Spur Corp achieved good results in FY25, attributed to a strong performance from the SA franchise and SA Manufacturing and Distribution segments. Despite the softer macro environment and the structural shift in the market towards fast food and takeaway, the group achieved market share gains, with restaurant sales of 8.8% y-y outpacing the total industry, which grew by 5.7% y-y. While restaurant sales were good, we estimate most of the growth came from menu inflation. While SUR does not disclose inflation figures for its chains, management noted that the customer count was slightly lower (-0.3% y-y), which would have adversely affected volumes.
Manufacturing and Distribution performed strongly, supported by more stores in the group’s network, as well as the addition of the Doppio Collection. There is a concern that the foot-and-mouth disease affecting SUR suppliers could impact volumes from this segment in FY26, but we believe the increased inventory brought in should mitigate any immediate shocks.
While the rest of Africa region continues to perform well, exits from India and Saudi Arabia were expected due to problems with franchise partners. We believe that Australia could follow after the end of the remaining franchise agreement there. This would free up capital to allocate towards expanding the casual dining market into Africa, where management sees a significant runway.