SPUR CORPORATION LIMITED - Unaudited Condensed Consolidated Interim Results and Cash Dividend Declaration
07 March 2013 12:00
SUR 201303070039A
Unaudited Condensed Consolidated Interim Results and Cash Dividend Declaration
Spur Corporation Limited (Registration number 1998/000828/06)
Share code: SUR ISIN: ZAE000022653
UNAUDITED CONDENSED CONSOLIDATED RESULTS AND CASH DIVIDEND DECLARATION
for the six months ended 31 December 2012
* Revenue up 40.4%
* Diluted HEPS up 35.3%
* Dividend per share up 37.5%
PREPARED UNDER THE SUPERVISION OF THE CHIEF FINANCIAL OFFICER, RONEL VAN DIJK CA(SA)
TRADING PERFORMANCE
Spur Corporation increased revenue by 40.4% to R331.6 million in the six months ended December 2012. An aggressive
promotions strategy, increasing customer loyalty and robust Christmas trading resulted in the group growing its market
share in the highly competitive family sit-down restaurant market. Revenue growth also benefited from the inclusion of the
DoRego's takeaway chain acquired with effect from 1 March 2012.
Total restaurant sales across the group increased by 17.5% for the six month period, with sales in South Africa growing
by 16.5%.
Sales in Spur Steak Ranch outlets increased by 16.5%, with turnover from existing restaurants up 13.7%. Growth was driven
by the continued success of Spur's breakfast and weekday promotions, and increased demand for the brand's quality, good
value offering. The Spur Family Card continues to foster loyalty in the brand and membership increased to over 1.4 million,
accounting for 29% of Spur's turnover in the period.
Panarottis Pizza Pasta lifted restaurant sales by 30.6% as the brand benefited from ongoing weekday promotions, new
and refurbished outlets and the introduction of a new menu. Management has continued to focus on quality and service
standards. Turnover from existing outlets increased by 19.7%.
Sales in John Dory's Fish Grill Sushi restaurants grew by 11.9% and by 9.7% in existing outlets.
The integration of the DoRego's franchise takeaway chain continues to gain momentum. Nine new outlets have been opened
and management aims to attract franchisees to expand the chain beyond its current presence in Gauteng, Free State and
Eastern Cape. The DoRego's brand image has been enhanced, new menus developed and support provided to franchisees
to ensure consistent standards and controls. No comparative sales performance is reported for DoRego's as the business
was only acquired in March 2012.
Sales in the international operations were 26.4% higher in Rand terms. Spur bucked the trend in the depressed UK
restaurant economy and posted a pleasing growth in turnover. Africa continues to deliver stable growth while trading
conditions have remained static in Australia.
International expansion has continued to focus on Africa and the group has strengthened its management team to support
growth on the continent. A second Spur restaurant was opened in Kenya and a Panarottis Express outlet opened in Mauritius.
The group has a growing presence in Mauritius with nine restaurants. The Spur outlet in Staines in England was converted
to a company-owned restaurant in October 2012.
Twenty three new stores were opened across the four brands in South Africa during the period.
The restaurant footprint at 31 December 2012 is as follows:
Franchise brand South Africa International Total
Spur Steak Ranches 259 36 295
Panarottis Pizza Pasta 58 12 70
John Dory's Fish Grill Sushi 28 - 28
DoRego's 77 1 78
Total 422 49 471
FINANCIAL PERFORMANCE
Franchise revenue in Spur increased by 16.7% to R92.1 million, Panarottis by 31.6% to R8.3 million and John Dory's by 6.5% to
R5.8 million. Franchise revenue in DoRego's totalled R4.9 million.
Manufacturing and distribution revenue rose by 85.7% to R113.1 million, lifted by the first-time inclusion of the revenue from the
DoRego's distribution centre which totalled R39.2 million, and higher product volumes in the group's sauce manufacturing facility and
outsourced distribution network owing to higher local restaurant sales.
