SUR
SUR
SUR - Spur - Unaudited condensed consolidated interim results and cash dividend
declaration for the six months ended 31 December 2009
Spur Corporation Limited
(Registration number 1998/000828/06)
Share code: SUR
ISIN: ZAE000022653
("Spur" or "the Company" or "the Group")
UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS AND CASH DIVIDEND DECLARATION
for the six months ended 31 December 2009
* Operating profit +19.4%
* Headline earnings +16.0%
* Dividend per share +18.5%
FINANCIAL AND OPERATIONAL PERFORMANCE
Spur Corporation has delivered a solid performance in the current economic
environment. The group posted a 6.0% growth in revenue to R179.5 million
(2008: R169.4 million), sustained by support from its growing loyal customer
base.
Recessionary pressures continued to impact the restaurant industry locally and
internationally as lower discretionary spending has reduced the frequency of
visits to restaurants. Food inflation again necessitated a menu price increase
but this was limited to 4% during the period.
Spur Steak Ranches increased restaurant turnover by 7.3%, Panarottis Pizza
Pasta turnover grew by 5.3% and John Dory`s Fish & Grill was up by 17.4%.
Franchise fee income in Spur increased by 8.8% to R65.5 million, Panarottis by
7.7% to R5.6 million and John Dory`s by 29.5% to R4.5 million. International
franchise fee income declined by 8.7% to R5.8 million, impacted by the
strengthening of the Rand against the other currencies in which Spur trades.
Profit before tax increased 17.4% to R68.5 million. Excluding one-off items
such as foreign exchange losses and start-up costs on international
restaurants in the current and prior periods, comparable profit before tax
would have increased by 13.0%.
Headline earnings increased 16.0% to R45.4 million (2008: R39.1 million), with
diluted headline earnings per share growing 14.0% to 50.46 cents (2008:
44.25 cents).
An interim cash dividend of 32.0 cents per share has been declared, an increase
of 18.5% over the previous year.
RESTAURANT EXPANSION
Six new Spur, three Panarottis and four John Dory`s restaurants were opened in
South Africa during the reporting period. Internationally, a new Spur
franchised restaurant was opened in Mandurah (Western Australia), a
company-controlled outlet was opened in Aberdeen (Scotland), and a new
franchised restaurant in Maseru (Lesotho) brought the total number of
restaurants in the African region (outside South Africa) to 17.
A summary of the group`s restaurant profile at 31 December 2009 is as follows:
Franchise brand South Africa International Total
Spur Steak Ranches 244 31 275
Panarottis Pizza Pasta 53 6 59
John Dory`s Fish & Grill 25 - 25
Total 322 37 359
PROSPECTS
The past few months have seen improving consumer sentiment owing to lower
interest rates, stabilising inflation and higher real wage increases. Many
economists do not expect a meaningful upturn in consumer spending for the
balance of the year in anticipation of consumers exercising prudence due to
economic pressures, such as rising energy costs.
In this environment, value and affordability remain our primary focus. We are
determined to remain competitive through adhering to brand fundamentals and
our strategic focus of delivering great food, service and a fun environment.
Management is committed to working with franchisees to enhance operational,
procurement and distribution efficiencies to mitigate cost pressures and
sustain profitability.
The FIFA 2010 World Cup heralds an exciting time for the country and support
from our loyal customers, combined with the extended mid-year school holiday,
should impact favourably on trading during this period.
Spur Corporation will continue to pursue its strategy of restaurant expansion
locally and abroad, and plans to open several restaurants in South Africa in
the remainder of the financial year. The group opened its first franchised
Spur Steak Ranch in Dubai in January 2010. Further opportunities are being
investigated in the international territories in which we trade.
INTERIM CASH DIVIDEND
In accordance with a general authority given to the directors at the annual
general meeting held on 11 December 2009, shareholders are advised that the
board of directors of the company has approved a cash dividend of
R31.2 million, which equates to 32.0 cents per share.
The cash dividend will be paid on Tuesday, 23 March 2010, to those shareholders
of the company who are recorded in the company`s register on Friday,
19 March 2010 ("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, 12 March 2010. The shares will
commence trading ex dividend on Monday, 15 March 2010.
