Ribs lawsuit bites into Spur’s profit
Restaurateur Spur says it took a major fall in profit for the 2026 financial year after it was hit by a lawsuit, but shareholders will still receive a higher payout as the group’s cash balance grows.
The GPS ribs lawsuit is a long-running battle between the restaurant giant and manufacturer GPS Food Group over an alleged broken oral agreement to build a joint rib-processing facility. Spur lost in arbitration but is planning an appeal for February next year.
The group , which owns household-name dining brands Spur, RocoMamas and Panarottis, among a portfolio of 10 brands, reported on Thursday that HEPS for the year to end-June fell by more than 38% to 209c. Profit before income tax dipped 19.4% from R401.7m in the previous year.
According to the group, the GPS provision had a significant effect on its reported financial performance because when stripped out, the group recorded double-digit growth in adjusted profit before income tax, and HEPS was 8.9% higher.
Spur remained highly cash generative during the year, ending it with unrestricted cash of nearly R500m. As a result, shareholders will be paid out 326c per share, an increase of 9% from the previous year.
Spur said the board considers dividend payments alongside other capital allocation priorities, including share repurchases and strategic investments. It also considers market conditions, the trading outlook, expected cash generation, contingent liabilities and liquidity.
The dividend came as group revenue grew 8.5% to more than R4bn and franchised restaurant turnover increased 6.9% to R12.3bn.
Spur said consumers remained under pressure during this period despite the increase in turnover. The group was also affected by rising input costs, increased competition and labour and skills challenges.
Spur ended the year with 751 restaurants in 14 countries, compared with 724 last year. It opened 42 restaurants locally and 10 more internationally, with plans to open another 50 at home and 16 abroad in the 2027 financial year.
5News aggregated this summary from the outlet’s public feed. The full article, with all the context, is on www.businesslive.co.za — the content belongs to Business Day.
