SPUR CORPORATION LIMITED - Condensed consolidated financial statements and dividend declaration for the year ended 30 June 2018

Release Date: 06/09/2018 09:00
Code(s): SUR
 
Wrap Text
Condensed consolidated financial statements and dividend declaration for the year ended 30 June 2018

Spur Corporation Ltd (registration number 1998/000828/06)
Share code: SUR
ISIN: ZAE000022653
Prepared under the supervision of the  Chief Financial Officer, Phillip Matthee CA(SA)
Spur Corporation Limited  (Registration number: 1998/000828/06)

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND CASH DIVIDEND DECLARATION FOR THE YEAR ENDED 30 JUNE 2018
INDEPENDENTLY REVIEWED

OVERVIEW

RESTAURANT SALES
up 0.6%

COMPARABLE PROFIT BEFORE TAX
down 8.0%

COMPARABLE HEADLINE EARNINGS  PER SHARE
down 9.5%

DIVIDEND PER SHARE
down 6.8% to 123 cents

RESULTS COMMENTARY

TRADING PERFORMANCE 

Spur Corporation produced a resilient performance for the year to June 2018 as the group encountered challenging economic conditions in its major trading markets.

Total franchised restaurant sales across the local and international operations increased by 0.6% to R7.2 billion, and by 1.3% to R7.1 billion excluding the results of
the Captain DoRegos chain which was sold with effect from 1 March 2018.

Excluding Captain DoRegos, franchised restaurant sales in South Africa grew by 1.5%. After declining by 6.0% and 0.1% in the first and second quarters of the
financial year, local restaurant sales increased by 1.4% in the third quarter and grew by a strong 12.2% in the fourth quarter. Political concerns and policy 
uncertainty have resulted in weak economic growth, a volatile exchange rate, rising unemployment, increased pressure on consumers’ disposable income and low 
levels of consumer confidence.

The stronger restaurant sales growth in the second half can be attributed to the increased focus across the group on product quality, service and innovation, rather
than any improvement in consumer spending. Discretionary spend is under growing pressure which is contributing to a continuing decline in restaurant and shopping
centre foot traffic.

The flagship Spur Steak Ranches brand, which accounts for almost two thirds of group restaurant sales, continued its recovery in the second half of the financial year
following the damaging social media incident in March 2017. Restaurant sales declined by 9.1% in the first half and 3.2% in the third quarter, but increased by 14.8%
in the fourth quarter, resulting in a 2.8% decrease for the full year.

The decision to end aggressive discounting strategies in Spur from March 2017 has had the expected impact of tempering restaurant sales growth. However, the positive
impact on franchisee margins has improved franchisees' profitability and resulted in a more sustainable franchise business. This has been augmented by a heightened
focus on product quality and enhanced range of "home-made" products manufactured in Spur restaurants, which has been well received by customers.

Spur's brand appeal and loyal base of 1.4 million active Spur Family Card members has been key to maintaining sales momentum. Spur once again won the Sunday Times
Generation Next survey award for the Coolest Place to Eat Out and continues to be the largest digital brand in the retail food sector.

Following the success of the shift in the promotional strategy away from discounting to enhance franchisee profitability in Spur, a similar strategy was implemented in
Panarottis in the second half of the year. This had a negative impact on restaurant turnovers, as expected, but is anticipated to enhance franchisee profitability. 
Nevertheless, Pizza and Pasta, incorporating Panarottis and Casa Bella, grew restaurant sales by 4.2% for the year. The domestic pizza market is highly competitive 
with several major chains following aggressive discounting strategies. Wood-fired pizza ovens have been introduced in selected outlets to enhance product quality 
and save on electricity consumption and will be rolled out to another 25 restaurants in the new year.

RocoMamas continues to be one of the fastest-growing restaurant brands in the local fast casual dining sector. Restaurant sales increased by 31.5% as 15 restaurants
were opened in South Africa, expanding the brand's national presence to 65. The brand's quality and innovation continue to attract strong support from the urban
millennial market.

John Dory's restaurant sales grew by 0.6% with the performance impacted by the temporary closure of two major outlets for shopping mall redevelopment.

The Hussar Grill grew restaurant sales by 24.4%, assisted by the opening of three new restaurants. While the chain's upper-income customer base continues to be more
resilient than the middle-income market, there are signs of increasing pressure on these customers due to the state of the economy.

