Spur and John Dory in dispute

Spur Corporation made the following voluntary announcement via the Stock Exchange News Service (SENS) on Friday, 2 December 2011:

“The board of directors of the Spur Corporation makes this announcement as a result of the reports in the media concerning the Spur Group, certain of its directors and Mr Kapsimalis, the managing director of John Dory, a subsidiary of the Spur Group.

“There are civil litigation and arbitration proceedings currently underway which will canvass and determine the issues forming the subject of Mr Kapsimalis` complaints to the Financial Services Board which he has chosen to ventilate in the media. It is unfortunate that Mr Kapsimalis has chosen to use the forum of the media to further his interests. The Spur Corporation will not litigate with Mr Kapsimalis in the media and will deal with his allegations in the appropriate fora.

“The Spur Corporation and its directors will cooperate fully with any investigation which the Financial Services Board or any other regulatory authority intends to launch into the affairs of the Spur Corporation, its subsidiaries and the conduct of any of its directors.”

Spur Corporation is a leading family sit-down restaurant group, which includes Spur Steak Ranches, Panarottis Pizza Pasta and John Dory’s Fish & Grill, all operated on a franchise basis. The Spur Group listed on the JSE in 1986, at which stage it had 43 franchised Spur Steak Ranch outlets.

On 8 September 2011, the group reported an increase in revenue of 15.9% to R403.4 million for the year to June 2011 as improving consumer sentiment in South Africa resulted in a stronger second half trading performance. Franchise fee income in Spur Steak Ranches increased by 10.1% to R137.0 million, Panarottis Pizza Pasta by 7.2% to R11.5 million and John Dory’s Fish & Grill by 10.6% to R9.8 million.

MD Pierre van Tonder said in the year-end results that the Spur brand attracted increased customer traffic and continued to gain market share. Growth was driven by value-added promotional campaigns and price-driven advertising, he noted.

“Spur’s successful entry into the breakfast market through the Spur Unreal Breakfast promotion has created an additional revenue stream and captured market share from other national chains who have previously dominated the market. It is encouraging to see the repositioning of the Panarottis brand gaining traction with customers, while John Dory’s has responded well to the tough environment in the highly competitive fish market,” he said.

Spur Corporation’s restaurant base was expanded to 364 during the year, with 328 outlets operating in South Africa and 36 internationally. Ten new Spur, seven Panarottis and three John Dory’s outlets were opened, while 25 restaurants were refurbished and nine relocated to better trading sites. Two new international restaurants were opened. In the year ahead the group plans to increase its investment in value-added marketing campaigns and build on the momentum created in the breakfast market. Brand loyalty will be driven through the aggressive marketing of the Spur Family Card.

Fifteen new restaurants are on the cards for South Africa in the 2012 financial year. International expansion will focus mainly on Africa, where new outlets are planned for Malawi, Tanzania, Namibia, Nigeria and Mauritius. The group will not be investing in further company-owned restaurants in the year ahead.