S.Africa's Spur warns of up to 77% slump in H1 profit on COVID-19 hit

  • Reuters
S.Africa's Spur warns of up to 77% slump in H1 profit on COVID-19 hit

JOHANNESBURG, Feb 24 (Reuters) - South African franchise restaurant chain Spur Corporation SURJ.J said on Wednesday it expects first-half profit to slump as much as 77%, following COVID-19 lockdowns, retrenchment costs and reduced franchise fees.

The restaurant sector has been one of the hardest hit industries in South Africa as lockdowns, curfews, reduced seating capacity, a ban on the sale of alcohol and weaker disposable income have hammered profits and pushed some out of business.

The owner of the RocoMamas burger chain and Spur Steak Ranches said headline earnings per share (HEPS) for the six-months ended Dec. 31 will likely be between 72% and 77% lower than 125.8 cents reported in the prior comparable period.

HEPS is the main profit measure in South Africa.

Earnings for the period were further impacted by costs totalling 11.8 million rand ($811,587.82) related to a voluntary retrenchment programme undertaken during the period as part of the group's austerity steps against the pandemic, it said.

Its group revenue was further impacted by temporary fee reductions granted to franchisee partners for franchise and marketing fees. These were granted to assist partners through the difficult trading periods from the start of the lockdown in March.

($1 = 14.5394 rand)

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