International revenue, comprising franchise revenue and company-owned restaurant turnover, reflects the improving trading
performance in Africa and the United Kingdom, and increased by 26.7% to R91.1 million.
Profit before income tax for the six month period increased by 25.8% to R111.3 million. This includes a gain of R6.4 million
(2011: R1.1 million) which is the net impact of a charge of R8.6 million (2011: R1.2 million) in respect of the group's incentive
scheme and a credit of R15.0 million (2011: R2.3 million) in respect of the related hedging instrument.
Comparable profit before income tax, excluding the incentive scheme credit, the contribution of the DoRego's business, as well as
foreign exchange gains/losses and other one-off items in the current and comparable periods, grew by 17.2%.
The tax rate for the period has reduced to 30.3% (2011: 33.7%) following the termination of Secondary Tax on Companies.
The group increased headline earnings by 33.1% to R77.4 million, with diluted headline earnings per share growing by 35.3% to
89.9 cents per share. This performance is in line with the earnings guidance provided in the group's trading statement issued on
SENS on 19 February 2013.
An interim cash dividend of 55.0 cents per share has been declared, an increase of 37.5% on the previous period.
PROSPECTS
The group is actively pursuing new marketing promotions across its brand portfolio to maintain the current sales momentum and to
grow market share. The Spur Family Card will be used to drive loyalty by increasing average spend per customer and the frequency
of visits and to attract additional foot traffic.
The group plans to open eleven new Spur restaurants as well as one Panarottis and two DoRego's outlets in South Africa in the next six
months. Expansion in the international operations will include second Spur restaurants in Tanzania, Nigeria and Swaziland, as well
as a DoRego's outlet in Namibia.
CASH DIVIDEND
Shareholders are advised that the board of directors of the company has, on Wednesday, 6 March 2013, resolved to declare an
interim gross cash dividend for the six month period to 31 December 2012 of R53.7 million, which equates to 55.0 cents per
share for each of the 97 632 833 shares in issue, subject to the applicable tax levied in terms of the Income Tax Act (Act No. 58
of 1962 amended) ("dividend tax").
The dividend has been declared from income reserves. The company has available Secondary Tax on Companies ("STC") credits in
the amount of R1 484 019 which equates to 1.52 cents per share. Consequently, of the dividend declared, 1.52 cents per share
will not be subject to dividend tax and 53.48 cents per share may be subject to dividend tax at a rate of 15%. The net dividend,
after applying the STC credits, is 46.978 cents per share for shareholders liable to pay dividend tax. The company 's income tax
reference number is 9695015033.
In accordance with the provisions of Strate, the electronic settlement and custody system used by the JSE Limited, the relevant
dates for the dividend are as follows:
Event Date
Last day to trade (cum dividend) Wednesday, 27 March 2013
Shares commence trading (ex dividend) Thursday, 28 March 2013
Record date Friday, 5 April 2013
Payment date Monday, 8 April 2013
Those shareholders of the company who are recorded in the company 's register as at the record date will be entitled to the dividend.
Share certificates may not be dematerialised or rematerialised between Thursday, 28 March 2013 and Friday, 5 April 2013, both
days inclusive.
