SUR
SUR
SUR - Spur Corporation Limited - Unaudited condensed consolidated interim
results and cash dividend declaration for the six months ended 31 December
2010
Spur Corporation Limited
(Registration number 1998/000828/06)
Share code: SUR
ISIN: ZAE000022653
UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS AND CASH DIVIDEND DECLARATION
for the six months ended 31 December 2010
Revenue UP 13.3%
Diluted headline earnings per share UP 9.5%
FINANCIAL AND OPERATIONAL PERFORMANCE
Spur Corporation showed strong revenue growth of 13.3% to R203.3 million,
benefiting from new restaurant openings, the launch of the Spur Family Card
loyalty programme, increase in frequency of customer visits and value-based
promotional campaigns across all brands.
Spur Steak Ranches increased restaurant turnover by 11.1%, Panarottis Pizza
Pasta by 5.3% and John Dory`s Fish & Grill by 11.3%. Franchise fee income in
Spur increased by 11.3% to R70.2 million, Panarottis by 6.8% to R6.0 million
and John Dory`s by 10.8% to R5.0 million.
Food prices were relatively stable for most of the period and there were no
menu price increases during the past six months in South Africa.
Trading conditions in the international markets were more challenging than the
local environment, compounded by the extreme weather conditions in the United
Kingdom in December, which impacted trading in several locations.
International revenue, comprising franchise fee income and restaurant
turnover, grew by 16.3% to R57.5 million, boosted by the opening of two new
outlets (including one group-owned outlet) and the consolidation of three
additional existing outlets.
Manufacturing and distribution revenue was 14.4% higher at R54.9 million. The
group`s manufacturing operations were consolidated into one facility in Cape
Town, with the Johannesburg building being sold for R16.75 million subsequent
to the reporting date. A building to house the group`s decor production in
Cape Town was purchased subsequent to the reporting date at a cost of
R10.0 million.
Profit before income tax increased by 6.5% to R72.9 million. Comparable
operating profit before finance income, excluding exceptional one off items,
grew by 11.5%. These one-off items relate mainly to the start-up costs in
new international company owned restaurants of R3.5 million and costs
associated with the centralisation of the manufacturing facilities of
R1.1 million.
Headline earnings for the period increased by 7.4% to R48.7 million, with
diluted headline earnings per share growing by 9.5% to 55.28 cents. The
directors have declared an interim dividend of 33.0 cents per share.
RESTAURANT EXPANSION
The group increased its restaurant base to 367 outlets. The expansion of the
Spur chain locally included the opening of the smaller format restaurants in
Wellington, Meyerton and Bredasdorp.
Internationally a new group-owned Spur restaurant was opened in Gateshead
(England) and a new franchised Spur restaurant in Ezulwini (Swaziland). The
Spur in Belfast (Northern Ireland) was converted from a franchised to a group
owned outlet and the group also purchased the remaining 50% shareholding of
the Spur in Penrith (Australia). The Panarottis outlet in Mingara (Australia),
in which the group had a minority interest, was relocated to a better trading
site in Tuggerah, which has positively impacted turnover, and the group now
has a majority interest in the outlet.
A summary of the group`s restaurant profile at 31 December 2010 is as follows:
Franchise brand South Africa International Total
Spur Steak Ranches 250 33 283
Panarottis Pizza Pasta 50 6 56
John Dory`s Fish & Grill 28 - 28
Total 328 39 367
PROSPECTS
Although consumer optimism has improved as a result of the low interest rate
environment and historically lower levels of inflation, heavy debt burdens,
increasing fuel, utility and food prices and anticipated higher inflation
remain a challenge. In this environment, sales growth will be driven by
continued value-added and innovative promotions. These include a breakfast
offering in Spur, week-day value specials in Panarottis and family weekend
specials in John Dory`s.
A Spur restaurant will be opened in Lilongwe (Malawi) and other African sites
are being evaluated. No new restaurants are planned for the United Kingdom or
Australia in the remainder of the financial year. Locally, the group will
continue its restaurant expansion and refurbishment programme.
INTERIM CASH DIVIDEND FOR THE SIX MONTHS TO 31 DECEMBER 2010
In accordance with a general authority given to the directors at the annual
general meeting held on 10 December 2010, shareholders are advised that the
board of directors of the company has approved a cash dividend of R32.2
million, which equates to 33.0 cents per share.
The cash dividend will be paid on Monday, 28 March 2011, to those
shareholders of the company who are recorded in the company`s register on
Friday, 25 March 2011 ("the record date").
The last day to trade (cum dividend) in the company`s shares for purposes of
entitlement to the dividend will be Thursday, 17 March 2011. The shares will
commence trading ex dividend on Friday, 18 March 2011.
