SUR - Spur Corporation Limited - Unaudited condensed consolidated interim
26 February 2009 12:00
SUR
SUR                                                                             
SUR - Spur Corporation Limited - Unaudited condensed consolidated interim       
results for the six months ended 31 December 2008                               
Spur Corporation Limited                                                        
(Registration number 1998/000828/06)                                            
Share code: SUR                                                                 
ISIN: ZAE000022653                                                              
UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS                                
for the six months ended 31 December 2008                                       
Profit before tax +12.8%                                                        
ABRIDGED INCOME STATEMENT                                                       
                                            Unaudited            Unaudited      
six months ended     six months ended      
R`000                                         31/12/08             31/12/07     
Revenue                                        169 371              144 850     
Operating profit                                55 135               49 581     
Net interest received                            3 411                2 212     
Loss from associate companies                    (178)                 (64)     
Profit before tax                               58 368               51 729     
Tax                                           (18 971)             (15 097)     
Taxes relating to foreign subsidiaries               -                    -     
Profit for the period                           39 397               36 632     
Attributable to:                                                                
Equity holders of parent                        39 125               36 304     
Minority interests                                 272                  328     
Earnings per share (cents)                       44.49                41.18     
Diluted earnings per share (cents)               44.25                39.56     
Distribution per share (cents)                   27.00                28.00     
Audited      
                                                    %           year ended      
R`000                                           Change             30/06/08     
Revenue                                           16.9              295 838     
Operating profit                                  11.2               85 534     
Net interest received                                                 4 852     
Loss from associate companies                                         (292)     
Profit before tax                                 12.8               90 094     
Tax                                               25.7             (29 016)     
Taxes relating to foreign subsidiaries                              (1 476)     
Profit for the period                              7.5               59 602     
Attributable to:                                                                
Equity holders of parent                           7.8               59 266     
Minority interests                                                      336     
Earnings per share (cents)                         8.0                67.23     
Diluted earnings per share (cents)                11.9                65.07     
Distribution per share (cents)                   (3.6)                55.00     
RECONCILIATION OF HEADLINE EARNINGS                                             
                                            Unaudited            Unaudited      
                                     six months ended     six months ended      
R`000                                         31/12/08             31/12/07     
Earnings attributable to ordinary                                               
shareholders                                    39 125               36 304     
Headline earnings adjustments:                                                  
Loss on sale of property, plant and                                             
equipment                                            -                    -     
Impairment loss on property, plant                                              
and equipment                                        -                    -     
Profit on disposal of minority share                                            
in subsidiary company                                -                    -     
Headline earnings                               39 125               36 304     
                                                                   Audited      
%     year ended      
R`000                                                 Change       30/06/08     
Earnings attributable to ordinary shareholders           7.8         59 266     
Headline earnings adjustments:                                                  
Loss on sale of property, plant and equipment                             1     
Impairment loss on property, plant and equipment                      8 174     
Profit on disposal of minority share in                                         
subsidiary company                                                     (46)     
Headline earnings                                        7.8         67 395     
ABRIDGED BALANCE SHEET                                                          
                                  Unaudited       Unaudited        Audited      
R`000                            at 31/12/08     at 31/12/07    at 30/06/08     
ASSETS                                                                          
NON-CURRENT ASSETS                   413 406         403 920        427 940     
Property, plant and equipment         88 370          88 234         98 890     
Intangible assets                    281 419         272 596        281 867     
Investments and loans                 16 941          27 129         24 520     
Deferred tax (note 1)                 23 959          15 961         18 966     
Other non-current asset                2 717               -          3 697     
CURRENT ASSETS                       151 408         124 232        129 194     
Inventory                              7 225           5 500          6 624     
Trade and other receivables           64 734          54 830         52 381     
Tax receivable                         3 831           1 910          3 324     
Cash and cash equivalents             75 618          61 992         66 865     
TOTAL ASSETS                         564 814         528 152        557 134     
EQUITY AND LIABILITIES                                                          
CAPITAL AND RESERVES                 445 898         418 006        437 102     
