Spur Corporation Limited - Reviewed Results For The Year Ended 30 June 2005 Spur Corporation Limited (Registration number 1998/000828/06) Share code: SUR ISIN: ZAE000022653 REVIEWED RESULTS FOR THE YEAR ENDED 30 JUNE 2005 KEY PERFORMANCE INDICATORS Operating profit +37% Headline earnings +37% Headline earnings per share +42% ABRIDGED INCOME STATEMENT Reviewed Audited 12 months 12 months ended % ended R`000 Note 30/06/05 Increase 30/06/04 Turnover 200 632 11% 181 044 Profit from operations 1 68 531 37% 50 201 Net interest received 4 823 1% 4 778 Profit before taxation 73 354 33% 54 979 Taxation (21 348) (17 801) Profit after taxation 52 006 40% 37 178 Earnings attributable to outside shareholders (84) - Earnings attributable to ordinary shareholders 51 922 40% 37 178 RECONCILIATION OF HEADLINE EARNINGS Earnings attributable to ordinary shareholders 51 922 40% 37 178 Headline earnings adjustments: - Loss on sale of associate companies - 499 - Profit on sale of company stores - (444) - Profit on sale of fixed assets (838) - Headline earnings 51 084 37% 37 233 STATISTICS Shares in issue (000`s) 2 88 156 93 466 Weighted average number of shares in issue (000`s) 90 783 93 729 Earnings per share (cents) 57.19 44% 39.67 Headline earnings per share (cents) 56.27 42% 39.72 Diluted earnings per share (cents) 57.04 44% 39.67 Diluted headline earnings per share (cents) 56.12 41% 39.72 Distribution per share (cents) 40.00 33% 30.00 NOTES 1 - Profit from operations includes a foreign exchange gain of R2.5 million (2004: loss R3.9 million). 2 - Shares in issue less shares repurchased by a wholly owned subsidiary company and share incentive trust. STATEMENT OF CHANGES IN EQUITY Shares repurchased by subsidiary Share Share and share R`000 capital premium incentive trust Balance at 1 July 2003 1 218 802 (8 753) Profit for the year Distributions (25 873) Shares repurchased (882) Balance at 30 June 2004 1 192 929 (9 635) Profit for the year Taxation movements Distributions (35 148) Shares repurchased (28 881) Balance at 30 June 2005 1 157 781 (38 516) Accumulated R`000 profit/(deficit) Total Balance at 1 July 2003 (81 866) 128 184 Profit for the year 37 178 37 178 Distributions (25 873) Shares repurchased (882) Balance at 30 June 2004 (44 688) 138 607 Profit for the year 51 922 51 922 Taxation movements (1 675) (1 675) Distributions (35 148) Shares repurchased (28 881) Balance at 30 June 2005 5 559 124 825 ABRIDGED BALANCE SHEET Reviewed Audited R`000 30/06/05 30/06/04 NON-CURRENT ASSETS 86 380 64 819 - Property, plant and equipment 26 231 9 086 - Intangibles 8 465 - - Investments and loans 18 569 16 050 - Deferred tax 33 115 39 683 CURRENT ASSETS 77 332 106 084 - Inventory 5 024 4 213 - Trade and other receivables 28 084 23 220 - Cash resources 41 637 76 672 - Taxation 2 587 1 979 TOTAL ASSETS 163 712 170 903 EQUITY AND LIABILITIES CAPITAL AND RESERVES 124 825 138 607 - Ordinary share capital 1 1 - Share premium 119 265 183 294 - Accumulated profit/(deficit) 5 559 (44 688) Minority interests 4 124 - CURRENT LIABILITIES 34 763 32 296 - Trade and other payables 20 561 20 545 - Shareholders for distribution 213 244 - Bank overdraft 1 934 2 622 - Taxation 12 055 8 885 TOTAL EQUITY AND LIABILITIES 163 712 170 903 ABRIDGED CASH FLOW STATEMENT Reviewed Audited 12 months 12 months ended ended R`000 30/06/05 30/06/04 Cash generated from operations 67 461 56 937 Net interest received 4 823 4 778 Taxation paid (13 892) (12 421) Distributions paid (35 179) (25 821) Working capital changes (5 929) 3 446 Cash flow from operating activities 17 284 26 919 Cash effects of investing activities (23 126) (948) Cash effects of financing activities (28 881) (882) Net movement in cash and cash equivalents (34 723) 25 089 Adjustment for foreign exchange fluctuations 376 (1 383) Net cash and cash equivalents at beginning of year 74 050 50 344 Net cash and cash equivalents at end of year 39 703 74 050 BASIS OF ACCOUNTING These reviewed financial 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 year ended 30 June 2004, with the exception of the adoption of IFRS 3 - Business