Spur Corporation is the company that owns restaurants like Spur, Roco Mamas, Panarottis and John Dory’s. The share price has shot up 30% in the past six months…
And, just over a week ago the company acquired a R600 million business!
Spur just acquired this R600 million business
In July 2023 Spur announced its plans to acquire Doppio Group, the company that owns Doppio Zero as well as Pizza e Vino. The deal was concluded on 7 December 2023.
The business generated R600 million in sales for the year ending February 2023. It has 37 franchised and company owned restaurants, mainly in the Gauteng area.
This acquisition is important – because most of Spur’s restaurants are specifically for nighttime dining.
Doppio’s restaurants are more for daytime dining.
This gives Spur an extra level of diversification.
But there’s also plenty of growth opportunity that can come from this.
When Spur acquired Roco Mamas in 2015 for instance, there were 5 outlets, and now there are 80. Similarly, Spur acquired Hussar Grill with 6 outlets, and now there are 24…
The Doppio restaurants also target a different market segment than what Spur, or Panarottis would reach – again helping the company grow its reach.
Probably the best part of the deal is the two founding owners of Doppio will remain involved and retain a 20% stake in the business.
What Spur’s latest results reveal
Spur’s latest financial results were released in August 2023.
The company saw franchised restaurants increase turnover by 23% to R9.5 billion with revenue for the group up by 27.4% to R3 billion.
Earnings per share soared by 80% to 260cps.
The company paid a BIG 192cps dividend, which at the current share price equates to a yield of 6.4% which is pretty good.
But what I like most is Spur is debt free, with R374 million cash on hand!
The company will use R70 million of this cash for the Doppio acquisition – and it will still have a huge pile of cash to GROW the business!
Where is Spur’s share price headed?
Post pandemic restaurants are still recovering. The economy isn’t firing on all cylinders because of loadshedding. But Spur is certainly seeing high growth in its bottom line.
Add in a new acquisition and you can start to get excited about the company’s prospects.
The company plans on opening a bunch of new restaurants this year:
• 41 New restaurants in South Africa (in 2023 the company grew SA sales from R7,005m to R8,579m)
• 12 New restaurants internationally (in 2023 the company grew international sales from R736m to R939m)
• Panarottis is aggressively expanding with 15 new stores for the year
And on top of these expansions, the company’s adding the nearly 40 stores from the Doppio group as well.
There’s good reason to take a closer look at this stock… Follow me if you want to know more.
PS. You don’t want to miss out on my top five stocks for 2024. Go here for details.
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