Our opinion on the current state of SPURCORP(SUR)Spur (SUR) is a well-known franchisor with 701 fast-food restaurants. In South Africa, it has 559 restaurants, with 80% of them able to trade during load-shedding, and it also has branches overseas. About two-thirds of its sales in South Africa come from Spur Steak Ranches, with the remaining balance coming from a variety of franchise brands that the company has acquired over the years. These include John Dory, Panarottis, and more recently, RocoMamas and Hussar Grill. It appears that while the traditional Spur brand has seen a plateau in interest, newer acquisitions like RocoMamas and Hussar Grill are attracting South African consumers who are looking for fresh dining experiences.
This share is closely tied to consumer spending, which has been under pressure in recent years. The company is experimenting with meal kits that can be delivered and eaten at home, which could be a potential growth area. Notably, the outgoing CEO, Pierre van Tonder, left the company with no debt, which is a key reason it has not needed to undertake a rights issue.
On 27th July 2023, the company announced that it had acquired 60% of Doppio Zero, Pizza e Vino, and Modern Tailors for an undisclosed amount. In its results for the year ending 30th June 2024, Spur reported revenue up 14,1% and headline earnings per share (HEPS) up 11,4%. The company attributed the revenue growth to improved franchised restaurant turnovers and increased sales from the manufacturing and distribution division, which grew by 9,9% (8,7% excluding Doppio Collection). Sales growth in the retail company stores was a robust 119,5%, positively impacted by the contribution from the Doppio Collection restaurants.
The share looks reasonably valued and has broken strongly through its long-term downward trendline following the latest results. After reaching a low of 1240c on 7th September 2020, following the COVID-19 crisis in March 2020, the share has now recovered to 3450c. It was added to the Winning Shares List (WSL) on 8th August 2023 at 2488c, so it is up over 40% in just over a year.
SUR trade ideas
The Spur Group is ready to rocket to R23.96Spur Bull Box has formed and the price broke up and out of it.
7>21>200 - MA bullish
RSI>50 - Bullish
Target R23.96
CONCERNS:
This stock is definitely NOT in my trading list. The liquidity is low, the candles volatility are high.
The price jumps all over the place and doesn't show any strong signs it works with breakout patterns.
Also the price patterns can move sideways for a long period of time.
Maybe for an investor it's ok to hold, but with trading it won't work.
ABOUT:
The South African Spur Group (Established in 1967 in Cape Town) is a chain of restaurants and steak houses.
With over 330 restaurants across the country, the restaurant chain is known for its western-style menu, which features a variety of steaks, burgers, Buffalo wings (love them), hot rock ribs, and salads.
It's also expanded into several other African countries, including Namibia, Botswana, Zambia, and Zimbabwe.
Spur ChannelI don't have much hope that Spur will break up through the downward channel here.
Disclaimer: The views provided herein do not constitute financial advice.
Please feel free to comment, critique or add to my view, I welcome feedback, whether it agrees with my views or not.
This idea is based on my strategy, please consider your own before using it in any way. Always use a stop-loss and manage risk.
Spur Double BottomBouncing off the previous resistance - monitor if it holds for possible double bottom formation.
Disclaimer: The views provided herein do not constitute financial advice.
Please feel free to comment, critique or add to my view, I welcome feedback, whether it agrees with my views or not.
This idea is based on my strategy, please consider your own before using it in any way. Always use a stop-loss and manage risk.
SURThe long term head and shoulder top formation continues to play out with the neckline being rejected while we have also seen the long term trend line going back to 2003 being rejected which signals a further deteriorating technical outlook. My target here remains 1600c.
Below we highlight the original chart published during September 2018 at 2719c, followed by the current chart.
JSE:SUR Spur RedistributionWe have seen a long distribution trading range (TR) which formed from 2013 to 2018 that is now playing out to the downside. The markdown has now had a redistribution TR form and has reached the overbought line of the downward stride. Expecting the markdown to continue with a break of the TR.