spur offered new virtual brands such as chicken and sushi in the pandemic, which were sold out of existing restaurants through delivery services such as Uber Eats and Mr D. It is now ensuring that new stores are designed with a counter focused on delivery staff and customers picking up takeaways in a bid to avoid disrupting the experience of its sitdown customers.

The group’s flagship new drive-through Spur restaurant in Pretoria can deliver orders within five minutes. Nichas said the company is looking at expanding this dining option, even as easing restrictions offer the prospect of consumers returning to seated dining.

The Spur group, which has 78 RocoMamas outlets, is planning a drive-through version, though it is facing municipal approval delays.

RocoMamas has just started offering a pre-order click-andcollect service, and Spur says it will open 17 new stores in this brand, including six abroad, in the 2022 financial year.

Spur reported that 27 restaurants shut down in SA, saying “profitability in several of [them] was already marginal and the impact of reduced trading, due to Covid-19 restrictions, forced their final closure”.

However, it also opened 19 stores in the review period. The annual results indicate the extent to which franchisees have been affected by the lockdown capacity restrictions, which have varied from 50 to 100 seated guests, reduced operating hours and intermittent bans on alcohol sales.

Nichas said consumers and owners adapted to lockdown restrictions, but “it’s not sustainable long term. We’re going to need the government to be more relaxed with the regulations for the restaurant industry, because I think not all restaurants have managed to hold it together. If it continues, we might see more casualties.”

Spur is paying a half-year dividend, which it delayed earlier in the year, amounting to 62.4c a share after tax. However, there is no full-year dividend, even though the group is debt free and its cash increased by

R96m to R261m.

Spur’s shares rose 7% to R19.26 last week. The stock is up about 10% so far this year after plummeting more than 30% since the start of 2020.