Ordinary share capital                     1               1              1     
Share premium                              7          38 668         11 331     
Shares repurchased by                                                           
subsidiary companies                (25 349)        (26 955)       (24 301)     
Foreign currency translation                                                    
reserve                               21 722           6 554         26 778     
Share-based payments reserve          19 792          18 569         19 030     
Retained earnings                    425 504         376 986        399 948     
Total equity attributable to                                                    
equity holders of the parent         441 677         413 823        432 787     
Minority shareholders` interests       4 221           4 183          4 315     
NON-CURRENT LIABILITIES               58 810          56 751         57 636     
Long term loans payable               13 741          17 077         15 579     
Operating lease liability                996           1 502          1 321     
Deferred tax (note 1)                 44 073          38 172         40 736     
CURRENT LIABILITIES                   60 106          53 395         62 396     
Trade and other payables              48 436          45 596         51 053     
Shareholders for distribution            463             347            352     
Tax payable                            7 892           5 394          8 729     
Bank overdraft                         3 315           2 058          2 262     
TOTAL EQUITY AND LIABILITIES         564 814         528 152        557 134     
ABRIDGED CASH FLOW STATEMENT                                                    
                             Unaudited            Unaudited        Audited      
                      six months ended     six months ended     year ended      
R`000                          31/12/08             31/12/07       30/06/08     
Cash generated from                                                             
operations                       64 475               55 495        110 013     
Net interest received             3 411                2 212          4 852     
Taxation paid                  (17 166)             (15 210)       (24 763)     
Distributions paid             (23 932)             (25 521)       (50 199)     
Working capital changes        (15 548)              (7 430)        (8 865)     
Cash flow from                                                                  
operating activities             11 240                9 546         31 038     
Cash flow from                                                                  
investing activities              1 817             (11 584)       (32 414)     
Cash flow from                                                                  
financing activities            (3 824)               18 414         18 656     
Net movement in cash                                                            
and cash equivalents              9 233               16 376         17 280     
Adjustment for foreign                                                          
exchange fluctuations           (1 533)                (660)          3 105     
Net cash and cash                                                               
equivalents at                                                                  
beginning of period              64 603               44 218         44 218     
Net cash and cash                                                               
equivalents at end of period     72 303               59 934         64 603     
ABRIDGED STATEMENT OF CHANGES IN EQUITY                                         
                                  Ordinary share         Retained earnings      
                               capital & premium                & minority      
R`000                    (net of treasury shares)     shareholder interests     
Balance at 1 July 2007                     37 280                   341 411     
Profit for the year                                                  59 266     
Distributions                            (50 249)                               
Share-based payments reserve                                                    
Effect of change in tax rate                                                    
Foreign currency translation reserve                                            
Foreign exchange loss on net investment                                         
in foreign subsidiaries net of taxes                                            
Minority shareholders` share of profits                                 336     
Foreign currency translation reserve                                            
effect on minorities                                                     95     
Issue of shares in subsidiary to                                                
minority shareholder                                                  3 155     
Balance at 1 July 2008                   (12 969)                   404 263     
Profit for the period                                               39 125      
Distributions                            (10 220)                  (13 823)     
Tax on distributions received on                                                
treasury shares                             (139)                               
Shares repurchased by subsidiary          (2 013)                               
Share-based payments reserve                                                    
Foreign currency translation reserve                                            
Foreign exchange loss on net investment                                         
in foreign subsidiaries net of taxes                                            
Minority shareholders` share of profits                                 272     
Foreign currency translation reserve                                            
effect on minorities                                                  (112)     
Balance at 31 December 2008              (25 341)                   429 725     
Other                   
R`000                                                 reserves        Total     
Balance at 1 July 2007                                  24 945      403 636     
Profit for the year                                                  59 266     
Distributions                                                      (50 249)     
Share-based payments reserve                             1 524        1 524     
Effect of change in tax rate                             (311)        (311)     
Foreign currency translation reserve                    23 260       23 260     
Foreign exchange loss on net investment in foreign                              
subsidiaries net of taxes                              (3 515)      (3 515)     
