Spur Corporation Limited
(Registration number 1998/000828/06)
Share code:SUR ISIN code:ZAE000022653
UNAUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2001
KEY PERFORMANCE INDICATORS
Headline Earnings +17%
S.A. Franchise Income +15%
International Franchise Income +19%
INCOME STATEMENT
Unaudited Audited
12 months 12 months
ended % ended
R000's Note 30/06/01 Increase 30/06/00
Turnover 1 127 536 1 126 014
Operating profit 2 39 830 5 37 945
Interest Received 2 591 -
Interest Paid 3 (1 020) (1 488)
Net interest received/(paid) 1 571 (1 488)
Profit before taxation 41 401 14 36 457
Taxation (9 732) (9 371)
Earnings/Headline Earnings 31 669 17 27 086
Statistics
Weighted average number
of shares in issue (000's) 4 90 385 83 105
Fully diluted number of shares
in issue 97 143 89 090
Earnings/Headline earnings
per share (cents) 35.04 8 32.59
Fully diluted earnings
per share (cents) 33.00 10 30.40
Distribution per share (cents) 17.50 16.50
NOTES
Note 1: Turnover
S.A. franchise income 49 045 15 42 738
International franchise income
(excluding Zimbabwe) 3 823 19 3 214
International franchise income
- Zimbabwe 403 -53 864
Company-owned stores 8 840 -29 12 411
Sale of goods 65 425 -2 66 787
127 536 1 126 014
The turnover of company-owned stores declined due to the closure of one and
the convertion of four stores into franchised outlets.
Turnover from the sale of goods declined as a result of the outsourcing
of a number of licenced products previously sold through the GroupOs Central
Kitchens.
Note 2:
Operating profit grew by only 5% due mainly to the write- off of all
development costs incurred in expanding the brands into international
markets (in keeping with our accounting policies) and a provision made in
anticipation of difficulties in recovering royalty income from our Zimbabwe
operations.
Note 3:
Interest paid includes interest on debentures at a rate of 9.45%. The
debentures, being compulsorily convertible on or before 30 June 2004, are
reflected as equity in the Balance Sheet.
Note 4:
The increase in the weighted average number of shares in issue arose
primarily from Siphumele Investments exercising their option to acquire a
further 6 270 641 shares during the previous financial year. In addition the
Company purchased 923 100 shares in terms of its buy-back programme.
STATEMENT OF CHANGES IN EQUITY
Share Share Unissued Retained
R000's Capital Premium Shares Earnings Total
Opening balance
as at 01/07/2000 1 254 058 7 360 (168 960) 92 459
Purchase of
own shares - (1 886) - (1 886)
Retained income
for the period - - - 31 669 31 669
Write off of
intangible assets - - - (6 673) (6 673)
Distributions
during the period - (15 903) - - (15 903)
CLOSING BALANCE
AS AT 30/06/2001 1 236 269 7 360 (143 964) 99 666
BALANCE SHEET
Unaudited Audited
R000's 30/06/01 30/06/00
NON-CURRENT ASSETS 74 503 73 702
- Tangible assets 7 359 9 437
- Loans 11 016 2 524
- Deferred tax 56 128 61 741
CURRENT ASSETS 52 245 51 188
- Inventory 3 651 3 566
- Trade and other receivables 30 174 27 272
- Cash resources 18 420 20 077
- Taxation - 273
TOTAL ASSETS 126 748 124 890
EQUITY AND LIABILITIES
EQUITY CAPITAL AND RESERVES 99 666 92 459
- Ordinary share capital 1 1
- Share premium 236 269 254 058
- Compulsory convertible debentures 7 360 7 360
- Retained income (143 964) (168 960)
NON-CURRENT LIABILITIES 3 223 4 337
- Liability portion of
convertible debentures 3 049 3 693
- Loans 174 644
CURRENT LIABILITIES 23 859 28 094
- Trade and other payables 13 557 20 824
- Shareholders for distribution 7 724 7 270
- Taxation 2 578 -
TOTAL EQUITY AND LIABILITIES 126 748 124 890
CASH FLOW STATEMENT
Unaudited Audited
12 months 12 months
ended ended
R000's 30/06/01 30/06/00
Cash generated from operations 39 473 38 687
Finance income - net 1 571 (1 141)
Working capital changes (9 071) (714)
Taxation paid (4 961) (802)
Distribution (15 448) (14 144)
Cash flow from operating activities 11 564 21 886
Cash flow from investing activities (2 405) (4 359)
Cash flow from financing activities (15 381) 32 836
Net increase/(decrease) in cash
and cash equivalents 1 412 50 363
Less: adjustment for sale of subsidiary (245)
Net cash and cash equivalents
at beginning of period 20 077 (30 286)
Net cash and cash equivalents
at end of period 18 420 20 077
GENERALLY ACCEPTED ACCOUNTING PRACTICE
These unaudited results have been prepared in accordance with Generally
Accepted Accounting Practice. The accounting policies used in the
preparation of these results are consistent with those used in the
preparation of the annual financial statements for the year ended 30th June
2000.