Combinations. These results have been reviewed by KPMG Inc. and their unqualified review report is available for inspection at the company`s registered office. FINANCIAL AND OPERATING REVIEW During the past financial year we again experienced buoyant trading conditions. While the first six months, which includes the festive season, is traditionally our stronger trading period, we are particularly pleased with our performance in the latter half of the year under review. Spur prides itself on being a South African restaurant chain, which has becomean icon for all South Africans. The growth of the country`s middle class, with its increased spending power, has been a positive development for our economy, and the group`s value-based offering is finding increasing support from this rapidly growing sector of the consumer market. Turnover for the year advanced by 11% to R200.6 million (2004: R181.0 million). This includes the impact of the decreased wholesale and distribution sales that resulted from the decision taken during the year to outsource the national distribution of our central kitchen products. The outsourcing of this function will ensure consistency and quality of delivery to our outlets nationally. It is significant to note that our core franchise royalty income advanced by 19%. As we benchmark our performance on the growth in turnover of our existing stores, it is encouraging that same store turnover was 13% ahead of last year, which is substantially higher than menu inflation of 4.5%. Operating profit, boosted by unrealised foreign exchange gains of R2.5 million, increased by 37% to R68.5 million. Headline earnings of R51.1 million (2004: R37.2 million) increased by 37%, while headline earnings per share of 56.3 cents were 42% ahead of 2004 (2004: 39.7 cents), in line with the trading statement issued on 24 August 2005. The group has grown its store base to 287 across its three brands locally and internationally: Franchise brand South Africa International Total Spur Steak Ranches 200 24 224 Panarottis Pizza Pasta 48 8 56 John Dory`s Fish & Grill 7 - 7 Total 255 32 287 PROSPECTS Indications are that the Consumer Price Index and interest rates are likely to remain steady for the year ahead. These factors are expected to provide a favourable trading environment for the year ahead and the board and management are confident of continued solid growth. CAPITAL DISTRIBUTION In accordance with a general authority given to the directors at the annual general meeting held on 25 November 2004, shareholders are advised that the board of directors of the company has declared a capital distribution of R17,6 million payable to the company`s shareholders in lieu of dividends, to be written off against the share premium account, which equates to 20 cents per ordinary share (`the distribution`) The distribution will be paid on Monday, 10 October 2005, to those shareholders of the company who are recorded in the company`s register on Friday, 7 October 2005 (`the record date`). The last day to trade (cum the distribution) in the company`s shares for purposes of entitlement to the distribution, will be Friday, 30 September 2005. The shares will commence trading ex the distribution on Monday, 3 October 2005. Share certificates may not be dematerialised or rematerialised between Monday, 3 October 2005 and Friday, 7 October 2005, both days inclusive. Cape Town On behalf of the Board 15 September 2005 A Ambor (Executive Chairman) P van Tonder (Managing Director) Directors: A Ambor (Executive Chairman), P van Tonder (Managing Director), M Farrelly, K Getz*, D Hyde*, P Joffe, K Madders* (British), J Rabb*, K Robertson Company secretary : R van Dijk (* non-executive) www.spur.co.za Spur Corporation Limited (Registration number 1998/000828/06) Share code: SUR ISIN: ZAE000022653 Registered Office 1 Waterford Mews, Century Blvd, Century City, 7441 Transfer Secretaries Computershare Limited, 70 Marshall Street, Johannesburg, 2001 Sponsor : Sasfin Corporate Finance (A division of Sasfin Bank Ltd) Date: 15/09/2005 12:00:11 PM Produced by the JSE SENS Department