Restaurant group Spur Corporation has set aside R129.5 million to cover a potential damages award stemming from a long-running legal dispute with GPS Food Group.
The company informed shareholders through the JSE's SENS that it intends to appeal the damages award in full and has been advised by its senior counsel that it is likely to succeed.
The legal dispute dates back to 2019, when GPS Food Group served summons against Spur Group and Spur Corporation over an alleged oral agreement to acquire, develop and operate a rib-processing facility.
GPS initially sought damages ranging between R119.9 million and R167 million under its primary claim, known as Claim A. It also lodged an alternative delictual claim of R95.8 million for alleged accumulated losses under Claim B.
Spur and GPS agreed in 2019 to resolve the dispute through arbitration, with proceedings eventually beginning in October 2023.
In August 2025, Spur informed shareholders that the arbitrator had issued a partial award in favour of GPS on Claim A, while Claim B was dismissed.
On 3 August 2026, the arbitrator notified Spur that GPS had been awarded R74.6 million in damages relating to Claim A.
Spur subsequently announced that it would recognise a provision for the award in its financial results for the year ended 30 June 2026.
The provision rises to R129.5 million after accounting for interest at the prescribed rate of 10% from the date the original summons was issued in 2019.
“Spur intends to lodge an appeal against the award in its entirety. An appeal award would be final and binding, and there is no further right of appeal,” the company said.
Spur added that its senior counsel believes the group is likely to succeed in its appeal against the Claim A award.
Earnings expected to fall
Despite its intention to challenge the award, Spur expects the provision to have a significant impact on its financial results for the year.
In a trading statement, the company said earnings per share (EPS) are expected to decline by between 31% and 41% compared with the previous year.
Headline earnings per share (HEPS) are forecast to decrease by between 34% and 43%.
However, Spur has provided an adjusted earnings measure that excludes the once-off provision related to the GPS claim.
Based on this adjusted measure, the company expects growth of between 5% and 13% for the year ended 30 June 2026.
Spur is expected to release its full-year financial results on 20 August 2026.
Liquidity and dividends unaffected
Despite the size of the provision, Spur has assured shareholders that the award will not place pressure on its liquidity position.
The group says it has sufficient cash reserves to meet the potential financial obligation, meaning its liquidity and dividend declarations are expected to remain unaffected.
Spur is currently finalising its annual results for the financial year ended 30 June 2026.
The company has cautioned that the financial information contained in its trading statement remains the responsibility of the group's directors and has not yet been reviewed or reported on by its independent auditors.
The legal battle with GPS, which began with the issuing of summons in 2019, is now set to continue through the appeal process.