Share certificates may not be dematerialised or rematerialised between Monday,
15 March 2010 and Friday, 19 March 2010, both days inclusive.
For and on behalf of the Board
A Ambor (Executive Chairman) Cape Town
P van Tonder (Managing Director) 23 February 2010
ABRIDGED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited six Unaudited six
months ended months ended
R`000 31/12/09 31/12/08
Revenue 179 450 169 371
Operating profit before finance income 65 854 55 135
Net finance income 2 658 3 411
Share of loss of equity accounted investees
(net of income tax) - (178)
Profit before tax 68 512 58 368
Total income tax expense (22 693) (18 971)
Profit for the period 45 819 39 397
Other comprehensive income/(losses): (6 130) (5 168)
Exchange differences on translating foreign
operations (5 923) (8 831)
Income tax relating to components of other
comprehensive income (207) 3 663
Total comprehensive income for the period 39 689 34 229
Profit attributable to:
Owners of the company 45 381 39 125
Non-controlling interest 438 272
Profit for the period 45 819 39 397
Total comprehensive income attributable to:
Owners of the company 39 344 34 069
Non-controlling interest 345 160
Total comprehensive income for the period 39 689 34 229
Per share (cents)
Basic earnings 51.65 44.49
Diluted earnings 50.46 44.25
Distribution 32.00 27.00
Audited
% year ended
R`000 change 30/06/09
Revenue 6.0 326 774
Operating profit before finance income 19.4 97 661
Net finance income 6 219
Share of loss of equity accounted investees (net of
income tax) (1 465)
Profit before tax 17.4 102 415
Total income tax expense (38 574)
Profit for the period 16.3 63 841
Other comprehensive income/(losses): (18 033)
Exchange differences on translating foreign operations (19 129)
Income tax relating to components of other
comprehensive income 1 096
Total comprehensive income for the period 45 808
Profit attributable to:
Owners of the company 63 264
Non-controlling interest 577
Profit for the period 63 841
Total comprehensive income attributable to:
Owners of the company 45 374
Non-controlling interest 434
Total comprehensive income for the period 45 808
Per share (cents)
Basic earnings 16.1 71.94
Diluted earnings 14.0 70.61
Distribution 18.5 55.00
ABRIDGED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited at Unaudited at Audited at
R`000 31/12/09 31/12/08 30/06/09
ASSETS
Non-current assets 402 119 413 406 398 399
Property, plant and equipment 87 689 88 370 84 429
Intangible assets and goodwill 279 714 281 419 279 970
Investments and loans 15 075 16 941 14 651
Deferred tax 17 299 23 959 16 618
Other non-current asset 2 342 2 717 2 731
Current assets 150 943 151 408 147 840
Inventory 5 262 7 225 6 066
Trade and other receivables 65 577 64 734 54 320
Current tax asset 4 120 3 831 3 567
Cash and cash equivalents 75 984 75 618 83 887
TOTAL ASSETS 553 062 564 814 546 239
EQUITY
Total equity 407 177 445 898 434 320
Ordinary share capital 1 1 1
Share premium 6 7 6
Shares repurchased by
subsidiaries (29 910) (25 349) (25 349)
Foreign currency translation
reserve 2 851 21 722 8 888
Share-based payments reserve - 19 792 20 554
Retained earnings 429 956 425 504 425 919
Total equity attributable to
equity holders of the company 402 904 441 677 430 019
Non-controlling interest 4 273 4 221 4 301
LIABILITIES
Non-current liabilities 63 583 58 810 60 237
Long-term loans payable 9 289 13 741 11 413
Operating lease liability 3 271 996 1 352
Deferred tax 51 023 44 073 47 472
CURRENT LIABILITIES 82 302 60 106 51 682
Trade and other payables 55 302 48 436 42 080
Shareholders for distribution 1 748 463 398
Tax payable 20 185 7 892 6 351
Bank overdraft 5 067 3 315 2 853
TOTAL EQUITY AND LIABILITIES 553 062 564 814 546 239
ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited six Unaudited six Audited
months ended months ended year ended
R`000 31/12/09 31/12/08 30/06/09
Operating profit before
working capital changes 71 780 64 475 118 205
Working capital changes (2 229) (15 548) (6 321)
Cash generated from
operations 69 551 48 927 111 884
Net interest received 2 658 3 411 5 803
Tax paid (18 094) (17 166) (34 292)
Distributions paid (47 970) (23 932) (47 722)
Net cash flow from operating
activities 6 145 11 240 35 673
Cash flow from investing
activities (16 193) 1 817 (15 546)
Cash flow from financing
activities (60) (3 824) (3 550)
Net movement in cash and
cash equivalents (10 108) 9 233 16 577
Effect of foreign exchange
fluctuations (9) (1 533) (146)
Net cash and cash
equivalents at beginning of
period 81 034 64 603 64 603
Net cash and cash
equivalents at end of period 70 917 72 303 81 034