Share certificates may not be dematerialised or rematerialised between Friday,
18 March 2011 and Friday, 25 March 2011, both days inclusive.
For and on behalf of the Board
A Ambor (Executive Chairman) Cape Town
P van Tonder (Managing Director) 1 March 2011
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited six Unaudited six
months ended months ended
R`000 31/12/10 31/12/09
Revenue 203 302 179 450
Operating profit before finance income 70 654 65 854
Net finance income 2 287 2 658
Profit before income tax 72 941 68 512
Income tax expense (24 473) (22 693)
Profit for the period 48 468 45 819
Other comprehensive losses: (6 226) (6 130)
Foreign currency translation differences
for foreign operations (7 472) (6 737)
Foreign exchange gain on net investments
in foreign subsidiaries 1 672 814
Tax on foreign exchange gain on net
investments in foreign subsidiaries (426) (207)
Total comprehensive income for the period 42 242 39 689
Profits/(losses) attributable to:
Owners of the company 48 748 45 381
Non-controlling interest (280) 438
Profit for the period 48 468 45 819
Total comprehensive income/(losses)attributable to:
Owners of the company 42 501 39 344
Non-controlling interest (259) 345
Total comprehensive income for the period 42 242 39 689
Per share (cents)
Basic earnings 55.48 51.65
Diluted earnings 55.29 50.46
Dividends 33.00 32.00
Audited
% year ended
R`000 change 30/06/10
Revenue 13.3 348 024
Operating profit before finance income 7.3 118 549
Net finance income 4 380
Profit before income tax 6.5 122 929
Income tax expense (44 562)
Profit for the period 5.8 78 367
Other comprehensive losses: (14 093)
Foreign currency translation differences for foreign
operations (21 719)
Foreign exchange gain on net investments in foreign
subsidiaries 10 236
Tax on foreign exchange gain on net investments in
foreign subsidiaries (2 610)
Total comprehensive income for the period 64 274
Profit/(losses) attributable to:
Owners of the company 77 557
Non-controlling interest 810
Profit for the period 78 367
Total comprehensive income/(losses) attributable to:
Owners of the company 63 540
Non-controlling interest 734
Total comprehensive income for the period 64 274
Per share (cents)
Basic earnings 7.4 88.27
Diluted earnings 9.6 86.25
Dividends 3.1 60.00
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited at Unaudited at Audited at
R`000 31/12/10 31/12/09 30/06/10
ASSETS
Non-current assets 378 118 402 119 382 609
Property, plant and equipment 73 559 87 689 75 184
Intangible assets and goodwill 285 769 279 714 279 609
Investments and loans 6 238 15 075 14 533
Deferred tax 10 586 17 299 11 128
Leasing rights 1 804 2 342 2 155
Other financial asset 162 - -
Current assets 181 873 150 943 148 116
Inventories 4 915 5 262 6 389
Tax receivable 3 640 4 120 3 600
Trade and other receivables 68 273 65 577 53 499
Asset classified as held
for sale 15 012 - -
Cash and cash equivalents 90 033 75 984 84 628
TOTAL ASSETS 559 991 553 062 530 725
EQUITY
Total equity 420 606 407 177 403 295
Ordinary share capital 1 1 1
Share premium 6 6 6
Shares repurchased by
subsidiaries (29 910) (29 910) (29 910)
Foreign currency translation
reserve (11 376) 2 851 (5 129)
Retained earnings 458 161 429 956 434 015
Total equity attributable to
equity holders of the parent 416 882 402 904 398 983
Non-controlling interest 3 724 4 273 4 312
LIABILITIES
Non-current liabilities 67 541 63 583 64 569
Long-term loans payable 4 754 9 289 7 181
Employee benefits 91 - -
Operating lease liability 5 077 3 271 3 328
Deferred tax 57 619 51 023 54 060
CURRENT LIABILITIES 71 844 82 302 62 861
Bank overdraft 3 997 5 067 3 596
Tax payable 7 291 20 185 4 832
Trade and other payables 60 075 55 302 53 969
Shareholders for dividend 481 1 748 464
TOTAL EQUITY AND LIABILITIES 559 991 553 062 530 725
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited six Unaudited six Audited
months ended months ended year ended
R`000 31/12/10 31/12/09 30/06/10
Operating profit before
working capital changes 74 416 71 780 134 474
Working capital changes (11 606) (2 229) 3 394
Cash generated from operations 62 810 69 551 137 868
Net interest received 2 287 2 658 4 948
Tax paid (19 292) (18 094) (49 528)
Distributions paid (24 935) (47 970) (80 708)
Net cash flow from operating
activities 20 870 6 145 12 580
Cash flow from investing
activities (17 939) (16 193) (13 574)
Cash flow from financing
activities 2 010 (60) 771
Net movement in cash and cash
equivalents 4 941 (10 108) (223)
Effect of foreign exchange
fluctuations 63 (9) 221
Net cash and cash equivalents
at beginning of period 81 032 81 034 81 034
Net cash and cash equivalents
at end of period 86 036 70 917 81 032
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Ordinary share capital
& share premium (net Other
R`000 of treasury shares) reserves
Balance at 1 July 2009 (25 342) 29 442
Total comprehensive (losses)/ income for the year - (14 017)
Profit for the year - -
Other comprehensive losses - (14 017)
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) (4 561) -
Share-based payments transactions net
