GPS Food Group awarded R74.6 million damages in Spur Corporation dispute

Spur Corporation has provisioned R129.5 million following an arbitrator's decision awarding GPS Food Group R74.6 million in damages, stemming from a protracted dispute over a purported rib-processing joint venture. The disagreement originated in 2019, when GPS filed a lawsuit against Spur Group and Spur Corporation, alleging that they had agreed to create a joint venture for acquiring, developing, and managing a rib-processing facility.

The case was later forwarded to arbitration. Spur Corporation has announced its intention to appeal the entire award, which is set to be heard by a panel of three experienced independent arbitrators in February 2027.

The appeal panel will consist of three senior independent arbitrators, and the decision rendered will be final and legally binding, with no room for further appeals. Spur Group's Senior Counsel believes the company has a high likelihood of success in the appeal. The R129.5 million provision includes the R74.6 million damages award, as well as a 10% interest from the date of the initial summons and estimated legal costs.

This provision will be reflected in Spur Corporation's financial results for the year. Spur Corporation anticipates a decline in earnings per share of between 31% and 41%, with headline earnings per share expected to fall between 34% and 43%. However, the provision will not impact the company's liquidity or dividend payouts. The company's stable trading performance over the past five years has allowed it to maintain sufficient cash reserves to cover this claim.