Trading conditions continued to be impacted by various levels of COVID-19 restaurant trading restrictions in the six months to 31 December 2021 (“the period”), including a prohibition on sit-down trade in July 2021. These challenging conditions were exacerbated by widespread civil unrest in specifically KwaZulu-Natal (“KZN”) in the second week of July 2021. This resulted in nine of the group’s franchised restaurants being looted and vandalised, with damages totalling R29.5 million. Franchised restaurant turnover was adversely impacted by R14.6 million in in July 2021.

The group continued to respond to the pandemic fuelled market conditions with resilience, focusing on everyday value and convenience solutions through takeaways, click and collect services and third-party deliveries. In addition, the close collaboration and partnership with the franchise network enabled several strategic initiatives to be implemented during the period, including supply chain improvements.

Following the reduction in lockdown levels, and resultant reduction in trading restrictions, conditions improved from August to December 2021, with strong trading in the fourth quarter of calendar 2021. As a result, the group’s performance continued to recover in the first half of F2022.

Franchised restaurant sales grew by 28.3% during the period compared to the six months to December 2020 (“previous comparable period”), when significant restrictions on sit-down trade were in place, and by 18.0% over the preceding six-month period ended 30 June 2021.

While the group reported a pleasing recovery for the period, restaurant turnovers for the period remain 9.5%^ behind pre-COVID 19 levels.

^ six months ended 31 December 2021 versus six months ended 31 December 2019

Restaurant sales

* Speciality brands include The Hussar Grill, Casa Bella and Nikos

Group revenue and profit

The franchised network continued to be supported with temporary discounting of franchise and marketing fees during the July 2021 lock down period and KZN unrest. As trading conditions improved, the level of support required by franchisees was significantly lower than that required during the previous comparable period leading to a recovery of growth in group revenue and profit.

Trading statement – Earnings

In accordance with section 3.4(b) of the JSE Listings Requirements, shareholders are advised that the group is expecting to report earnings per share (EPS) and headline EPS (HEPS) in the following

ranges for the period compared to that of the previous comparable period as follows:

The consolidation of the net marketing fund surpluses and various once-off items in the period, and previous comparable periods, impacted total earnings. The most material single item in the period is a charge against earnings of R22.034 million, previously paid to the South African Revenue Service, relating to a tax dispute in respect of which judgement was issued against the group by the Supreme Court of Appeals during the period, as reported on SENS in October 2021.

Comparable EPS and Comparable HEPS** are therefore expected to increase as follows:

** EPS and HEPS excluding the impact of the net of the marketing fund surpluses and deficits and the various once-off and unusual items referred to above.

The financial information on which this trading statement is based is the responsibility of the directors of Spur Corporation and has not been reviewed or reported on by the group’s independent auditor.

The group’s results for the six months ended 31 December 2021 are expected to be released on 24 February 2022.