FINANCIAL AND OPERATING REVIEW
We are pleased to report that the initiatives and strategies which were
introduced by Spur Group management early in the 2000/2001 financial year
and implemented on the ground by committed franchisees, have enabled the
Group to achieve its growth and revenue targets. Despite operating in a
market characterised by significant shifts in spending on new services and
industries, low consumer confidence and increased competition, the Group has
achieved a 15% growth in turnover from its core South African franchising
division. Our International arm grew revenues by 19% which is most pleasing,
as well as strengthening the Rand hedge component of our earnings. Headline
earnings were 17% higher than the previous year. The Company remains in a
strong positive cash position and has continued to show earnings growth from
this source.
SPUR:
In the past financial year we opened 10 new Spur Steak Ranches in South
Africa. We have also totally revamped a further 20 stores. This process has
revitalised the Spur brand and has produced turnover growth in excess of 25%
for these stores. In addition, 6 established outlets have been relocated to
areas which are demographically better suited to their business. From Spur
Group's perspective, these changes have led to a considerable increase in
our market share and is an ongoing strategy which will be pursued by our
development team in conjunction with our franchisees and property
developers.
On the international front we are pleased to report that our second store
in Ireland has opened in Limerick ahead of schedule and a strong revenue
stream has already confirmed the merit of this expansion. We are currently
completing the development of a new outlet in Bathurst, Australia, with the
possibility of a further two outlets within the next financial year. We
continue to explore further opportunities in Africa, Ireland and the United
Kingdom, but as has been stressed on numerous occasions, Franchisees are
carefully identified and site locations and viabilities minutely examined
before Spur commits to new overseas outlets. This disciplined approach will
continue to be adopted with future overseas expansion.
PANAROTTIS:
During the past financial year, we opened 11 new Panarottis outlets. Some of
these were combo stores, which is a concept where a Spur and Panarottis
outlet are situated next to each other, thereby expanding the offering to
the consumer as well as rationalising the Franchisee's costs. The succesful
launch of the new menu, the introduction of several improved pasta products
and the revamping of our brand image and advertising campaigns have had an
encouraging effect on turnovers. We plan to open 12 new stores in the next
financial year bringing the total number of outlets to 65.
BUSTA'S:
The year under review was extremely promising as 14 new Busta's outlets were
opened, whilst existing businesses showed encouraging signs of growth. The
ongoing relationship with the Total La Boutique brand of forecourt shops
continues to provide good growth opportunities for the brand and a further
10 outlets are planned for the year ahead.
PROSPECTS
For the year ahead the Group is well placed to achieve resilient performance
from existing outlets as well as growth in new stores both nationally and
internationally. Optimisation of our greatest asset - our people - has
always been crucial to our success, and we are confident that ongoing
investment in both our intellectual and brand capital will continue to yield
strong results in all our operations.
CAPITAL DISTRIBUTION
Notice is hereby given that, subject to JSE and shareholder approval, the
Board has declared a capital distribution in lieu of dividends, of 8.5 cents
per share. The last date to trade in the shares for purposes of entitlement
to the distribution is Friday 28th September 2001. The shares will commence
trading ex-distribution on Monday 1st October 2001 and the record date is
Friday 5th October 2001. The distribution will be paid on Monday 8th October
2001.
For and on behalf of the Board
A.J. Ambor (Executive Chairman)
P.G. van Tonder (Managing Director)
Cape Town 6 September 2001
Registered Office
5th Floor, Matrix House, 73 Strand Street, Cape Town, 8001
Transfer Secretaries
Mercantile Registrars Ltd, 11 Diagonal Street, Johannesburg, 2001
SPUR STEAK RANCHES PANAROTTIS BUSTA'S KELSEYS
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