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