Minority shareholders` share of profits                                 336     
Foreign currency translation reserve effect on                                  
minorities                                                (95)            -     
Issue of shares in subsidiary to minority shareholder                 3 155     
Balance at 1 July 2008                                  45 808      437 102     
Profit for the period                                                39 125     
Distributions                                                      (24 043)     
Tax on distributions received on treasury shares                      (139)     
Shares repurchased by subsidiary                                    (2 013)     
Share-based payments reserve                               762          762     
Foreign currency translation reserve                     5 535        5 535     
Foreign exchange loss on net investment in foreign                              
subsidiaries net of taxes                             (10 703)     (10 703)     
Minority shareholders` share of profits                                 272     
Foreign currency translation reserve effect                                     
on minorities                                              112            -     
Balance at 31 December 2008                             41 514      445 898     
ABRIDGED SEGMENT REPORT                                                         
Unaudited            Unaudited        Audited      
                      six months ended     six months ended     year ended      
R`000                          31/12/08             31/12/07       30/06/08     
REVENUE                                                                         
Wholesale and distribution       48 398               42 558         80 603     
Franchise - Spur (SA only)       59 729               53 706        107 982     
Franchise - Other                14 995               13 826         28 165     
Retail stores                    44 058               33 058         75 197     
Corporate services                2 191                1 702          3 891     
Group revenue                   169 371              144 850        295 838     
OPERATING PROFIT                                                                
Wholesale and distribution       17 872               14 720         26 349     
Franchise - Spur (SA only)       50 746               46 047         91 539     
Franchise - Other                 5 603                6 431         12 705     
Retail stores                   (1 753)                  855       (11 101)     
Corporate services             (17 333)             (18 472)       (33 958)     
Group operating profit           55 135               49 581         85 534     
SUPPLEMENTARY INFORMATION                                                       
                                            Unaudited            Unaudited      
                                     six months ended     six months ended      
31/12/08             31/12/07      
Shares in issue (000`s) (note 2)                87 866               88 156     
Weighted average number of shares in                                            
issue (000`s)                                   87 942               88 156     
Headline earnings per share (cents)              44.49                41.18     
Diluted headline earnings per share (cents)      44.25                39.56     
Net asset value per share (cents)               507.48               474.17     
                                                                   Audited      
%           year ended      
                                               Change             30/06/08      
Shares in issue (000`s) (note 2)                                     88 156     
Weighted average number of shares in                                            
issue (000`s)                                                        88 156     
Headline earnings per share (cents)                8.0                76.45     
Diluted headline earnings per share (cents)       11.9                73.99     
Net asset value per share (cents)                  7.0               495.83     
NOTES                                                                           
1. The classification of deferred tax assets and liabilities was restated in    
the balance sheet as at 31 December 2007 as a result of the adoption of         
IFRIC 11 - Scope of IFRS 2: Group and Treasury Transactions, by a subsidiary    
company of the group during the 2008 financial year. A deferred tax asset       
that was previously recognised on consolidation and classified as a deferred    
tax asset in the group balance sheet is now recognised in a subsidiary          
company with a deferred tax liability resulting in a reduction of both the      
group deferred tax asset and deferred tax liability of R7.966 million.          
2. Shares in issue less shares repurchased by a wholly owned subsidiary company 
and share incentive trust.                                                      
BASIS OF ACCOUNTING                                                             
These unaudited financial results for the six months ended 31 December 2008     
have been prepared in accordance with International Financial Reporting         
Standards (IFRS) and IAS 34 - Interim Financial Reporting. The accounting       
policies and methods of computation applied in the preparation of these results 
are consistent with those applied in the preparation of the group`s annual      
financial statements for the year ended 30 June 2008.                           
FINANCIAL AND OPERATIONAL REVIEW                                                
Spur Corporation has again demonstrated its resilience in the face of increasing
pressure on consumers, with the group recording encouraging revenue growth of   
16.9% to R169.4 million in the first six months of the 2009 financial year.     
The value-for-money offering and affordability of the group`s brands, together  
with the family eating and entertainment experience, has proved popular with    
consumers in the tougher economic climate.                                      
The Spur brand continued to grow market share and lifted revenue by 11.2%.      
Panarottis` revenue was steady whilst John Dory`s grew turnover by 25.0% for the
period. Internationally, franchise revenue advanced by 10.0% while              
company-owned restaurants increased revenue by 33.3%, benefiting in part by     
the addition of two new retail restaurants in the second half of the 2008       
financial year.                                                                 
Franchise fee income in Spur rose by 11.5% to R57.8 million, Panarottis by 4.0% 
to R5.1 million and John Dory`s by 25.4% to R3.4 million. International         
franchise fee income increased by 12.9% to R5.7 million.                        
