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SUR - Spur Corporation Limited - Unaudited condensed consolidated interim

Release Date: 03/03/2011 12:00
Code(s): SUR
Wrap Text

SUR - Spur Corporation Limited - Unaudited condensed consolidated interim results and cash dividend declaration for the six months ended 31 December 2010 Spur Corporation Limited (Registration number 1998/000828/06) Share code: SUR ISIN: ZAE000022653 UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS AND CASH DIVIDEND DECLARATION for the six months ended 31 December 2010 Revenue UP 13.3% Diluted headline earnings per share UP 9.5% FINANCIAL AND OPERATIONAL PERFORMANCE Spur Corporation showed strong revenue growth of 13.3% to R203.3 million, benefiting from new restaurant openings, the launch of the Spur Family Card loyalty programme, increase in frequency of customer visits and value-based promotional campaigns across all brands. Spur Steak Ranches increased restaurant turnover by 11.1%, Panarottis Pizza Pasta by 5.3% and John Dory`s Fish & Grill by 11.3%. Franchise fee income in Spur increased by 11.3% to R70.2 million, Panarottis by 6.8% to R6.0 million and John Dory`s by 10.8% to R5.0 million. Food prices were relatively stable for most of the period and there were no menu price increases during the past six months in South Africa. Trading conditions in the international markets were more challenging than the local environment, compounded by the extreme weather conditions in the United Kingdom in December, which impacted trading in several locations. International revenue, comprising franchise fee income and restaurant turnover, grew by 16.3% to R57.5 million, boosted by the opening of two new outlets (including one group-owned outlet) and the consolidation of three additional existing outlets. Manufacturing and distribution revenue was 14.4% higher at R54.9 million. The group`s manufacturing operations were consolidated into one facility in Cape Town, with the Johannesburg building being sold for R16.75 million subsequent to the reporting date. A building to house the group`s decor production in Cape Town was purchased subsequent to the reporting date at a cost of R10.0 million. Profit before income tax increased by 6.5% to R72.9 million. Comparable operating profit before finance income, excluding exceptional one off items, grew by 11.5%. These one-off items relate mainly to the start-up costs in new international company owned restaurants of R3.5 million and costs associated with the centralisation of the manufacturing facilities of R1.1 million. Headline earnings for the period increased by 7.4% to R48.7 million, with diluted headline earnings per share growing by 9.5% to 55.28 cents. The directors have declared an interim dividend of 33.0 cents per share. RESTAURANT EXPANSION The group increased its restaurant base to 367 outlets. The expansion of the Spur chain locally included the opening of the smaller format restaurants in Wellington, Meyerton and Bredasdorp. Internationally a new group-owned Spur restaurant was opened in Gateshead (England) and a new franchised Spur restaurant in Ezulwini (Swaziland). The Spur in Belfast (Northern Ireland) was converted from a franchised to a group owned outlet and the group also purchased the remaining 50% shareholding of the Spur in Penrith (Australia). The Panarottis outlet in Mingara (Australia), in which the group had a minority interest, was relocated to a better trading site in Tuggerah, which has positively impacted turnover, and the group now has a majority interest in the outlet. A summary of the group`s restaurant profile at 31 December 2010 is as follows: Franchise brand South Africa International Total Spur Steak Ranches 250 33 283 Panarottis Pizza Pasta 50 6 56 John Dory`s Fish & Grill 28 - 28 Total 328 39 367 PROSPECTS Although consumer optimism has improved as a result of the low interest rate environment and historically lower levels of inflation, heavy debt burdens, increasing fuel, utility and food prices and anticipated higher inflation remain a challenge. In this