SUR - Spur Corporation - Reviewed Condensed Consolidated Results And Cash
10 September 2009 12:00
SUR
SUR
SUR - Spur Corporation - Reviewed Condensed Consolidated Results And Cash
Dividend Declaration For The Year Ended 30 June 2009
Spur Corporation Limited
(Registration number 1998/000828/06)
Share code: SUR
ISIN: ZAE000022653
REVIEWED CONDENSED CONSOLIDATED RESULTS AND CASH DIVIDEND DECLARATION
FOR THE YEAR ENDED 30 JUNE 2009
- Operating profit +14.2%
- Headline earnings +10.5%
CONDENSED INCOME STATEMENT
Reviewed Audited
year ended % year ended
R`000 30/06/09 Change 30/06/08
Revenue 326 774 10.5 295 838
Operating profit 97 661 14.2 85 534
Net interest received 6 219 4 852
Share of loss of associate companies (1 465) (292)
Profit before tax 102 415 13.7 90 094
Total income tax expense (38 574) (30 492)
Profit for the year 63 841 7.1 59 602
Attributable to:
Equity holders of parent 63 264 6.7 59 266
Minority interests 577 336
Basic earnings per share (cents) 71.94 7.0 67.23
Diluted earnings per share (cents) 70.61 8.5 65.07
Distribution per share (cents) 55.00 - 55.00
RECONCILIATION OF HEADLINE EARNINGS
Reviewed Audited
year ended % year ended
R`000 30/06/09 Change 30/06/08
Earnings attributable to ordinary
shareholders 63 264 6.7 59 266
Headline earnings adjustments:
Impairment of goodwill 1 583 -
Impairment of property, plant and
equipment 8 461 8 174
Loss on disposal of property, plant
and equipment (Note 1) 1 168 1
Profit on disposal of minority share
in subsidiary company - (46)
Headline earnings 74 476 10.5 67 395
CONDENSED BALANCE SHEET
Reviewed Audited at
R`000 at 30/06/09 30/06/08
ASSETS
NON-CURRENT ASSETS 398 399 427 940
Property, plant and equipment 84 429 98 890
Intangible assets and goodwill 279 970 281 867
Investments and loans 14 651 24 520
Deferred tax 16 618 18 966
Other non-current asset 2 731 3 697
CURRENT ASSETS 147 840 129 194
Inventory 6 066 6 624
Trade and other receivables 54 320 52 381
Tax receivable 3 567 3 324
Cash and cash equivalents 83 887 66 865
TOTAL ASSETS 546 239 557 134
EQUITY AND LIABILITIES
CAPITAL AND RESERVES 434 320 437 102
Ordinary share capital 1 1
Share premium (net of treasury
shares) (25 343) (12 970)
Foreign currency translation reserve 8 888 26 778
Share-based payments reserve 20 554 19 030
Retained earnings 425 919 399 948
Total equity attributable to equity
holders of the parent 430 019 432 787
Minority shareholders` interest 4 301 4 315
NON-CURRENT LIABILITIES 60 237 57 636
Long-term loans payable 11 413 15 579
Operating lease liability 1 352 1 321
Deferred tax 47 472 40 736
CURRENT LIABILITIES 51 682 62 396
Trade and other payables 42 080 51 053
Shareholders for distribution 398 352
Tax payable 6 351 8 729
Bank overdraft 2 853 2 262
TOTAL EQUITY AND LIABILITIES 546 239 557 134
CONDENSED CASH FLOW STATEMENT
Reviewed Audited*
year ended year ended
R`000 30/06/09 30/06/08
Operating profit before working capital changes 118 205 112 927*
Working capital changes (6 321) (8 474)*
Cash generated from operations 111 884 4 453
Net interest received 5 803 4 852
Taxation paid (34 292) 24 763)
Distributions paid (47 722) 50 199)
Cash flow from operating activities 35 673 34 343
Cash flow from investing activities (15 546) (32 414)
Cash flow from financing activities (3 550) 18 656
Net movement in cash and cash equivalents 16 577 20 585
Adjustment for foreign exchange fluctuations on
cash held (146) (200)*
Net cash and cash equivalents at beginning of year 64 603 44 218
Net cash and cash equivalents at end of year 81 034 64 603
*Restated - refer note 2.