For and on behalf of the Board
A Ambor (Executive Chairman) Cape Town
P van Tonder (Chief Executive Officer) 6 March 2013
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited six Unaudited six Audited
months ended months ended % year ended
R'000 31 Dec 2012 31 Dec 2011 change 30 June 2012
Revenue 331 636 236 206 40.4 503 444
Operating profit before finance income 108 521 85 130 27.5 168 936
Net finance income 2 782 3 319 6 164
Profit before income tax 111 303 88 449 25.8 175 100
Income tax expense (33 770) (29 846) (60 718)
Profit for the period 77 533 58 603 32.3 114 382
Other comprehensive income/(losses): 4 627 4 355 3 679
Foreign currency translation differences for foreign operations 6 358 (467) (3 603)
Foreign exchange (loss)/gain on net investments in foreign operations (2 308) 6 472 9 774
Tax on foreign exchange (loss)/gain on net investments
in foreign operations 577 (1 650) (2 492)
Total comprehensive income for the period 82 160 62 958 30.5 118 061
Profit attributable to:
Owners of the company 77 438 58 199 33.1 113 884
Non-controlling interest 95 404 498
Profit for the period 77 533 58 603 32.3 114 382
Total comprehensive income attributable to:
Owners of the company 82 330 63 077 30.5 118 208
Non-controlling interest (170) (119) (147)
Total comprehensive income for the period 82 160 62 958 30.5 118 061
Per share (cents)
Basic earnings 89.93 66.73 34.8 130.71
Diluted earnings 89.93 66.49 35.2 130.34
RECONCILIATION OF HEADLINE EARNINGS
Profit attributable to ordinary shareholders 77 438 58 199 33.1 113 884
Headline earnings adjustments:
Impairment of goodwill - - 1 564
Bargain purchase gain - - (3 694)
(Profit)/loss on disposal of property,
plant and equipment (net of tax) (17) (21) 41
Headline earnings 77 421 58 178 33.1 111 795
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited at Unaudited at Audited at
R'000 31 Dec 2012 31 Dec 2011 30 June 2012
ASSETS
Non-current assets 433 063 373 187 417 552
Property, plant and equipment 74 273 72 286 73 492
Intangible assets and goodwill 321 346 282 765 320 986
Investments and loans 8 804 5 881 8 818
Deferred tax 7 580 10 336 7 776
Leasing rights 1 774 1 919 1 826
Derivative financial assets 19 286 - 4 654
Current assets 234 662 226 997 186 462
Inventories 10 237 9 933 10 304
Tax receivable 6 479 5 201 5 488
Trade and other receivables 92 671 79 742 71 866
Cash and cash equivalents 125 275 132 121 98 804
TOTAL ASSETS 667 725 600 184 604 014
EQUITY
Total equity 461 807 442 414 425 606
Ordinary share capital 1 1 1
Share premium 6 6 6
Shares repurchased by subsidiaries (65 929) (38 941) (60 510)
Foreign currency translation reserve 4 946 608 54
Retained earnings 527 713 479 926 490 815
Total equity attributable to equity holders of the parent 466 737 441 600 430 366
Non-controlling interest (4 930) 814 (4 760)
LIABILITIES
Non-current liabilities 90 355 71 991 80 578
Long-term loans payable 429 503 446
Employee benefits 13 110 1 766 4 520
Derivative financial liability - 350 -
Operating lease liability 6 051 7 699 6 564
Deferred tax 70 765 61 673 69 048
Current liabilities 115 563 85 779 97 830
Bank overdrafts 1 839 7 093 1 854
Tax payable 7 716 7 143 6 052
Trade and other payables 105 604 70 791 89 004
Shareholders for dividend 404 752 920
TOTAL EQUITY AND LIABILITIES 667 725 600 184 604 014
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited six Unaudited six Audited
months ended months ended year ended
R'000 31 Dec 2012 31 Dec 2011 30 June 2012
Operating profit before working capital changes 110 625 89 363 171 060
Working capital changes (1 945) (20 192) 6 378
Cash generated from operations 108 680 69 171 177 438
Net interest received 2 782 3 319 6 164
Tax paid (29 730) (28 172) (58 578)
Distributions paid (41 056) (28 640) (65 108)
Net cash flow from operating activities 40 676 15 678 59 916
