SUR - Spur Corporation Limited - Unaudited condensed consolidated interim
3 March 2011 12:00
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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