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Ordinary share capital
& share premium (net Other
R`000 of treasury shares) reserves
Balance at 1 July 2008 (12 969) 45 808
Total comprehensive income for the year - (17 890)
Profit for the year - -
Other comprehensive income - (17 890)
Transactions with owners, recorded
directly in equity
Contributions by and distributions to
owners (12 373) 1 524
Own shares acquired (2 013) -
Distributions to equity holders (net of
taxes) (10 360) -
Share-based payments transactions (net
of tax) - 1 524
Changes in ownership interests in
subsidiaries that do not result
in a loss of control - -
Acquisition of minority interest in
subsidiary - -
Total transactions with owners,
recorded directly in equity (12 373) 1 524
Balance at 30 June 2009 (25 342) 29 442
Total comprehensive income for the
period - (6 037)
Profit for the period - -
Other comprehensive income - (6 037)
Transactions with owners, recorded
directly in equity
Contributions by and distributions to
owners (4 561) (20 554)
Distributions to equity holders - -
Impact of incentive scheme (including
tax) (note 2) (4 561) -
Share-based payments transactions (net
of tax) - 1 211
Transfer of share-based payment reserve
to retained earnings - (21 765)
Balance at 31 December 2009 (29 903) 2 851
Retained earnings
and non-controlling
R`000 interest/(deficit) Total
Balance at 1 July 2008 404 263 437 102
Total comprehensive income for the year 63 698 45 808
Profit for the year 63 841 63 841
Other comprehensive income (143) (18 033)
Transactions with owners, recorded
directly in equity
Contributions by and distributions to
owners (37 547) (48 396)
Own shares acquired - (2 013)
Distributions to equity holders (net of taxes) (37 547) (47 907)
Share-based payments transactions (net of tax) - 1 524
Changes in ownership interests in
subsidiaries that do not result
in a loss of control (194) (194)
Acquisition of minority interest in
subsidiary (194) (194)
Total transactions with owners, recorded
directly in equity (37 741) (48 590)
Balance at 30 June 2009 430 220 434 320
Total comprehensive income for the period 45 726 39 689
Profit for the period 45 819 45 819
Other comprehensive income (93) (6 130)
Transactions with owners, recorded
directly in equity
Contributions by and distributions to
owners (41 717) (66 832)
Distributions to equity holders (24 975) (24 975)
Impact of incentive scheme (including tax)
(note 2) (38 507) (43 068)
Share-based payments transactions (net of tax) - 1 211
Transfer of share-based payment reserve to
retained earnings 21 765 -
Balance at 31 December 2009 434 229 407 177
ABRIDGED CONSOLIDATED OPERATING SEGMENT REPORT
Unaudited six Unaudited six Unaudited
months ended months ended year ended
R`000 31/12/09 31/12/08 30/06/09
External revenues
Manufacturing 46 126 41 988 79 490
Franchise - South Africa 75 042 68 383 132 761
Other South Africa 8 806 8 601 17 793
Total South Africa segments 129 974 118 972 230 044
United Kingdom 30 086 28 702 55 840
Australia 16 291 18 175 34 048
Other International 3 099 3 522 6 842
Total International segments 49 476 50 399 96 730
TOTAL EXTERNAL REVENUES 179 450 169 371 326 774
Profit/(loss) before tax
Manufacturing 20 351 17 459 33 534
Franchise - South Africa 59 760 55 235 105 922
Other South Africa (77) (715) (1 531)
Total South Africa segments 80 034 71 979 137 925
Unallocated - South Africa (12 466) (10 861) (21 978)
Total South Africa 67 568 61 118 115 947
United Kingdom (257) 245 (1 540)
Australia 522 (1 674) (11 824)
Other International 2 653 3 152 5 966
Total International segments 2 918 1 723 (7 398)
Unallocated - International (1 974) (4 473) (6 134)
Total International 944 (2 750) (13 532)
TOTAL PROFIT/(LOSS) BEFORE
TAX 68 512 58 368 102 415
The basis for reporting segmental financial information has been changed to
accord with IFRS 8: Operating Segments. Previously, segmental information was
provided by organising the group into three major operating divisions. With the
implementation of IFRS 8, operating segments were identified based on financial
information regularly reviewed by the Spur Corporation Limited Board
(identified as the Chief Operating Decision Maker ("CODM") of the Group for
IFRS 8 reporting purposes) for performance assessments and resource
allocations. The Group early adopted the amendment to IFRS 8, which becomes
effective for annual periods beginning on or after 1 January 2010, which does
not require segment assets to be disclosed if such information is not regularly
provided to the CODM. Accordingly, segment assets have not been disclosed.
