Spur Corporation Limited - Reviewed results for the year ended 30 June 2002
Spur Corporation Limited
(Registration number 1998/000828/06)
Share code: SUR
ISIN: ZAE000022653
REVIEWED RESULTS FOR THE YEAR ENDED 30 JUNE 2002
KEY PERFORMANCE INDICATORS
Headline Earnings +22%
Headline Earnings per Share +18%
S.A. Franchise Income +14%
International Franchise Income +28%
INCOME STATEMENT
Reviewed Audited
12 months 12 months
ended % ended
R`000 Note 30/06/02 Increase 30/06/01
Turnover 1 138 024 8 127 536
Operating profit 46 054 16 39 562
Interest received 3 107 2 591
Interest paid (400) (1 020)
Net interest received 2 707 1 571
Exceptional items 2 (1 679) -
Profit before taxation 47 082 14 41 133
Taxation (10 271) (9 701)
Profit after taxation 36 811 17 31 432
RECONCILIATION BETWEEN
EARNINGS AND HEADLINE EARNINGS
Earnings attributable to
ordinary shareholders 36 811 31 432
Exceptional items 1 679 -
Headline earnings 38 490 22 31 432
Statistics
Shares in issue (000`s) 3 94 884 89 952
Weighted average number
of shares in issue (000`s) 4 93 822 90 354
Fully diluted number
of shares in issue (000`s) 93 822 97 112
Earnings per share (cents) 39.23 13 34.79
Headline earnings
per share (cents) 41.02 18 34.79
Fully diluted headline earnings
per share (cents) 41.02 27 32.37
Distributions per share (cents)
(Including proposed
November 2002 distribution) 20.50 17 17.50
NOTES
Note 1: Turnover
S.A. franchise income 48 767 14 42 962
International franchise income 4 756 28 3 726
Licence fees 1 714 (39) 2 818
Company-owned stores 2 238 (75) 8 840
Sale of goods and services 80 549 16 69 190
138 024 8 127 536
Note 2: Exceptional items comprise loans written-off.
Note 3: Shares in issue less shares repurchased by a wholly owned subsidiary
company.
Note 4: The increase in the weighted average number of shares in issue arose
from the conversion of 6 758 299 debentures into ordinary shares in
the ratio of 1 debenture to 1 ordinary share on 30 September 2001. In
addition the company repurchased 1 825 924 shares in terms of its
buyback programme in 2002.
BALANCE SHEET
Reviewed Audited
R`000 30/06/02 30/06/01
ASSETS
NON-CURRENT ASSETS 89 123 78 910
- Fixed assets 7 253 7 268
- Interest in associated companies 27 148 15 128
- Loans 3 573 -
- Deferred tax 51 149 56 514
CURRENT ASSETS 64 394 56 822
- Inventory 4 234 5 140
- Trade and other receivables 24 546 33 064
- Loans 1 934 156
- Cash resources 33 680 18 462
TOTAL ASSETS 153 517 135 732
EQUITY AND LIABILITIES
EQUITY CAPITAL AND RESERVES 123 867 106 174
- Ordinary share capital 1 1
- Share premium and shares repurchased 233 393 243 994
- Accumulated deficit (109 527) (145 181)
- Equity portion of convertible debentures - 7 360
NON-CURRENT LIABILITIES - 2 464
- Liability portion of convertible debentures - 2 290
- Loans - 174
CURRENT LIABILITIES 29 650 27 094
- Trade and other payables 18 555 22 141
- Bank overdraft 9 148 1 653
- Taxation 1 446 2 578
- Shareholders for distribution 501 722
TOTAL EQUITY AND LIABILITIES 153 517 135 732
CASH FLOW STATEMENT
Reviewed Audited
12 months 12 months
ended ended
R`000 30/06/02 30/06/01
Cash generated from operations 46 119 40 515
Finance income - net 2 707 1 571
Taxation paid (6 038) (4 961)
Distributions (17 708) (15 448)
Working capital changes 6 735 (11 060)
Cash flow from operating activities 31 815 10 617
Cash flow from investing activities (19 100) (9 003)
Cash flow from financing activities (4 992) (3 229)
Net increase (decrease) in cash
and cash equivalents 7 723 (1 615)
Net cash and cash equivalents
at beginning of period 16 809 18 424
Net cash and cash equivalents
at end of period 24 532 16 809
STATEMENT OF CHANGES IN EQUITY
Shares
R1000 Share Share Unissued Distributable Repurchased
Capital Premium Shares Reserves by Subsidiary Total
Balance at
1 July 2000 1 261 328 7 360 (169 940) - 98 749
As previously
stated 254 058 (168 960)
Change in
accounting policy 7 270 (980)
Net profit
for the year - - - 31 432 - 31 432
Distributions - (15 448) - - - (15 448)
Write-off of
Intangible
assets - - - (6 673) - (6 673)
Shares
Repurchased - - - - (1 886) (1 886)
Balance at
30 June 2001 1 245 880 7 360 (145 181) (1 886)106 174
As previously
stated 238 156 (143 964)
Change in
Accounting
policy 7 724 (1 217)
Net profit
for the year - - - 36 811 - 36 811
Distributions - (17 487) - - - (17 487)
Shares issued - 11 400 (7 360) (1 157) - 2 883
Shares repurchased - - - - (4 514) (4 514)
Balance at
30 June 2002 1 239 793 - (109 527) (6 400)123 867
BASIS OF PREPARATION OF FINANCIAL STATEMENTS
These reviewed results have been prepared in accordance with South African
Statements of Generally Accepted Accounting Practice and the accounting policies
used in the preparation of these results are consistent with the prior year
other than as set out below.