Franchisee profitability is critical to the sustainability of the business model. While changes in the discounting strategies for Spur and Panarottis were implemented
during the year, management continues to work closely with franchisees to further enhance profitability by managing electricity and water consumption more efficiently,
reviewing labour models, renegotiating rentals and, in certain cases, reducing the size of restaurants. The menu offering in certain brands, including Panarottis and
John Dory's, has also been rationalised to promote efficiencies within restaurants and further support franchisee profitability.

International restaurant sales (excluding Capital DoRegos) increased by 2.7% on a constant exchange rate basis and declined by 0.7% in rand terms. At a constant
exchange rate, restaurant sales in Mauritius (11 (2017: 10) outlets) increased by 18.7%, Africa (38 (2017: 36) outlets) increased by 7.4%, and the Middle East
increased by 146.4% (two outlets which opened during the prior year) while sales in Australasia (11 (2017: 12) outlets) were 16.9% lower due in part to the closure of
two Panarottis outlets during the year.

The Mauritius operation continues to trade well and Africa generally performed in line with expectations, although trading in Kenya and Tanzania was impacted by
political issues, Zambia by the outbreak of cholera in the region and Namibia impacted by tough trading conditions similar to those experienced in South Africa. The
trading environment in Australia, which is a resource-based economy, has been particularly challenging, compounded by high labour costs, which has put pressure on the
franchise model in the country.

RESTAURANT EXPANSION

The group continued its measured expansion programme despite the demanding trading conditions and opened 44 new outlets across all brands, excluding Captain DoRegos,
in South Africa. In addition to the 43 Captain DoRegos outlets sold, 18 restaurants were closed, bringing the local restaurant base to 513. A further 10 outlets
were revamped and four relocated to better trading locations.

Eleven international outlets were opened, including the first RocoMamas in Australia in June 2018. Other restaurants were opened in Nigeria (Spur and Panarottis),
Mauritius (two Panarottis and Spur Grill & Go), Kenya (RocoMamas), Namibia (Panarottis and John Dory's), Swaziland (Spur) and Zimbabwe (RocoMamas). Nine international
restaurants were closed during the period, in addition to three Captain DoRegos outlets disposed of.

Franchisees invested over R219.6 million in new and revamped restaurants during the year.

Restaurant footprint at 30 June 2018
Franchise brand                       South Africa  International  Total

Spur Steak Ranches                             284             37    321
Panarottis Pizza Pasta                          84             12     96
RocoMamas                                       65              7     72
John Dory's Fish Grill Sushi                    49              3     52
The Hussar Grill                                17              1     18
Casa Bella                                       8              -      8
Spur Grill & Go                                  6              2      8
Total                                          513             62    575

FINANCIAL PERFORMANCE

Revenue from continuing operations increased by 3.0% to R667.2 million. Revenue was impacted by fee concessions being granted to assist several franchisees in the
aftermath of the Spur social media incident, but the level of financial assistance has steadily reduced during the year.

Franchise revenue in Spur declined by 3.2% and increased in Pizza and Pasta by 2.6%, John Dory's 2.0%, The Hussar Grill by 33.6% and RocoMamas by 37.8%.

Local retail revenue, representing the group's interests in four The Hussar Grill restaurants and one RocoMamas outlet, increased by 9.4%.

The manufacturing and distribution division grew revenue by 2.4%, negatively impacted by the lower restaurant foot traffic and reduced volumes as an increasing
proportion of products are now being made in the restaurants.

Margins came under pressure across all divisions in South Africa, with the exception of RocoMamas, as operational costs (mainly employment costs) increased ahead of
revenue growth. Margins in the manufacturing facility declined slightly due to higher input costs which were not passed on to franchisees. The overall margin of the
manufacturing and distribution division was further impacted by lower volumes through the group's outsourced distribution system.

Profitability in Australia was negatively impacted by lower revenue, impairments on loan receivables to franchisees, costs related to establishing the RocoMamas
business in Australia and the opening of the first RocoMamas outlet in the country. The international business benefited from initial licence fees received in Cyprus
and India in advance of opening in these countries. Mauritius and the Middle East performed well although operating profit in Africa was static owing to the high cost
of servicing these operations and weaker local currencies impacted revenue growth.

Profit before income tax from continuing operations increased by 9.8% to R231.4 million. This includes a profit on the disposal of the Braviz rib manufacturing
facility of R17.5 million (2017: impairment loss of R44.2 million), a profit on the disposal of the Captain DoRegos business of R4.8 million (2017: impairment loss of
R6.8 million), a net charge of R4.2 million (2017: R3.0 million) related to the long-term share-linked employee retention and incentive schemes, a fair value loss of
R12.7 million (2017: R0.8 million) relating to the RocoMamas contingent consideration liability, Australian franchisee loan impairment losses of R7.2 million, costs
and losses associated with the establishment of RocoMamas in Australia of R4.1 million, and other one-off and exceptional items in the current and previous comparable
periods.