of tax - 1 211
Transfer of share-based payment reserve
to retained earnings - (21 765)
Balance at 30 June 2010 (29 903) (5 129)
Total comprehensive (losses)/income for
the period - (6 247)
Profit for the period - -
Other comprehensive (losses)/income - (6 247)
Transactions with owners, recorded
directly in equity
Contributions by and distributions to
owners - -
Distributions to equity holders - -
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 - -
Balance at 31 December 2010 (29 903) (11 376)
Retained earnings
and non-controlling
R`000 interest Total
Balance at 1 July 2009 430 220 434 320
Total comprehensive (losses)/income for the year 78 291 64 274
Profit for the year 78 367 78 367
Other comprehensive losses (76) (14 093)
Transactions with owners, recorded directly
in equity
Contributions by and distributions to
owners (70 184) (95 299)
Distributions to equity holders (53 442) (53 442)
Impact of incentive scheme (including tax) (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 30 June 2010 438 327 403 295
Total comprehensive (losses)/income
for the period 48 489 42 242
Profit for the period 48 468 48 468
Other comprehensive (losses)/income 21 (6 226)
Transactions with owners, recorded directly
in equity
Contributions by and distributions to
owners (24 952) (24 952)
Distributions to equity holders (24 952) (24 952)
Changes in ownership interests in
subsidiaries that do not result in a
loss of control 21 21
Acquisition of minority interest in
subsidiary 21 21
Total transactions with owners (24 931) (24 931)
Balance at 31 December 2010 461 885 420 606
CONDENSED CONSOLIDATED OPERATING SEGMENT REPORT
Unaudited six Unaudited six Audited
months ended months ended year ended
R`000 31/12/10 31/12/09 30/06/10
Revenue
Manufacturing and Distribution 54 889 47 999 94 008
Franchise - Spur 70 239 63 094 124 411
Franchise - Panarottis 5 959 5 578 10 751
Franchise - John Dory`s 4 984 4 497 8 847
Other South Africa 9 709 8 806 17 554
Total South African segments 145 780 129 974 255 571
United Kingdom 33 510 30 086 56 080
Australia 20 234 16 291 30 013
Other International 3 778 3 099 6 360
Total International segments 57 522 49 476 92 453
TOTAL REVENUE 203 302 179 450 348 024
Profit/(loss) before income tax
Manufacturing and Distribution 24 018 22 225 44 714
Franchise - Spur 60 941 54 786 107 339
Franchise - Panarottis 3 728 3 507 6 560
Franchise - John Dory`s 2 309 2 277 4 567
Other South Africa 168 (77) (691)
Total South African segments 91 164 82 718 162 489
Unallocated - South Africa (15 456) (15 150) (28 220)
Total South Africa 75 708 67 568 134 269
United Kingdom (4 066) (257) (12 396)
Australia (600) 522 (1 807)
Other International 3 120 2 653 5 287
Total International segments (1 546) 2 918 (8 916)
Unallocated - International (1 221) (1 974) (2 424)
Total International (2 767) 944 (11 340)
TOTAL PROFIT BEFORE INCOME TAX 72 941 68 512 122 929
Segmental information for the period to 31 December 2009 has been restated to
accord with the segment classifications presented for the year to 30 June 2010
as per the annual report for that period.
RECONCILIATION OF HEADLINE EARNINGS
Unaudited six Unaudited six
months ended months ended
R`000 31/12/10 31/12/09
Profit attributable to owners of the company 48 748 45 381
Headline earnings adjustments:
Impairment of property, plant and equipment - -
Profit on disposal of property, plant and
equipment (9) (12)
Headline earnings 48 739 45 369
Audited
% year ended
R`000 change 30/06/10
Profit attributable to owners of the company 7.4 77 557
Headline earnings adjustments:
Impairment of property, plant and equipment 7 994
Profit on disposal of property, plant and
equipment (484)
Headline earnings 7.4 85 067
SUPPLEMENTARY INFORMATION
Unaudited six Unaudited six
months ended months ended
31/12/10 31/12/09
Shares in issue (000`s) (note 2) 87 865 87 865
Weighted average number of shares
in issue (000`s) 87 865 87 865
Diluted weighted average number of
shares in issue (000`s) 88 166 89 929
Headline earnings per share (cents) 55.47 51.65
Diluted headline earnings per share (cents) 55.28 50.46
Net asset value per share (cents) 478.70 463.41
Audited
% year ended
Change 30/06/10
Shares in issue (000`s) (note 2) 87 865
Weighted average number of shares in issue (000`s) 87 865
Diluted weighted average number of shares in
issue (000`s) 89 929
Headline earnings per share (cents) 7.4 96.82
Diluted headline earnings per share (cents) 9.5 94.60
Net asset value per share (cents) 3.3 458.99
NOTES
1. The group`s condensed consolidated interim 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 are consistent with
those applied in the preparation of the group`s annual financial statements
for the year ended 30 June 2010.
2. 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),
M Morojele*, K Robertson, R van Dijk. (*non-executive)
Company secretary: R van Dijk
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.spurcorporation.co.za
03 March 2011
Date: 03/03/2011 12:00:01 Produced by the JSE SENS Department.
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