CHANGE IN ACCOUNTING POLICIES
In accordance with recently amended South African statements of Generally
Accepted Accounting Practice with regard to depreciation of buildings (AC 135),
recognition of distributions to shareholders (AC 107) and provision for leave
pay (AC 116) the Group has changed its policy and now complies with the
requirements of these statements of Generally Accepted Accounting Practice.
COMPARATIVE FIGURES
Comparative figures have been restated to accord with changes in accounting
policies and current year classifications.
FINANCIAL AND OPERATING REVIEW
We are pleased to report that we have continued to experience buoyant trading
conditions at store level, which has enabled us to grow our existing base
substantially. The strategies and disciplines applied in all divisions of the
Group have been instrumental in ensuring another successful trading year. Our
core South African Franchising division achieved a 14% growth in turnover,
whilst our international arm grew by 28%. Operating profit was 16% up on the
previous financial year with headline earnings showing a 22% increase. The
Group`s cash position continues to strengthen and substantially higher earnings
were achieved from this source. It is anticipated that interest earnings will
advance strongly in the years ahead. During the year under review 8 new Spur
Steak Ranch outlets were opened in South Africa. A further 5 stores were
relocated to better trading sites, whilst 20 outlets were revamped to Spur`s
latest specifications. The ongoing revamp process has been a key factor in
substantially increasing the Group`s market share over the past few years. The
total number of Spur Steak Ranches trading in South Africa now stands at 184. On
the international front we have opened our first store in the United Kingdom, in
Staines, South West London, and the initial trading patterns are extremely
encouraging. This store, together with the Iowa Spur in Dublin and the Navajo
Spur in Limerick, makes up the complement of 3 stores initially envisaged in
terms of the joint venture investment needed to establish the intellectual
property base for Spur Europe. The new financial year will see the opening of
our first franchised outlet in Basingstoke, South London. Further stores are
also planned in Africa and Australia. The Panarottis division has undergone a
period of consolidation, with a large number of stores having been revamped in
order to re-establish the brand. We believe that the re-designed model, both in
terms of set-up costs and cash flows, will afford us the opportunity to expand
the brand more rapidly in future. Panarottis has experienced very difficult
trading conditions for the past two years, but with the support of the new
marketing initiatives as well as the operational strengths of the management
team, this brand has good potential for the year ahead.
PROSPECTS
As a management team, we remain primarily focused on our core South African
operations to ensure that we maintain a solid rate of growth.
We continue to deal with our offshore business on a prudent basis without
exposing the Group to any undue risks. The continued commitment of all staff
members is crucial to our ongoing success and we are confident that there is
strong motivation and dedication throughout our Group which should ensure a
solid performance in the year ahead.
REVIEWED RESULTS
Financial information has been reviewed by Arthur Andersen & Co., whose
unqualified review opinion is available for inspection at the Group`s registered
office. It is anticipated that an unqualified audit report will be issued once
the Group`s detailed annual financial statements have been finalised.
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 10.50 cents
per share. The last date to trade in the shares for purposes of entitlement to
the distribution is Friday, 1 November 2002. The shares will commence trading ex
distribution on Monday, 4 November 2002 and the record date is Friday, 8
November 2002. The distribution will be paid on Monday, 11 November 2002. Share
certificates may not be dematerialised or rematerialised between Monday, 4
November 2002 and Friday, 8 November 2002, both days inclusive. A circular will
be posted to shareholders on or about Wednesday, 9 October 2002 and a general
meeting of shareholders is to be held on or about Friday, 25 October 2002.
