SUR
SUR
SUR - Spur Corporation Limited - Unaudited condensed consolidated results and
cash dividend declaration for the six months ended 31 December 2011
Spur Corporation Limited
(Registration number 1998/000828/06)
Share code: SUR
ISIN: ZAE000022653
("Spur" or "the company")
UNAUDITED CONDENSED CONSOLIDATED RESULTS AND CASH DIVIDEND DECLARATION for the
six months ended 31 December 2011
Revenue UP 16.2%
Headline earnings UP 19.4%
Dividend per share UP 21.2%
PREPARED UNDER THE SUPERVISION OF THE GROUP FINANCIAL DIRECTOR, RONEL VAN DIJK
CA(SA)
TRADING PERFORMANCE
Spur Corporation increased revenue by 16.2% to R236.2 million in the six month
period, driven mainly by strong Christmas trading, enhanced customer loyalty and
value-added promotional campaigns across its three franchised brands.
Spur Steak Ranches increased restaurant turnover by 13.3%. Factors contributing
to the performance include the Spur Family Card loyalty programme which has seen
membership more than double in the past six months to 720 000 card holders. In
addition, the brand continues to gain share of the highly competitive breakfast
market with the Spur Unreal Breakfast campaign. Launched less than a year ago,
the campaign has bolstered breakfast trade to 8% of total sales in Spur.
Strategically, Spur has reinforced its presence in the teenage and young adult
market through the sponsorship of the Varsity Cup rugby competition, the two for
one Monday night burger promotion and usage of contemporary social media such as
Facebook and Twitter.
Panarottis Pizza Pasta lifted restaurant turnover by 13.2% benefitting from an
increased focus on the brand`s family offering and weekday value propositions.
John Dory`s Fish & Grill increased restaurant turnover by 15.1% which is
attributed to improved operational standards, a more appealing sushi offering
and customer-focused promotions.
Inflationary pressures such as rising food prices and increased electricity and
water costs are realities facing both the consumer and the restaurant
industry. Through a combination of strategic food promotions and prudent menu
increases, management has been able to increase both spend per head and foot
count.
The group expanded its restaurant base to 371. In South Africa the group opened
eight new Spur outlets, one new Panarottis and one John Dory`s outlet. A further
18 outlets were refurbished and three relocated to better quality trading sites.
While trading conditions have remained challenging in the international markets
in which the group operates, turnover growth has shown an encouraging
improvement. Internationally two Spur and two Panarottis restaurants were opened
in Mauritius, bringing the group`s presence on the island to six outlets. A new
Spur restaurant was opened in Lilongwe, Malawi. All these restaurants are
franchised.
The restaurant footprint at 31 December 2011 is as follows:
Franchise brand South Africa International Total
Spur Steak Ranches 252 33 285
Panarottis Pizza Pasta 52 7 59
John Dory`s Fish & Grill 27 - 27
Total 331 40 371
FINANCIAL PERFORMANCE
Franchise revenue in Spur increased by 12.4% to R78.9 million, Panarottis by
6.9% to R6.4 million and John Dory`s by 10.2% to R5.5 million. Corporate
services and other income grew by 29.8% to R12.6 million.
International revenue, comprising franchise revenue and restaurant turnover,
increased by 25.1% to R71.9 million, benefitting from the opening of five new
restaurants during the period.
Manufacturing and distribution revenue rose by 10.9% to R60.9 million. The group
continues to focus on creating efficiencies following the consolidation of the
manufacturing operations into one facility in Cape Town last year.
Profit before income tax for the six months increased by 21.3% to R88.4 million.
The international segment has contributed positively to operating profit.
The group increased headline earnings by 19.4% to R58.2 million, with diluted
headline earnings per share growing by 20.2% to 66.5 cents per share. This
performance is in line with the earnings guidance provided in the group`s
trading statement issued on SENS on 15 February 2012.
An interim cash dividend of 40.0 cents per share has been declared, 21.2% higher
than the previous year.