environment, sales growth will be driven by continued value-added and innovative promotions. These include a breakfast offering in Spur, week-day value specials in Panarottis and family weekend specials in John Dory`s. A Spur restaurant will be opened in Lilongwe (Malawi) and other African sites are being evaluated. No new restaurants are planned for the United Kingdom or Australia in the remainder of the financial year. Locally, the group will continue its restaurant expansion and refurbishment programme. INTERIM CASH DIVIDEND FOR THE SIX MONTHS TO 31 DECEMBER 2010 In accordance with a general authority given to the directors at the annual general meeting held on 10 December 2010, shareholders are advised that the board of directors of the company has approved a cash dividend of R32.2 million, which equates to 33.0 cents per share. The cash dividend will be paid on Monday, 28 March 2011, to those shareholders of the company who are recorded in the company`s register on Friday, 25 March 2011 ("the record date"). The last day to trade (cum dividend) in the company`s shares for purposes of entitlement to the dividend will be Thursday, 17 March 2011. The shares will commence trading ex dividend on Friday, 18 March 2011. Share certificates may not be dematerialised or rematerialised between Friday, 18 March 2011 and Friday, 25 March 2011, both days inclusive. For and on behalf of the Board A Ambor (Executive Chairman) Cape Town P van Tonder (Managing Director) 1 March 2011 CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Unaudited six Unaudited six
months ended months ended R`000 31/12/10 31/12/09 Revenue 203 302 179 450 Operating profit before finance income 70 654 65 854 Net finance income 2 287 2 658 Profit before income tax 72 941 68 512 Income tax expense (24 473) (22 693) Profit for the period 48 468 45 819 Other comprehensive losses: (6 226) (6 130) Foreign currency translation differences for foreign operations (7 472) (6 737) Foreign exchange gain on net investments in foreign subsidiaries 1 672 814 Tax on foreign exchange gain on net investments in foreign subsidiaries (426) (207) Total comprehensive income for the period 42 242 39 689 Profits/(losses) attributable to: Owners of the company 48 748 45 381 Non-controlling interest (280) 438 Profit for the period 48 468 45 819 Total comprehensive income/(losses)attributable to: Owners of the company 42 501 39 344 Non-controlling interest (259) 345 Total comprehensive income for the period 42 242 39 689 Per share (cents) Basic earnings 55.48 51.65 Diluted earnings 55.29 50.46 Dividends 33.00 32.00 Audited % year ended R`000 change 30/06/10 Revenue 13.3 348 024 Operating profit before finance income 7.3 118 549 Net finance income 4 380 Profit before income tax 6.5 122 929 Income tax expense (44 562) Profit for the period 5.8 78 367 Other comprehensive losses: (14 093) Foreign currency translation differences for foreign operations (21 719) Foreign exchange gain on net investments in foreign subsidiaries 10 236 Tax on foreign exchange gain on net investments in foreign subsidiaries (2 610) Total comprehensive income for the period 64 274 Profit/(losses) attributable to: Owners of the company 77 557 Non-controlling interest 810 Profit for the period 78 367 Total comprehensive income/(losses) attributable to: Owners of the company 63 540 Non-controlling interest 734 Total comprehensive income for the period 64 274 Per share (cents) Basic earnings 7.4 88.27 Diluted earnings 9.6 86.25 Dividends 3.1 60.00 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION Unaudited at Unaudited at Audited at R`000 31/12/10 31/12/09 30/06/10 ASSETS Non-current assets 378 118 402 119 382 609 Property, plant and equipment 73 559 87 689 75 184 Intangible assets and goodwill 285 769 279 714 279 609 Investments and loans 6 238 15 075 14 533 Deferred tax 10 586 17 299 11 128 Leasing rights 1 804 2 342 2 155 Other financial asset 162 - - Current assets 181 873 150 943 148 116 Inventories 4 915 5 262 6 389 Tax receivable 3 640 4 120 3 600 Trade and other receivables 68 273 65 577 53 499 Asset