Mon, 12 Apr 2021

Spur sheds jobs due to the pandemic

News24
24 Feb 2021, 19:42 GMT+10

  • A voluntary retrenchment programme in the response to the impact of Covid-19 and the lockdown cost the Spur group R11.8 million
  • This comes as Statistics SA announced on Tuesday that the official unemployment rate has increased to a record 32.5%
  • The Spur group said it expects headline earnings per share to slump by as much as 77%.

Spur said its earnings for the six months to end December were impacted by a voluntary retrenchment programme that cost the group R11.8 million.

In a trading update released on Wednesday Spur said the retrenchment programme was part of the group's austerity measures in response to Covid-19.

This news comes as Statistics SA announced on Tuesday that the official unemployment rate has increased to a record 32.5%, as the number of jobless in South Africa grew to 7.2 million in the fourth quarter of 2020.

Spur said total franchised restaurant sales declined by 29.4% to R2.9 billion, against the R4.1 billion reported for the corresponding period.

It said ongoing Covid-19 lockdown trading restrictions, the second wave of the pandemic and the resultant restrictions in the key trading month of December 2020 curtailed franchised restaurant sales in the period.

"As expected, these restrictions, combined with weaker consumer disposable income, were the main contributors to the decline in total franchised restaurant sales."

Group revenue has been further impacted by temporary fee reductions granted to franchisee partners for both franchise and marketing fees. The concessions were implemented to assist the franchisee base through difficult trading periods from the start of the lockdown in March 2020, said the group.

Amidst the Covid-19 lockdowns, retrenchment costs and reduced franchise fees, the group said it expects headline earnings per share to slump by as much as 77%.

The Cape Town based retailer said trading has improved since the easing of level 3 trading restrictions announced on 2 February.

"The improving trading environment is encouraging for both the company and its franchisee partners. The group's balance sheet remains ungeared."

Spur's interim results for the six months ended 31 December 2020 are expected to be released on 2 March.

Source: News24

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