CONDENSED STATEMENT OF CHANGES IN EQUITY
Ordinary share Retained
capital & premium earnings & minority
R`000 (net of treasury shares) shareholders` interest
Balance at 1 July 2007 37 280 341 411
Profit for the year 59 266
Distributions (50 249)
Share-based payments (net of taxes)
Effect of change in tax rate
Foreign currency translation
Foreign exchange loss on net investment
in foreign subsidiaries (net of taxes)
Minority interests` share of profit 336
Foreign exchange 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 year 63 264
Distributions (net of taxes) (10 360) (37 547)
Share-based payments (net of taxes)
Foreign currency translation
Foreign exchange loss on net investment
in foreign subsidiaries (net of taxes)
Minority interests` share of profit 577
Foreign exchange effect
on minorities (143)
Acquisition of minority
interest in subsidiary (194)
Shares repurchased by subsidiary (2 013)
Balance at 30 June 2009 (25 342) 430 220
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 (net of taxes) 1 524 1 524
Effect of change in tax rate (311) (311)
Foreign currency translation 23 260 23 260
Foreign exchange loss on net investment in foreign
subsidiaries (net of taxes) (3 515) (3 515)
Minority interests` share of profit 336
Foreign exchange 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 year 63 264
Distributions (net of taxes) (47 907)
Share-based payments (net of taxes) 1 524 1 524
Foreign currency translation (14 831) (14 831)
Foreign exchange loss on net investment in foreign
subsidiaries (net of taxes) (3 202) (3 202)
Minority interests` share of profit 577
Foreign exchange effect on minorities 143 -
Acquisition of minority interest in subsidiary (194)
Shares repurchased by subsidiary (2 013)
Balance at 30 June 2009 29 442 434 320
CONDENSED SEGMENT REPORT
Reviewed Audited
year ended year ended
30/06/09 30/06/08
R`000
REVENUE
Wholesale and distribution 91 578 80 603
Franchise - Spur (SA only) 115 836 107 982
Franchise - Other 29 808 28 165
Retail outlets 83 846 75 197
Corporate services 5 706 3 891
Group revenue 326 774 295 838
OPERATING PROFIT/(LOSS)
Wholesale and distribution 33 962 26 349
Franchise - Spur (SA only) 97 525 91 539
Franchise - Other 14 198 12 705
Retail outlets (14 536) (11 101)
Corporate services (33 488) (33 958)
Group operating profit 97 661 85 534
SUPPLEMENTARY INFORMATION
Reviewed Audited
year ended % year ended
30/06/09 Change 30/06/08
Statistics
Shares in issue (000`s) (Note 3) 87 865 88 156
Weighted average number of shares in
issue (000`s) 87 942 88 156
Headline earnings per share (cents) 84.69 10.8 76.45
Diluted headline earnings per share
(cents) 83.12 12.3 73.99
Net asset value per share (cents) 494.30 -0.3 495.83
NOTES
1. The loss on disposal of property, plant and equipment relates to the
assets of an associate company that were scrapped as part of the relocation
of an outlet owned by the associate to new trading premises.
2. Foreign exchange differences arising on the translation of foreign
entities from their functional currencies to the group`s reporting currency
were reallocated in the condensed cash flow statement for the year ended 30
June 2008 to accord with the allocation basis applied to such foreign
exchange differences in the current year. The directors have determined that
this allocation basis results in a more accurate reflection of true cash flow
movements.
3. Shares in issue less shares repurchased by a wholly owned subsidiary
company and the share incentive special purpose entity.
BASIS OF ACCOUNTING
KPMG Inc., the group`s independent auditor has reviewed the provisional
financial statements contained in this provisional report, and has expressed
an unmodified conclusion on the provisional financial statements. The review
report is available for inspection at the company`s registered office. These
provisional financial statements for the year ended 30 June 2009 have been
prepared in accordance with accounting policies that comply with
International
Financial Reporting Standards ("IFRS") and IAS 34 - Interim Financial
Reporting, and have been consistently applied with those adopted for the year
ended 30 June 2008, excluding items mentioned in note 2.
FINANCIAL AND OPERATIONAL PERFORMANCE
Spur Corporation has again demonstrated the strength of its brands as the
group posted a 10.5% growth in revenue to R326.8 million (2008: R295.8
million) in the most difficult trading conditions experienced in many years.
