Resignation of non-executive directors, delay in publication of year end results and further deferment of dividend

Spur Corporation Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/000828/06)
Share code: SUR
ISIN: ZAE 000022653
(“Spur Corporation” or “the group” or “the company”)


BOARD AND COMMITTEE CHANGES; DELAY IN RELEASE OF ANNUAL
RESULTS; FURTHER DEFERMENT OF INTERIM 2020 DIVIDEND

RESIGNATION OF NON-EXECUTIVE DIRECTORS
Shareholders are advised that Mntungwa Morojele and Dineo Molefe have
resigned as non-executive directors of the group with effect from 1 September
2020 and 3 September 2020 respectively.

Spur Corporation chairman Mike Bosman said: “Dineo’s resignation follows her
appointment as chief financial officer of MTN South Africa which was announced
this week and we congratulate her on this appointment. Mntungwa has resigned
owing to increased professional responsibilities which include starting a new
business in the field of renewable energy and his appointment from 1 September
2020 as a non-executive director of another listed company.”

“On behalf of the board of directors I thank Mntungwa and Dineo for their
contributions as independent non-executive directors over the past 10 years and
7 years respectively. In particular, I thank Mntungwa for the role he has played as
lead independent director and Dineo for her leadership of the audit committee over
the past two years. We wish them both continued success in their careers.”

APPOINTMENT OF CHAIR OF AUDIT COMMITTEE
Cora Fernandez, an independent non-executive director and member of the audit
committee, has been appointed chair of the audit committee with effect from 3
September 2020, to replace Dineo Molefe.

DELAY IN THE RELEASE OF FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2020
Shareholders are referred to the JSE Limited’s general announcement of 3 April
2020 and the third market notice issued by the Financial Sector Conduct Authority
(“FSCA”) on 7 July 2020 relating to the impact of the Covid-19 pandemic and
national lockdown on financial reporting and auditing processes.

The board of directors of the company (“board”) have resolved to utilise the
extension period granted by the FSCA. The audited financial results for the year
ended 30 June 2020, the audited annual financial statements and the integrated
annual report will therefore be released on or about 28 October 2020.

FURTHER DEFERMENT OF INTERIM DIVIDEND PAYMENT FOR THE SIX
MONTHS ENDED DECEMBER 2019
Shareholders are referred to the SENS announcements dated 30 and 31 March
2020 advising that payment of the interim dividend for the six months ended 31
December 2019, announced on 27 February 2020, in the amount of R71 million
(“the interim 2020 dividend”), was deferred to 5 October 2020, subject to
compliance with the JSE Listings Requirements and the South African Companies
Act (“Companies Act”).

The group experienced a significant decline in income for the duration of the
national lockdown period in South Africa and in most foreign jurisdictions, as
reported on SENS on 13 May 2020 and 23 July 2020. Following the total
prohibition of restaurant trading in April 2020, the group’s franchised restaurant
sales declined by 85.7% for May 2020 and by 79.0% for June 2020, as restaurant
trading was restricted to deliveries for May 2020 and to deliveries and takeaways
for June 2020, with sit-down service only resuming on 29 June 2020.

Trading has steadily improved since the beginning of May 2020, although still
significantly down on pre-lockdown levels. While the board is confident that trading
will continue to improve, there is no guarantee that this will be case.

In terms of sections 46(1) and 46(3) of the Companies Act, prior to sanctioning the
payment of the interim 2020 dividend on 5 October 2020, the board must conclude
and resolve that the company will satisfy the solvency and liquidity test in terms of
section 4 of the Companies Act (“solvency and liquidity test”) immediately after
payment of the interim 2020 dividend. The solvency and liquidity test requires the
board to consider all reasonably foreseeable financial circumstances of the
company at the time of making the assessment. The directors believe that it is a
reasonably foreseeable possible event that more stringent trading restrictions
could be re-imposed if the Covid-19 infection rate increases, which could have a
further negative impact on the business of the group. Similarly, should the current
restrictions be extended over the long term, the current projected recovery will be
delayed. Based on an assessment of the most likely projected cash flows and
currently available information, the board is confident that the group’s current cash
reserves will be sufficient for the foreseeable future. The payment of the interim
2020 dividend would however significantly reduce the group’s available cash
reserves and would result in a cash deficit should certain of the scenarios projected
occur. Accordingly, in compliance with the Companies Act, the board has had to
defer the payment of the interim 2020 dividend and will reassess the solvency and
liquidity test prior to the publication of its interim results for the period ending 31
December 2020, which are expected to be issued in March 2021. A further
announcement will be made at that time regarding the interim 2020 dividend.

Cape Town

3 September 2020


Sponsor
Sasfin Capital
A member of the Sasfin Group

Date: 03-09-2020 04:00:00
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