Comparable profit before income tax from continuing operations, excluding exceptional and one-off items (including those listed above), decreased by 8.0%.

Headline earnings increased by 14.8% to R153.7 million and headline earnings from continuing operations grew by 13.8% to R153.7 million. Headline earnings on a
comparable basis decreased by 9.7%.

Diluted headline earnings per share from continuing operations increased by 14.0% to 160.5 cents.

A final dividend of 60 cents per share (2017: 61 cents) has been declared, bringing the total dividend to 123 cents per share (2017: 132 cents).

PROSPECTS

In an environment of increasing financial pressure on the group's middle-income customer base, with little relief expected in the short to medium term, the group's
focus will remain on product quality, value, customer experience and innovation to retain and grow the customer base and ensure that the franchise model is
sustainable.

The group plans to increase market share by capitalising on the growing delivery opportunity through services including Uber Eats and Mr Delivery as well as "call and
collect". These services are becoming increasingly popular across all brands.

Management recognises the increasing role of digital technology in customers' social and purchasing behaviour and will, as a result, be launching new e-commerce apps
in the year ahead which will cater for payment facilities linked to loyalty, earning and redeeming of loyalty benefits, e-gifting, links to delivery services and
product promotions.

The restaurant footprint in South Africa will be expanded with the opening of at least 29 restaurants across Spur Steak Ranches (five), Panarottis (four), John Dory's
(six), RocoMamas (eight), The Hussar Grill (three), Casa Bella (two), and Spur Grill & Go (one).

The group aims to open at least 14 international restaurants in the year ahead. The expansion will focus mainly on Africa where new outlets will be opened in Zambia
(eight), Namibia (two) and Botswana (one). The group's first restaurant will be opened in India (RocoMamas) with a further two outlets planned for Saudi Arabia
(RocoMamas and The Hussar Grill). The group is also in advanced negotiations to expand into Cyprus (RocoMamas) and Pakistan (Spur) where potential sites are 
currently being assessed.

Based on the performance of the operations in Australia and the related impairments, the group is re-evaluating the business model in that territory with the aim of
implementing technology solutions to reduce labour costs while actively engaging with landlords and franchisees to reduce restaurant sizes to ensure the sustainability
of the business.

After the financial year-end the group expanded its restaurant portfolio with the acquisition of a 51% shareholding in Nikos Coalgrill Greek, effective from 1 August
2018. Spur Corporation has an option to acquire an additional 19% shareholding after three years. Nikos currently operates six franchised restaurants and four new
outlets are confirmed to open in the year ahead. Management believes the brand has the potential to expand to around 50 restaurants nationally in the medium term.

CASH DIVIDEND

Shareholders are advised that the board of directors of the company has, on Wednesday, 5 September 2018, resolved to declare a final gross cash dividend for the year
to 30 June 2018 of R65.089 million, which equates to 60 cents per share for each of the 108 480 926 shares in issue, subject to the applicable tax levied in terms of
the Income Tax Act (Act No. 58 of 1962), as amended (dividend withholding tax) of 20%.

The dividend has been declared from income reserves. The net dividend is 48 cents per share for shareholders liable to pay dividend withholding tax. The company's
income tax reference number is 9695015033. The company has 108 480 926 shares in issue at the date of declaration.

In accordance with the provisions of Strate, the electronic settlement and custody system used by the JSE Ltd, the relevant dates for the dividend are as follows:

Event                                                          Date

Last day to trade 'cum dividend'         Tuesday, 25 September 2018
Shares commence trading 'ex dividend'  Wednesday, 26 September 2018
Record date                               Friday, 28 September 2018
Payment date                                 Monday, 1 October 2018

Those shareholders of the company who are recorded in the company's register as at the record date will be entitled to the dividend.

Share certificates may not be dematerialised or rematerialised between Wednesday, 26 September 2018 and Friday, 28 September 2018, both days inclusive.