The restaurant industry continued to face pressure from reduced consumer
spending and high food price inflation. While lower disposable income levels
resulted in reduced frequency of visits to restaurants, the brands`
value-for-money offering sustained customer loyalty and ensured continuous
revenue growth during the year under review. This is reflected in the 8.6%
growth in restaurant turnover in the Spur Steak Ranches brand. Panarottis
Pizza Pasta turnover grew by 4.4% and John Dory`s Fish & Grill by 18.2%.
International restaurant turnover for existing business increased by 3.1%,
with company-owned restaurants (retail outlets) increasing turnover by 11.5%.
Franchise fee income in Spur increased by 8.7% to R112.1 million, Panarottis
by 3.8% to R9.9 million and John Dory`s by 18.1% to R6.6 million.
International franchise fee income increased by 2.4% to R13.4 million.
Operating profit for the period increased by 14.2% to R97.7 million (2008:
R85.5 million). Worldwide recessionary trading conditions led to the group
impairing the assets and goodwill of two of its retail outlets in Australia,
where the impact of the recession in our industry has been more pronounced.
The impact on operating profit is R10.0 million. Headline earnings increased
10.5% to R74.5 million (2008: R67.4 million), with diluted headline earnings
per share growing 12.3% to 83.12 cents (2008: 73.99 cents).
RESTAURANT EXPANSION
Ten new Spurs and one John Dory`s restaurant were opened in South Africa
during the year, while 16 Spur, nine Panarottis and three John Dory`s
restaurants were refurbished or relocated to improved trading locations.
Internationally, new Spur restaurants were opened in Derby in the United
Kingdom and Nairobi, Kenya.
At year end the group had 347 restaurants across its three brands.
Spur has developed a signature store concept for high profile locations, with
the first outlet in this format being the revamped restaurant in the V&A
Waterfront in Cape Town, and new outlets in Bryanston and the Bloemfontein
Waterfront. A further signature store will be opened at the Cape Town
International Airport in late 2009. Further enhancements to the
Panarottis`decor and design are being added, while the roll-out of sushi
belts and decor upgrades in John Dory`s is proving successful.
A summary of the group`s restaurant base at 30 June 2009 is as follows:
Franchise brand South Africa International Total
Spur Steak Ranches 240 29 269
Panarottis Pizza Pasta 50 6 56
John Dory`s Fish & Grill 22 - 22
Total 312 35 347
PROSPECTS
The group plans to open at least 18 new restaurants in the year ahead. This
includes 15 franchised restaurants in South Africa, a new Spur retail outlets
in Aberdeen(Scotland), and two franchised outlets in Perth (Australia) and
Dubai (United Arab Emirates). Opportunities for new restaurants are being
evaluated in several locations in Africa and the United Kingdom to further
expand the group`s footprint.
Substantial increases in electricity costs and higher wage demands will place
pressure on franchisee profitability. Strategies aimed at enhancing
franchisee success and entrenching our brands` positions in the market
include the ongoing improvement in procurement and distribution efficiencies,
customer focused menu engineering, enhancing operational standards and
training, and persuasive marketing.
The recessionary trading conditions are expected to remain a challenge in the
year ahead. However, management believes the group is well placed to continue
to withstand the impact of the current economic climate.
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 R27.3
million, which equates to 28.0 cents per share.
The cash dividend will be paid on Monday, 5 October 2009, to those
shareholders of the company who are recorded in the company`s register on
Friday, 2 October 2009 ("the record date").
The last day to trade (cum dividend) in the company`s shares for purposes of
entitlement to the distribution will be Friday, 25 September 2009. The shares
will commence trading ex dividend on Monday, 28 September 2009. Share
certificates may not be dematerialised or rematerialised between Monday, 28
September 2009 and Friday, 2 October 2009, both days inclusive.
For and on behalf of the Board
A Ambor (Executive Chairman) Cape Town
P van Tonder (Managing Director) 08 September 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),
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) Limited,
70 Marshall Street, Johannesburg, 2001
Sponsor: Sasfin Capital (A division of Sasfin Bank Ltd)
www.spur.co.za
10 September 2009
Date: 10/09/2009 12:00:01 Produced by the JSE SENS Department.
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