Cash flow from investing activities (11 601) (1 738) (72 122)
Cash flow from financing activities (2 438) (2 709) (4 652)
Net movement in cash and cash equivalents 26 637 11 231 (16 858)
Effect of foreign exchange fluctuations (151) 87 98
Net cash and cash equivalents at beginning of period 96 950 113 710 113 710
Net cash and cash equivalents at end of period 123 436 125 028 96 950
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Ordinary share capital Retained earnings
& share premium (net Other and non-controlling
R'000 of treasury shares) reserves interest Total
Balance at 1 July 2011 (38 934) (4 270) 451 440 408 236
Total comprehensive income for the year - 4 324 113 737 118 061
Profit for the year - - 114 382 114 382
Other comprehensive income - 4 324 (645) 3 679
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners (21 569) - (65 416) (86 985)
Distributions to equity holders - - (65 416) (65 416)
Impact of incentive scheme (including tax) (5 799) - - (5 799)
Own shares acquired (15 770) - - (15 770)
Changes in ownership interests in subsidiaries that
do not result in a loss of control - - (13 706) (13 706)
Acquisition of non-controlling interest in subsidiary - - (13 706) (13 706)
Total transactions with owners (21 569) - (79 122) (100 691)
Balance at 30 June 2012 (60 503) 54 486 055 425 606
Total comprehensive income for the period - 4 892 77 268 82 160
Profit for the period - - 77 533 77 533
Other comprehensive income - 4 892 (265) 4 627
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners (5 419) - (40 540) (45 959)
Distributions to equity holders - - (40 540) (40 540)
Own shares acquired (5 419) - - (5 419)
Total transactions with owners (5 419) - (40 540) (45 959)
Balance at 31 December 2012 (65 922) 4 946 522 783 461 807
CONDENSED CONSOLIDATED OPERATING SEGMENT REPORT
Unaudited six Unaudited six Audited
months ended months ended year ended
R'000 31 Dec 2012 31 Dec 2011 30 June 2012
Revenues
Manufacturing and Distribution (refer footnote a) 113 088 60 886 142 821
Franchise - Spur 92 114 78 916 155 433
Franchise - Panarottis 8 382 6 370 12 952
Franchise - John Dory's 5 847 5 490 11 092
Franchise - DoRego's 4 912 - 2 498
Other South Africa 16 070 12 538 34 395
Total South Africa segments 240 413 164 200 359 191
Unallocated - South Africa 98 60 205
Total South Africa 240 511 164 260 359 396
United Kingdom 55 521 40 608 81 631
Australia 29 479 27 057 53 140
Other International 6 125 4 281 9 277
Total International segments 91 125 71 946 144 048
TOTAL EXTERNAL REVENUES 331 636 236 206 503 444
Profit/(loss) before income tax
Manufacturing and distribution (refer footnote a) 33 043 28 419 55 662
Franchise - Spur 82 492 69 927 136 447
Franchise - Panarottis 5 291 3 778 7 866
Franchise - John Dory's 3 474 2 832 5 818
Franchise - DoRego's 2 353 - 928
Other South Africa 274 401 1 427
Total South Africa segments 126 927 105 357 208 148
Unallocated - South Africa (refer footnote b) (15 045) (20 607) (36 445)
Total South Africa 111 882 84 750 171 703
United Kingdom 993 43 694
Australia (refer footnote c) 79 1 060 (682)
Other International 3 652 3 036 5 305
Total International segments 4 724 4 139 5 317
Unallocated - International (refer footnote d) (5 303) (440) (1 920)
Total International (579) 3 699 3 397
TOTAL PROFIT BEFORE INCOME TAX 111 303 88 449 175 100
FOOTNOTES:
a) Includes revenue of R39.200 million (R23.485 million for the year ended 30 June 2012) and profit before tax of R1.435 million (R0.948 million
for the year ended 30 June 2012) in respect of the DoRego's distribution centre for the current year (refer note 4).
b) Includes a charge in respect of cash-settled share-based payments of R8.590 million (2011: R1.211 million; year ended 30 June 2012: R3.965
million) and a fair value gain in respect of a related hedge of R15.027 million (2011: R2.277 million; year ended 30 June 2012: R7.479 million).