For and on behalf of the Board
A.J. Ambor (Executive Chairman)
P.G. van Tonder (Managing Director)
Cape Town 19 September 2002
Transfer Secretaries:
Computershare Investor Services Ltd,
11 Diagonal Street, Johannesburg, 2001
Sponsors:
Barnard Jacobs Mellet Corporate Finance (Pty) Ltd
Registered Office:
5th Floor, Matrix House, 73 Strand Street,
Cape Town, 8001
Share code: SUR
ISIN: ZAE000022653
(Registration number 1998/000828/06)
Website: www.spur.co.za
Date: 18/09/2002 05:05:00 PM Produced by the JSE SENS Department
Spur Serves Up Sizzling Results
Spur Serves Up Sizzling Results
Spur Corporation Limited
18 September 2002
SA`s favourite family restaurant group - Spur - celebrates its 35th birthday
year with another set of mouth-watering results: Headline earnings are up a
meaty 22% to R38,5 million (2001: R31,4 million) for the year ended 30 June
2002.
Headline EPS strengthened 18% to 41,02 cents (2001: 34,79 cents).
Operating profit was beefed up 16% to over R46 million (2001: R39,6 million) and
the Group served up a generous 20,5 cents/share (2001: 17,5 cents) distribution.
Spur Group MD Pierre van Tonder said the main ingredients in Spur`s profit
recipe included good strategic planning and implementation, firm management of
intellectual property, and revamping, relocating and opening new stores.
Executive chairman Allen Ambor also acknowledged the role of aggressive
marketing. The popular Howzit ad campaign and well-chosen kids promo items, for
example, boosted the customer base of both Spur Steak Ranches and Panarottis
pizza/ pasta outlets.
Spur has also invested in several new IT systems - some developed in-house - to
facilitate franchise data collection and feedback, regional management reporting
and purchase authorisation.
Kids` IT interests were also on the menu with the February launch of the only SA
children`s website offering free email. Response has been excellent, says Ambor,
with over 7000 visits in the first few months, of which more than 3000 were new
customers.
Local Spur Steak Ranch operations remain the key focus of the Group. Turnover
grew 14% to R48,8 million (2001: 42,9 million) and merchandise sales fattened up
16% to R80,5 million (2001: R69,2 million).
Despite competition from sizeable local and international contenders, Group
turnover increased 8% to R138 million (2001: R128 million).
The pizza/pasta division of the Group, Panarottis, has undergone a period of
consolidation, with the bulk of the stores revamped.
"We believe the re-designed model - in terms of set-up costs and cash flows -
will give us the opportunity to expand the brand rapidly," said van Tonder.
"With the support of a new ad agency, exciting marketing and menu innovations,
and the operational strength of the management team, this brand has good
potential."
Spur Corporation also invested in education and training at all levels and
launched a comprehensive HIV/AIDS awareness programme. The Group`s strategy is
awareness through education and it has not only educated its full-time staff but
also reached the wider community by informing thousands of part-time workers
about the epidemic.
Offshore, total franchise income from international operations fattened up 28%
from R3,7 million to R4,7 million through the Group`s carefully considered
expansion programme.
Spur braved UK territory for the first time by opening in Staines, south-west
London. The second Irish outlet opened in Limerick.
"Limerick is showing a reasonable cash flow, and the Arapaho Spur Steak Ranch in
Staines is already showing encouraging trading patterns," said van Tonder.
The Group will now expand in Europe on a franchised basis, with the first UK
franchised outlet opening in Basingstoke, south London, later this year.
"We also have some exciting African opportunities on the menu and will grow our
presence on the continent in the next 12 months," says van Tonder.
Existing Australian stores - three Steak Ranches and one Panarottis - are
trading well. The Cougar Spur Steak Ranch in Bathurst opened with trading
partners the Penrith Panthers, and Spur is seeking suitable franchise partners
in New South Wales.
The cash-flush Group is ideally placed to maximise any opportunities for new
growth as reserves amount to a hefty R24,5 million (2001: R16,8 million).
In the coming financial year Spur plans to:
- Prudently roll out several overseas franchises in the UK and Australia;
- Open well-located new stores in African countries with local
owner/operators;
- Maximise head office and regional IT;
- Continue strategic revamps, relocations and openings. Revamps can boost
store turnover by 25% and relocations can more than double turnover; and
- Invest in employee, franchisee and managerial education and training.
Ends
Issued by: Meropa Communications
Judy Bryant
(021) 683 6464
083 286 7168
On behalf of: Spur Corporation
Contact: Executive Chairman Allen Ambor
Group MD Pierre van Tonder
(021) 462 1293
Date: 18/09/2002 05:06:00 PM Produced by the JSE SENS Department
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