PROSPECTS
Shortly before the end of the reporting period the group announced the
acquisition of the DoRego`s fast food restaurant franchise and distribution
centre, with effect from 1 March 2012. DoRego`s is a value take-away chain
offering chicken, seafood and burgers through 75 franchised outlets. DoRego`s
will give the group exposure to the fast growing lower to middle income segment
of the quick service restaurant market.
Management expects a seamless integration of DoRego`s and plans to capitalise on
the regional brand awareness to expand the current footprint nationally.
Following the acquisition of the remaining 35% shareholding in John Dory`s in
January 2012, the brand is now wholly-owned and well poised for growth under the
new management team.
Six Spur, three Panarottis and five John Dory`s restaurants are planned to be
opened during the second half, with 38 restaurants due to be refurbished across
the three brands.
International expansion will focus on Africa, with franchised Spur restaurants
planned for Nigeria (Lagos), Zambia (Lusaka), Kenya (Nairobi) and Botswana
(Gaborone), while the first franchised Panarottis outlet will be opened in
Gaborone.
CASH DIVIDEND
In accordance with a general authority given to the directors at the annual
general meeting held on 2 December 2011, shareholders are advised that the board
of directors of the company has declared an interim cash dividend for the six
month period to 31 December 2011 of R39.1 million, which equates to 40.0 cents
per share.
The cash dividend will be paid on Monday, 26 March 2012, to those shareholders
of the company who are recorded in the company`s register on Friday, 23 March
2012 ("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, 15 March 2012. The shares will
commence trading ex dividend on Friday, 16 March 2012.
Share certificates may not be dematerialised or rematerialised between Friday,
16 March 2012 and Friday, 23 March 2012, both days inclusive.
For and on behalf of the Board
A Ambor (Executive Chairman) Cape Town
P van Tonder (Managing Director) 29 February 2012
ABRIDGED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited six Unaudited six Audited
months ended months ended % year ended
R`000 31/12/11 31/12/10 change 30/06/11
Revenue 236 206 203 302 16.2 403 396
Operating profit
before finance income 85 130 70 654 20.5 111 969
Net finance income 3 319 2 287 4 861
Profit before income tax 88 449 72 941 21.3 116 830
Income tax expense (29 846) (24 473) (48 742)
Profit for the period 58 603 48 468 20.9 68 088
Other comprehensive
income/(losses): 4 355 (6 226) 860
Foreign currency
translation differences
for foreign operations (467) (7 472) 2 406
Foreign exchange
gain/(loss) on net
investments in
foreign operations 6 472 1 672 (2 075)
Tax on foreign
exchange (gain)/loss
on net investments in
foreign operations (1 650) (426) 529
Total comprehensive
income for the period 62 958 42 242 68 948
Profit/(losses)
attributable to:
Owners of the company 58 199 48 748 19.4 70 789
Non-controlling interest 404 (280) (2 701)
Profit for the period 58 603 48 468 20.9 68 088
Total comprehensive
income/(losses)
attributable to:
Owners of the company 63 077 42 501 71 648
Non-controlling interest (119) (259) (2 700)
Total comprehensive
income for the period 62 958 42 242 68 948
Earnings per share (cents)
Basic earnings 66.73 55.48 20.3 80.65
Diluted earnings 66.49 55.29 20.3 80.37
RECONCILIATION OF
HEADLINE EARNINGS
Profit attributable
to ordinary shareholders 58 199 48 748 19.4 70 789
Headline earnings
adjustments:
Impairment of property,
plant and equipment - - 11 169
Impairment of goodwill - - 4 948
Profit on disposal
of property, plant
and equipment (net of tax) (21) (9) (1 147)
Headline earnings 58 178 48 739 19.4 85 759
ABRIDGED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
R`000 at 31/12/11 at 31/12/10 at 30/06/11
ASSETS
Non-current assets 373 187 378 118 371 486
Property, plant and equipment 72 286 73 559 70 387
Intangible assets and goodwill 282 765 285 769 281 477
