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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