classified as held for sale 15 012 - - Cash and cash equivalents 90 033 75 984 84 628 TOTAL ASSETS 559 991 553 062 530 725 EQUITY Total equity 420 606 407 177 403 295 Ordinary share capital 1 1 1 Share premium 6 6 6 Shares repurchased by subsidiaries (29 910) (29 910) (29 910) Foreign currency translation reserve (11 376) 2 851 (5 129) Retained earnings 458 161 429 956 434 015 Total equity attributable to equity holders of the parent 416 882 402 904 398 983 Non-controlling interest 3 724 4 273 4 312 LIABILITIES Non-current liabilities 67 541 63 583 64 569 Long-term loans payable 4 754 9 289 7 181 Employee benefits 91 - - Operating lease liability 5 077 3 271 3 328 Deferred tax 57 619 51 023 54 060 CURRENT LIABILITIES 71 844 82 302 62 861 Bank overdraft 3 997 5 067 3 596 Tax payable 7 291 20 185 4 832 Trade and other payables 60 075 55 302 53 969 Shareholders for dividend 481 1 748 464 TOTAL EQUITY AND LIABILITIES 559 991 553 062 530 725 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Unaudited six Unaudited six Audited months ended months ended year ended R`000 31/12/10 31/12/09 30/06/10 Operating profit before working capital changes 74 416 71 780 134 474 Working capital changes (11 606) (2 229) 3 394 Cash generated from operations 62 810 69 551 137 868 Net interest received 2 287 2 658 4 948 Tax paid (19 292) (18 094) (49 528) Distributions paid (24 935) (47 970) (80 708) Net cash flow from operating activities 20 870 6 145 12 580 Cash flow from investing activities (17 939) (16 193) (13 574) Cash flow from financing activities 2 010 (60) 771 Net movement in cash and cash equivalents 4 941 (10 108) (223) Effect of foreign exchange fluctuations 63 (9) 221 Net cash and cash equivalents at beginning of period 81 032 81 034 81 034 Net cash and cash equivalents at end of period 86 036 70 917 81 032 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Ordinary share capital & share premium (net Other
R`000 of treasury shares) reserves Balance at 1 July 2009 (25 342) 29 442 Total comprehensive (losses)/ income for the year - (14 017) Profit for the year - - Other comprehensive losses - (14 017) Transactions with owners, recorded directly in equity Contributions by and distributions to owners (4 561) (20 554) Distributions to equity holders - - Impact of incentive scheme (including tax) (4 561) - Share-based payments transactions net of tax - 1 211 Transfer of share-based payment reserve to retained earnings - (21 765) Balance at 30 June 2010 (29 903) (5 129) Total comprehensive (losses)/income for the period - (6 247) Profit for the period - - Other comprehensive (losses)/income - (6 247) Transactions with owners, recorded directly in equity Contributions by and distributions to owners - - Distributions to equity holders - - Changes in ownership interests in subsidiaries that do not result in a loss of control - - Acquisition of minority interest in subsidiary - - Total transactions with owners - - Balance at 31 December 2010 (29 903) (11 376) Retained earnings and non-controlling R`000 interest Total Balance at 1 July 2009 430 220 434 320 Total comprehensive (losses)/income for the year 78 291 64 274 Profit for the year 78 367 78 367 Other comprehensive losses (76) (14 093) Transactions with owners, recorded directly in equity Contributions by and distributions to owners (70 184) (95 299) Distributions to equity holders (53 442) (53 442) Impact of incentive scheme (including tax) (38 507) (43 068) Share-based payments transactions net of tax - 1 211 Transfer of share-based payment reserve to retained earnings 21 765 - Balance at 30 June 2010 438 327 403 295 Total comprehensive (losses)/income for the period 48 489 42 242 Profit for the period 48 468 48 468 Other comprehensive (losses)/income 21 (6 226) Transactions with owners, recorded directly in equity Contributions by and distributions to owners (24 952) (24 952) Distributions to equity holders (24 952) (24 952) Changes in ownership interests in subsidiaries that do not result in a loss of control 21 21 Acquisition of minority interest in subsidiary 21 21 Total transactions