Investments and loans 5 881 6 238 5 857
Deferred tax 10 336 10 586 11 967
Leasing rights 1 919 1 804 1 798
Other financial asset - 162 -
Current assets 226 997 181 873 184 477
Inventories 9 933 4 915 5 621
Tax receivable 5 201 3 640 4 410
Trade and other receivables 79 742 68 273 58 480
Assets classified as held for sale - 15 012 -
Cash and cash equivalents 132 121 90 033 115 966
TOTAL ASSETS 600 184 559 991 555 963
EQUITY
Total equity 442 414 420 606 408 236
Ordinary share capital 1 1 1
Share premium 6 6 6
Shares repurchased by subsidiaries (38 941) (29 910) (38 941)
Foreign currency translation reserve 608 (11 376) (4 270)
Retained earnings 479 926 458 161 450 507
Total equity attributable to
equity holders of the parent 441 600 416 882 407 303
Non-controlling interest 814 3 724 933
LIABILITIES
Non-current liabilities 71 991 67 541 73 090
Long-term loans payable 503 4 754 2 923
Employee benefits 1 766 91 555
Other financial liability 350 - 2 627
Operating lease liability 7 699 5 077 6 531
Deferred tax 61 673 57 619 60 454
Current liabilities 85 779 71 844 74 637
Bank overdrafts 7 093 3 997 2 256
Tax payable 7 143 7 291 6 622
Trade and other payables 46 683 42 106 46 874
Loans payable 24 108 17 969 18 273
Shareholders for dividend 752 481 612
TOTAL EQUITY AND LIABILITIES 600 184 559 991 555 963
ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited six Unaudited six Audited
months ended months ended year ended
R`000 31/12/11 31/12/10 30/06/11
Operating profit before working
capital changes 89 363 74 416 144 655
Working capital changes (20 192) (11 606) 2 631
Cash generated from operations 69 171 62 810 147 286
Net interest received 3 319 2 287 4 861
Tax paid (28 172) (19 292) (41 149)
Distributions paid (28 640) (24 935) (54 785)
Net cash flow from operating
activities 15 678 20 870 56 213
Cash flow from investing activities (1 738) (17 939) (23 567)
Cash flow from financing activities (2 709) 2 010 48
Net movement in cash and cash
equivalents 11 231 4 941 32 694
Effect of foreign exchange
fluctuations 87 63 (16)
Net cash and cash equivalents
at beginning of period 113 710 81 032 81 032
Net cash and cash equivalents
at end of period 125 028 86 036 113 710
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Ordinary share
capital & premium Other
R`000 (net of treasury shares) reserves
Balance at 1 July 2010 (29 903) (5 129)
Total comprehensive income for the year - 859
Profit for the year - -
Other comprehensive income - 859
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners (9 031) -
Distributions to equity holders - -
Impact of incentive scheme (including tax) - -
Purchase of own shares (9 031) -
Changes in ownership interests in subsidiaries that
do not result in a loss of control - -
Acquisition of minority interests in subsidiary - -
Total transactions with owners (9 031) -
Balance at 30 June 2011 (38 934) (4 270)
Total comprehensive income for the period - 4 878
Profit for the period - -
Other comprehensive income - 4 878
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners - -
Distributions to equity holders - -
Balance at 31 December 2011 (38 934) 608
Retained earnings
and non-controlling
R`000 interest Total
Balance at 1 July 2010 438 327 403 295
Total comprehensive income for the year 68 089 68 948
Profit for the year 68 088 68 088
Other comprehensive income 1 860
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners (54 997) (64 028)
Distributions to equity holders (54 298) (54 298)
Impact of incentive scheme (including tax) (699) (699)
Purchase of own shares - (9 031)
Changes in ownership interests in subsidiaries that
do not result in a loss of control 21 21
Acquisition of minority interests in subsidiary 21 21
Total transactions with owners (54 976) (64 007)
Balance at 30 June 2011 451 440 408 236
Total comprehensive income for the period 58 080 62 958
Profit for the period 58 603 58 603
Other comprehensive income (523) 4 355
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners (28 780) (28 780)