Also includes legal costs of R0.247 million (2011: R2.901 million; year ended 30 June 2012: R3.171 million) relating to the dispute with the former
minority shareholder of John Dory's Franchise (Pty) Ltd. The prior year includes due diligence costs in respect of the DoRego's acquisition and other
acquisitions which were not progressed in the amount of R0.725 million. The results for the year ended 30 June 2012 include a bargain purchase gain
on the acquisition of DoRego's in the amount of R3.694 million (refer note 4).
c) The results for the year ended 30 June 2012 include an impairment of goodwill in the amount of R1.564 million.
d) Includes a foreign exchange loss of R1.148 million (2011: gain of R1.627 million; year ended 30 June 2012: gain of R2.288 million).
SUPPLEMENTARY INFORMATION
Unaudited six Unaudited six Audited
months ended months ended % year ended
R'000 31 Dec 2012 31 Dec 2011 change 30 June 2012
Shares in issue (000's) (note 3) 86 019 87 214 86 256
Weighted average number of shares in issue (000's) 86 112 87 214 87 124
Diluted weighted average number of shares in issue (000's) 86 112 87 529 87 377
Headline earnings per share (cents) 89.91 66.71 34.8 128.32
Diluted headline earnings per share (cents) 89.91 66.47 35.3 127.95
Net asset value per share (cents) 536.87 507.27 5.8 493.42
Dividend per share (cents) 55.0 40.0 37.5 87.0
NOTES
1. The unaudited interim condensed consolidated results for the six months ended 31 December 2012 have been prepared in accordance with the recognition and measurement
principles of International Financial Reporting Standards ("IFRS"), the presentation and disclosure requirements of IAS 34 - Interim Financial Reporting and the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee, the requirements of the South African Companies Act (No. 71 of 2008) and the JSE Limited Listings
Requirements. The accounting policies and methods of computation applied in these results have been consistently applied to prior periods and are consistent with those applied
in the preparation of the group's annual financial statements for the year ended 30 June 2012.
2. It was announced on SENS on 29 November 2012, following the conclusion of a transaction whereby Mr Dean Hyde disposed of all his direct and indirect interests in Spur group
franchises, that his designation on the board changed from non-executive director to that of independent non-executive director, with effect from 26 November 2012.
3. Shares in issue less shares repurchased by a wholly owned subsidiary company and share incentive special purpose entity.
4. The group purchased the DoRego's fast food restaurant franchise and distribution centre businesses as a going concern with effect from 1 March 2012. The group acquired the
remaining 35% interest in John Dory's Franchise (Pty) Ltd with effect from 25 January 2012.
5. With effect from 1 October 2012, the group acquired a 100% interest in Trinity Leasing Limited ("Trinity"), a company resident and incorporated in the United Kingdom, for
GBP40,000. Trinity owns the lease and trading assets of Arapaho Spur in Staines in the United Kingdom. Prior to the transaction, Arapaho Spur was operated under a master
franchise arrangement with an external third party in the UK. The purchase consideration was settled by way of reduction of a loan receivable from the seller. The purchase
price allocation in accordance with IFRS 3 Business Combinations has not yet been finally determined as information required to be able to determine the fair values of the
assets and liabilities acquired is outstanding from the seller. The value of the consideration has been provisionally attributed to property, plant and equipment. The entity has
contributed revenue of R3.478 million and a loss before and after tax of R0.257 million for the period.
Directors
Executive Chairman: A Ambor
Chief Executive Officer: P van Tonder
Executive: M Farrelly, R van Dijk
Non-executive: K Getz, D Hyde, M Kuzwayo,
K Madders MBE (British), M Morojele
Company secretary: R van Dijk
Spur Corporation Limited (Registration number 1998/000828/06)
Share code: SUR ISIN: ZAE000022653
Registered Office: 14 Edison Way, Century Gate Business Park, Century City, 7441
Transfer Secretaries: Computershare Investor Services (Pty) Ltd,
70 Marshall Street, Johannesburg, 2001
Sponsor: Sasfin Capital (A division of Sasfin Bank Ltd)
www.spurcorporation.co.za
Date: 07/03/2013 12:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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