with owners (24 931) (24 931) Balance at 31 December 2010 461 885 420 606 CONDENSED CONSOLIDATED OPERATING SEGMENT REPORT Unaudited six Unaudited six Audited months ended months ended year ended R`000 31/12/10 31/12/09 30/06/10 Revenue Manufacturing and Distribution 54 889 47 999 94 008 Franchise - Spur 70 239 63 094 124 411 Franchise - Panarottis 5 959 5 578 10 751 Franchise - John Dory`s 4 984 4 497 8 847 Other South Africa 9 709 8 806 17 554 Total South African segments 145 780 129 974 255 571 United Kingdom 33 510 30 086 56 080 Australia 20 234 16 291 30 013 Other International 3 778 3 099 6 360 Total International segments 57 522 49 476 92 453 TOTAL REVENUE 203 302 179 450 348 024 Profit/(loss) before income tax Manufacturing and Distribution 24 018 22 225 44 714 Franchise - Spur 60 941 54 786 107 339 Franchise - Panarottis 3 728 3 507 6 560 Franchise - John Dory`s 2 309 2 277 4 567 Other South Africa 168 (77) (691) Total South African segments 91 164 82 718 162 489 Unallocated - South Africa (15 456) (15 150) (28 220) Total South Africa 75 708 67 568 134 269 United Kingdom (4 066) (257) (12 396) Australia (600) 522 (1 807) Other International 3 120 2 653 5 287 Total International segments (1 546) 2 918 (8 916) Unallocated - International (1 221) (1 974) (2 424) Total International (2 767) 944 (11 340) TOTAL PROFIT BEFORE INCOME TAX 72 941 68 512 122 929 Segmental information for the period to 31 December 2009 has been restated to accord with the segment classifications presented for the year to 30 June 2010 as per the annual report for that period. RECONCILIATION OF HEADLINE EARNINGS Unaudited six Unaudited six
months ended months ended R`000 31/12/10 31/12/09 Profit attributable to owners of the company 48 748 45 381 Headline earnings adjustments: Impairment of property, plant and equipment - - Profit on disposal of property, plant and equipment (9) (12) Headline earnings 48 739 45 369 Audited % year ended R`000 change 30/06/10 Profit attributable to owners of the company 7.4 77 557 Headline earnings adjustments: Impairment of property, plant and equipment 7 994 Profit on disposal of property, plant and equipment (484) Headline earnings 7.4 85 067 SUPPLEMENTARY INFORMATION Unaudited six Unaudited six months ended months ended
31/12/10 31/12/09 Shares in issue (000`s) (note 2) 87 865 87 865 Weighted average number of shares in issue (000`s) 87 865 87 865 Diluted weighted average number of shares in issue (000`s) 88 166 89 929 Headline earnings per share (cents) 55.47 51.65 Diluted headline earnings per share (cents) 55.28 50.46 Net asset value per share (cents) 478.70 463.41 Audited % year ended Change 30/06/10
Shares in issue (000`s) (note 2) 87 865 Weighted average number of shares in issue (000`s) 87 865 Diluted weighted average number of shares in issue (000`s) 89 929 Headline earnings per share (cents) 7.4 96.82 Diluted headline earnings per share (cents) 9.5 94.60 Net asset value per share (cents) 3.3 458.99 NOTES 1. The group`s condensed consolidated interim financial statements have been prepared in accordance with IAS 34 - Interim Financial Reporting. The accounting policies and methods of computation applied in the preparation of these financial statements are in accordance with IFRS and are consistent with those applied in the preparation of the group`s annual financial statements for the year ended 30 June 2010. 2. Shares in issue less shares repurchased by a wholly owned subsidiary company and share incentive special purpose entity. Directors: A Ambor (Executive Chairman), P van Tonder (Managing Director), M Farrelly, K Getz*, D Hyde*, P Joffe, M Kuzwayo*, K Madders MBE* (British), M Morojele*, K Robertson, R van Dijk. (*non-executive) Company secretary: R van Dijk 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 Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg, 2001 Sponsor: Sasfin Capital (A division of Sasfin Bank Ltd) www.spurcorporation.co.za 03 March 2011 Date: 03/03/2011 12:00:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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