Distributions to equity holders (28 780) (28 780)
Balance at 31 December 2011 480 740 442 414
ABRIDGED CONSOLIDATED OPERATING SEGMENT REPORT
Unaudited six Unaudited six Audited
months ended months ended year ended
R`000 31/12/11 31/12/10 30/06/11
External Revenues
Manufacturing and distribution 60 886 54 889 109 043
Franchise - Spur 78 916 70 239 137 004
Franchise - Panarottis 6 370 5 959 11 526
Franchise - John Dory`s 5 490 4 984 9 782
Other South Africa 12 538 9 709 19 710
Total South African segments 164 200 145 780 287 065
Unallocated - South Africa 60 - 39
Total South Africa 164 260 145 780 287 104
United Kingdom 40 608 33 510 65 936
Australia 27 057 20 234 43 464
Other International 4 281 3 778 6 892
Total International segments 71 946 57 522 116 292
TOTAL EXTERNAL REVENUES 236 206 203 302 403 396
Profit/(loss) before income tax
Manufacturing and distribution 28 419 24 018 49 633
Franchise - Spur 69 927 60 941 118 712
Franchise - Panarottis 3 778 3 728 6 837
Franchise - John Dory`s 2 832 2 309 4 543
Other South Africa 401 168 (896)
Total South African segments 105 357 91 164 178 829
Unallocated - South Africa (20 607) (15 456) (34 022)
Total South Africa 84 750 75 708 144 807
United Kingdom 43 (4 066) (27 688)
Australia 1 060 (600) (1 279)
Other International 3 036 3 120 5 226
Total International segments 4 139 (1 546) (23 741)
Unallocated - International (440) (1 221) (4 236)
Total International 3 699 (2 767) (27 977)
TOTAL PROFIT BEFORE INCOME TAX 88 449 72 941 116 830
SUPPLEMENTARY INFORMATION
Unaudited six Unaudited six Audited
months ended months ended % year ended
R`000 31/12/11 31/12/10 change 30/06/11
Shares in issue (000`s)
(note 2) 87 214 87 865 87 214
Weighted average number
of shares in issue (000`s) 87 214 87 865 87 777
Diluted weighted average
number of shares in issue
(000`s) 87 529 88 166 88 084
Headline earnings
per share (cents) 66.71 55.47 20.3 97.70
Diluted headline
earnings per share (cents) 66.47 55.28 20.2 97.36
Net asset value per
share (cents) 507.27 478.70 6.0 468.09
Dividend per share (cents) 40.0 33.0 21.2 66.0
NOTES
1. The unaudited interim condensed consolidated results for the six months
ended 31 December 2011 have been prepared in accordance with the
presentation and disclosure requirements of the South African Companies Act
(No. 71 of 2008, as amended), and IAS 34 - Interim Financial Reporting,
using the group`s accounting policies, that are in line with the
measurement and recognition principles of International Financial Reporting
Standards (IFRS) and the AC 500 Standards as issued by the Accounting
Practices Board or its successor and have been consistently applied to
prior periods.
2. Shares in issue less shares repurchased by a wholly owned subsidiary
company and share incentive special purpose entity.
3. Subsequent to the reporting date and with effect from 1 March 2012, the
group purchased the DoRego`s fast food restaurant franchise business and
distribution centre as a going concern. The purchase consideration
comprises a cash payment of R25 million on the effective date, a further
amount of up to R5 million on 1 March 2013 depending on agreed financial
performance measures and the value of distribution centre inventory
determined at the effective date, payable on 31 March 2012.
Subsequent to the reporting date and with effect from 25 January 2012, the group
purchased the 35% shareholding in John Dory`s Franchise (Pty) Ltd held by a
minority shareholder (as at the reporting date) for R12.25 million cash.
Directors
Executive Chairman
A Ambor
Managing Director
P van Tonder
Executive
M Farrelly, P Joffe, K Robertson, R van Dijk
Non-executive
K Getz, D Hyde, M Kuzwayo, K Madders MBE (British), M Morojele
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
01 March 2012
Sponsor
Sasfin Capital (A division of Sasfin Bank Ltd)
Our Brand Family
www.spurcorporation.co.za
Date: 01/03/2012 12:00:01 Produced by the JSE SENS Department.
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