The operating margin declined from 34.2% to 32.6%, impacted significantly by    
exceptional foreign exchange losses of R3.0 million (2008: R0.4 million) in the 
group`s international operations, arising mainly from the substantial weakening 
of the Pound Sterling against the Euro in December 2008. Had these losses not   
been incurred, the operating margin would have remained constant.               
Operating profit for the period rose 11.2% to R55.1 million, a creditable       
performance in an environment of declining local and international economies.   
The group`s headline earnings rose 7.8% to R39.1 million. The lower average     
share price for the period has reduced the dilutionary impact of the group`s    
potential ordinary shares, thereby enhancing the diluted headline earnings per  
share which increased 11.9% to 44.25 cents per share. The increase in the       
group`s effective tax rate for the period arises primarily from the Secondary   
Tax on Companies charge of R1.5 million in respect of the final 2008 dividend.  
RESTAURANT FOOTPRINT                                                            
Spur Corporation reached the 350 restaurant mark following the opening of eight 
new restaurants during the past six months. These comprised six Spur Steak      
Ranches, one Panarottis and one John Dory`s restaurant. Internationally the     
group has 35 restaurants.                                                       
In the second half of the year, a further seven new restaurants are planned in  
South Africa whilst internationally, new Spur outlets are scheduled to open in  
Derby in the United Kingdom, Lusaka and Nairobi. New opportunities are being    
evaluated in Africa, the United Kingdom and Ireland.                            
A summary of the group`s restaurant base at 31 December 2008 is as follows:     
Franchise brand                    South Africa     International     Total     
Spur Steak Ranches                          241                28       269     
Panarottis Pizza Pasta                       52                 7        59     
John Dory`s Fish & Grill                     22                 -        22     
Total                                       315                35       350     
PROSPECTS                                                                       
The economic environment is expected to remain challenging in 2009. Although    
declining interest rates, the tax relief granted in the recent Budget, lower    
fuel prices and an easing of food price inflation are positive factors for      
consumer spending, it is anticipated that disposable income levels will remain  
under pressure. The group is determined to continue to enhance its value        
proposition to facilitate increased foot traffic in all its brands.             
INTERIM CASH DIVIDEND                                                           
In accordance with a general authority given to the directors at the annual     
general meeting held on 5 December 2008, shareholders are advised that the      
board of directors of the company has approved a cash dividend of               
R26.4 million, which equates to 27.0 cents per share.                           
The cash dividend will be paid on Monday, 23 March 2009, to those shareholders  
of the company who are recorded in the company`s register on Friday,            
20 March 2009 ("the record date").                                              
The last day to trade (cum dividend) in the company`s shares for purposes of    
entitlement to the dividend will be Friday, 13 March 2009. The shares will      
commence trading ex dividend on Monday, 16 March 2009.                          
Share certificates may not be dematerialised or rematerialised between Monday,  
16 March 2009 and Friday, 20 March 2009, both days inclusive.                   
For and on behalf of the Board                                                  
A Ambor (Executive Chairman)                                      Cape Town     
P van Tonder (Managing Director)                           25 February 2009     
Directors: A Ambor (Executive Chairman), P van Tonder (Managing Director),      
M Farrelly, K Getz*, D Hyde*, P Joffe, M Kuzwayo*, K Madders MBE* (British),    
J Rabb*, K Robertson, R van Dijk. Company secretary: R van Dijk                 
(* non-executive)                                                               
Spur Corporation Limited                                                        
(Registration number 1998/000828/06)                                            
Share code: SUR                                                                 
ISIN: ZAE000022653                                                              
Registered Office                                                               
1 Waterford Mews, Century Blvd, Century City, 7441                              
Transfer Secretaries                                                            
Computershare Investor Services (Pty) Ltd, 70 Marshall Street,                  
Johannesburg, 2001                                                              
Sponsor: Sasfin Capital (A division of Sasfin Bank Ltd)                         
www.spur.co.za                                                                  
Date: 26/02/2009 12:00:01 Produced by the JSE SENS Department.                  
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