• Two non-executive directors at Spur Corporation have resigned, just a day after the chief operations officer stepped down.
• The board has also elected to defer the interim dividend payment for 2020, to preserve cash.
• The restaurant group, as many others in the industry, has been hard hit by the Covid-19 pandemic and has also delayed the release of its financial results.

Spur Corporation has deferred the 2020 interim dividend payment to shareholders, in a bid to preserve cash amid uncertain economic impacts brought on by Covid-19.

The restaurant corporation on Thursday released a shareholder notice, indicating board changes as well as a delay of its financial results release.

"Trading has steadily improved since the beginning of May 2020, although still significantly down on pre-lockdown levels.

"While the board is confident that trading will continue to improve, there is no guarantee that this will be case," the notice read.

All restaurants in its portfolio – including Spur Steak Ranches, Italian food franchise Panarotti’s, seafood restaurant John Dory's, burger joint RocoMamas, and steakhouse Hussar Grill – reported massive drops in sales during May and June as a result of lockdown, Fin24 previously reported.

The group's longtime CEO Pierre van Tonder announced his resignation earlier this year, and described the impact of Covid-19 on business as being worse than that of the global financial crisis in 2008. Just six weeks after that, Chief Operating Officer Mark Farrelly resigned at the end of August.

Now, just days later, two non-executive directors, Mntungwa Morojele and Dineo Molefe, have stepped down.

Molefe has been appointed chief financial officer of MTN, while Morojele has resigned due to "increased professional responsibilities" including starting a new business in renewable energy and an appointment as a non-executive director to another listed company, Spur said in the shareholder notice.

Deferred dividend

The group further explained that it would defer the 2020 interim dividend.

"The directors believe that it is a reasonably foreseeable possible event that more stringent trading restrictions could be re-imposed if the Covid-19 infection rate increases, which could have a further negative impact on the business of the group.

"Similarly, should the current restrictions be extended over the long term, the current projected recovery will be delayed," it said.

Although the group is of the view that its current cash reserves are "sufficient" for the foreseeable future, paying out the interim dividend would "significantly reduce" the group's available cash reserves, it said. "That would result in a cash deficit should certain of the scenarios projected occur," it warned.

The board has also resolved to delay publishing the annual financial statements for the year ended 30 June 2020 to on or about 28 October, it said.