Spur’s profit grill

Hussar Grill- [] Hussar Grill- []

Well-known Cape Town steakhouse, The Hussar Grill, is being fattened up by its new owners, Spur Corporation. The restaurant brand - which targets higher income customers – managed a commendable 37% increase in sales to a sumptuous R46m in the half year to end December – making it a star performer for Spur’s new retail arm. The Hussar Grill’s fledgling franchise arm hiked revenues 34%.

The Hussar Grill looks an inspired purchase by Spur considering existing store turnover growth was up a sprightly 18,5% - which speaks volumes about the strength of the eatery brand in leaner economic times.

Spur also reported that there were no menu price increases at The Hussar Grill during the interim period, with CEO Pierre Van Tonder contending the chain’s traditional customers were more resilient with more disposable income.

Spur’s retail segment – which comprises four The Hussar Grill restaurants and one RocoMamas outlet – increased revenue 30% to R18,9m.

Interestingly, Spur did some inspired ‘switching’ of restaurants with RocoMamas – a gourmet burger specialist – opening in Green Point at the site of the old Hussar Grill from December 2015. The Hussar Grill in Green Point was relocated to Mouille Point – which meant a whole month of no trading in November. This explains why the retail segment showed a drop in profits to just R67,000 (from R2m previously.) Spur disclosed R2,1m of costs and losses relating mainly to the initial set-up and relocation costs.

Aside from not trading for a month, the new Mouille Point Hussar Grill also incurred costs and losses of R411,000 and capital expenditure of R2,3m. The Hussar Grill footprint now extends to 12 stores – including one international outlet.

Spur also seems to be gaining traction with its Panarottis Pizza Pasta with 81 restaurants now open in South Africa. Although Panarottis has largely remained in the shadow of the flagship Spur restaurant brand, Van Tonder reported exceptional store turnover growth.

During the 2013/2014 financial year store turnover grew 28% and in 2014/2015 by 25%. In the six months to December 2015 there was another 21,6% increase to a not insubstantial R339m – achieved despite a mere 2,1% increase in prices in November last year.

Meanwhile Grand Parade Investments, which holds a 10% stake in Spur Corporation, is making steady – albeit unspectacular progress – with rolling out Burger King stores. In the half year to end December there were 61 Burger King outlets mainly scattered throughout the Western Cape and Gauteng – comprising 56 corporate stores and six franchised stores. GPI plans another 18 outlets by the end of June, which will bring total store numbers to close to 80. At the time of going to press Burger King’s website showed 63 stores up and running.

GPI CEO Alan Keet said there had been a 10% gross margin improvement – which should placate worries about why Burger King CEO Jaye Sinclair suddenly resigned recently. He said the so-called ‘4-wall’ profits for Burger King came in at R12,2m. 

GPI expects to launch its new fast food brand Dunkin’ Donuts shortly in Cape Town and Johannesburg.

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