RECONCILIATION OF HEADLINE EARNINGS
Unaudited six Unaudited six
months ended months ended
R`000 31/12/09 31/12/08
Profit attributable to ordinary shareholders 45 381 39 125
Headline earnings adjustments:
Impairment of goodwill - -
Impairment of property, plant and equipment - -
(Profit)/loss on disposal of property,
plant and equipment (12) -
Headline earnings 45 369 39 125
Audited
% year ended
R`000 change 30/06/09
Profit attributable to ordinary shareholders 16.0 63 264
Headline earnings adjustments:
Impairment of goodwill 1 583
Impairment of property, plant and equipment 8 461
(Profit)/loss on disposal of property, plant and
equipment 1 168
Headline earnings 16.0 74 476
SUPPLEMENTARY INFORMATION
Unaudited six Unaudited six
months ended months ended
31/12/09 31/12/08
Shares in issue (000`s) (note 3) 87 865 87 865
Weighted average number of shares in issue
(000`s) 87 865 87 942
Headline earnings per share (cents) 51.65 44.49
Diluted headline earnings per share (cents) 50.46 44.25
Net asset value per share (cents) 463.41 507.48
Audited
% year ended
Change 30/06/09
Shares in issue (000`s) (note 3) 87 865
Weighted average number of shares in issue (000`s) 87 942
Headline earnings per share (cents) 16.1 84.69
Diluted headline earnings per share (cents) 14.0 83.12
Net asset value per share (cents) (8.7) 494.30
NOTES
1. The Group`s interim condensed consolidated financial statements have been
prepared in accordance with IAS 34 - Interim Financial Reporting. The
accounting policies and methods of computation applied in the preparation of
these financial statements are in accordance with IFRS and, except as presented
below, are consistent with those applied in the preparation of the Group`s
annual financial statements for the year ended 30 June 2009. The Group adopted
the revised IAS 1, IFRS 8 and Circular 3/2009 (the revised Headline Earnings
per Share circular) during the period under review. The presentation of the
financial statements (IAS 1) and operating segment disclosures (IFRS 8) have
been changed accordingly, with no adjustment necessary on the adoption of
Circular 3/2009.
2. The first tranche of options/shares granted in terms of the Spur Management
Incentive Scheme ("the Scheme") approved by shareholders in General Meeting on
15 December 2004 (as more fully described in note 19 on page 72 of the Annual
Report for the year ended 30 June 2009) vested with directors and employees on
18 December 2009. The directors, in accordance with the rules of the Scheme,
anticipated the vesting date of the second tranche of options originally
intended to vest in December 2010, to 18 December 2009 and furthermore elected
to settle all the options/shares in cash. Consequently, no shares were issued
external to the group. The price at which all transactions were concluded was
the ten-day volume-weighted average price of the company`s share from
3 December 2009 to 17 December 2009 (both dates inclusive). Details of
directors` dealings were published on SENS on 21 December 2009.
3. Shares in issue less shares repurchased by a wholly owned subsidiary
company and share incentive special purpose entity.
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 (* non-executive)
Company secretary: R van Dijk
Registered Office: 1 Waterford Mews, Century Blvd, Century City, 7441
Transfer Secretaries: Computershare Investor Services (Pty) Limited,
70 Marshall Street, Johannesburg, 2001
25 February 2010
Sponsor: Sasfin Capital (A division of Sasfin Bank Ltd)
www.spur.co.za
Date: 25/02/2010 12:00:02 Produced by the JSE SENS Department.
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