Restaurant group Spur Corporation’s profit has dropped sharply despite higher revenue and stronger trading across its restaurants network.
The Spur Corporation operates multiple well-known casual dining family restaurant brands, including Spur Steak Ranches, Pannarottis, John Dory’s, Casa Bella, and Doppio Zero, among others.
In the financial year ended June 30, the group reported a 19.4% decline in profit before income tax to R323-million from R401-million a year earlier. Earnings per share dropped by 36.1% to 215.69 cents, while headline earnings per share dropped 38.4% to 209.32 cents.
“Shareholders are advised that the board has, on 18 August 2026, resolved to declare a final gross cash dividend for the year ended 30 June 2026 of R187.5-million, which equates to 206.0 cents per share and the full-year dividend increasing by 9.0% to 326.0 cents per share for each of the 90 996 932 shares in issue,” reads the statement.
The group said the decline was largely linked to the litigation provision, which included a R74.6-million award, interest calculated at 10% from the date of the original summons and estimated legal costs.
Details of the GPS litigation
Spur Corporation raised a R129.5-million litigation provision after an arbitrator awarded GPS Food Group R74.6 million in damages over a long-running dispute regarding an alleged rib-processing joint venture.
This stems from a long-standing dispute, in which GPS Food Group asserted that an oral contract was made to form a joint venture and build a Cape Town rib-processing plant as an exclusive supplier for Spur. They claimed Spur walked away from the verbal deal, leading to heavy capital losses, start-up costs, and operational deficits after the plant failed and closed in 2020.
In 2025, a partial arbitration ruling found a Spur subsidiary liable for the contractual claim, while dismissing secondary aspects. Earlier this month, the final quantum was set at R74.6 million in damages, which, combined with 10% interest dating back to 2019 and legal costs, pushed total provisions to R129.5 million.
Spur is appealing the entire arbitral award, and a three-member independent arbitration appeal panel is scheduled to hear the challenge in February 2027.
Spur stronger besides the GPS litigation
Without the impact of the GPS litigation provision, Spur’s underlying performance was considerably stronger. Adjusted profit before tax increased 12.8% to R453.1 million, while adjusted headline earnings per share rose 8.9% to 370.28 cents. Adjusted earnings per share increased 11.6% to 376.65 cents.
“The financial year ended 30 June 2026 was impacted by a highly challenging trading environment marked by constrained consumer spending, rising input costs, heightened competition, labour and skills pressures, and continued shifts towards value, convenience and digital engagement.
“Competitive pressure intensified across eating-out and order-in occasions, particularly from quick-service restaurant players, aggregator-led offers and strong promotional activity in categories such as burgers, pizza and family dining,” the group said.
The group’s revenue, nevertheless, increased 8.5% to R4.2-billion, while franchised restaurant turnover rose 6.9% to R12.3-billion. Its manufacturing and distribution division also supported growth, with revenue from the division increasing 11.3%.
Restaurant network grows
Spur’s restaurant network expanded during the year, reaching 751 restaurants across 14 countries, compared with 724 a year earlier. In South Africa, 42 restaurants opened while 15 closed. Internationally, the group opened 10 restaurants and closed three.
The company said customer numbers continued to increase, while average spending per customer grew slightly above menu-price inflation. It also highlighted continued investment in refreshed restaurant formats, including its Spur, Panarottis and Hussar Grill brands.
The group ended the year with unrestricted cash of R493.8-million, up from R477-million, reflecting its continued ability to generate cash despite the challenging trading environment.
- Spur Corporation's profit before income tax dropped 19.4% to R323-million in the financial year ended June 30, 2026, despite a revenue increase of 8.5% to R4.2-billion.
- The decline in profit was mainly due to a R129.5-million litigation provision related to a R74.6-million damages award to GPS Food Group over a disputed rib-processing joint venture.
- Excluding the litigation provision, adjusted profit before tax increased 12.8% to R453.1 million, with adjusted headline earnings per share rising 8.9% to 370.28 cents.
- The Spur restaurant network grew to 751 outlets across 14 countries, with 42 openings and 15 closures in South Africa, and 10 openings and 3 closures internationally.
- The board declared a final gross cash dividend of R187.5-million (206.0 cents per share), resulting in a full-year dividend increase of 9.0% to 326.0 cents per share for the 90,996,932 shares in issue.