For and on behalf of the board

A Ambor                   P van Tonder
Executive Chairman        Group Chief Executive Officer

6 September 2018

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME

                                                                                                          Reviewed  Audited year       
                                                                                                        year ended         ended             %
R'000                                                                                                 30 June 2018  30 June 2017        change
Continuing operations
Revenue                                                                                                    667 192       648 016           3.0
Gross profit                                                                                               473 194       469 336           0.8
Operating profit before finance income                                                                     201 892       174 145          15.9
Interest income                                                                                             31 322        36 606
Interest expense                                                                                               (33)          (84)
Share of (loss)/profit of equity-accounted investee (net of income tax)                                     (1 813)           24
Profit before income tax                                                                                   231 368       210 691           9.8
Income tax expense                                                                                         (68 159)      (76 676)
Profit from continuing operations                                                                          163 209       134 015          21.8
Discontinued operation
Profit from discontinued operation, net of tax (refer note 3)                                                    -         4 084
Profit                                                                                                     163 209       138 099          18.2
Other comprehensive income#:                                                                                 3 773        (4 462)
Foreign currency translation differences for foreign operations                                              3 957        (4 473)
Foreign exchange (loss)/gain on net investments in foreign operations                                         (184)           11

Total comprehensive income                                                                                 166 982       133 637          25.0

Profit attributable to:
 Owners of the company                                                                                     158 519       134 143          18.2
 Non-controlling interests                                                                                   4 690         3 956
Profit                                                                                                     163 209       138 099          18.2

Total comprehensive income attributable to:
Owners of the company                                                                                      162 292       129 681          25.1
Non-controlling interests                                                                                    4 690         3 956
Total comprehensive income                                                                                 166 982       133 637          25.0

#  All items included in other comprehensive income are items that are, or may be, reclassified to 
   profit or loss, and are net of income tax.

Earnings per share (cents)
Basic earnings                                                                                              165.85        139.98          18.5
Diluted earnings                                                                                            165.54        139.82          18.4

Earnings per share (cents) - continuing operations
Basic earnings                                                                                              165.85        135.60          22.3
Diluted earnings                                                                                            165.54        135.44          22.2


CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                                                                                                        Reviewed       Audited
                                                                                                                           as at         as at
R'000                                                                                                               30 June 2018  30 June 2017
ASSETS
Non-current assets                                                                                                       605 752       579 085
Property, plant and equipment                                                                                            101 094       100 319
Intangible assets and goodwill                                                                                           362 709       362 101
Interest in equity-accounted investee (refer note 4.2)                                                                     3 461             -
Loans receivable                                                                                                         132 816       110 730
Deferred tax                                                                                                               1 736         1 450
Leasing rights                                                                                                             3 936         4 485

Current assets                                                                                                           424 734       412 084
Inventories                                                                                                               15 702        12 731
Tax receivable                                                                                                            36 197        41 479
Trade and other receivables                                                                                               99 997        72 836
Loans receivable                                                                                                          12 943        19 085
Cash and cash equivalents                                                                                                259 895       265 953

TOTAL ASSETS                                                                                                           1 030 486       991 169

EQUITY
Total equity                                                                                                             877 961       837 176
Ordinary share capital                                                                                                         1             1
Share premium                                                                                                            294 663       294 663
Shares repurchased by subsidiaries                                                                                      (107 202)     (102 956)
Foreign currency translation reserve                                                                                      30 022        26 249
Share-based payments reserve                                                                                               3 731         1 812
Retained earnings                                                                                                        645 827       605 388
Total equity attributable to owners of the company                                                                       867 042       825 157
Non-controlling interests                                                                                                 10 919        12 019

LIABILITIES
Non-current liabilities                                                                                                   65 667        63 600
Operating lease liability                                                                                                  3 919         2 676
Deferred tax                                                                                                              61 748        60 924

Current liabilities                                                                                                       86 858        90 393
Bank overdrafts                                                                                                                -         4 491
Tax payable                                                                                                                1 067           880
Trade and other payables                                                                                                  74 438        60 313
Loans payable                                                                                                             10 722         6 912
Contingent consideration liability (refer note 6)                                                                              -         5 797
Employee benefits (refer note 7.1)                                                                                             -           885
Derivative financial liability (refer note 7.1)                                                                                -        10 572
Shareholders for dividend                                                                                                    631           543

TOTAL EQUITY AND LIABILITIES                                                                                           1 030 486       991 169


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                                                            Ordinary       
                                                                                       share capital  
                                                                                           and share     
                                                                                             premium      Retained
                                                                                             (net of  earnings and          Non-
                                                                                            treasury         other   controlling
R'000                                                                                         shares      reserves     interests         Total
Balance at 1 July 2016 (audited)                                                             196 701       653 592        14 370       864 663

Total comprehensive income for the year                                                            -       129 681         3 956       133 637
Profit for the year                                                                                -       134 143         3 956       138 099
Other comprehensive income                                                                         -        (4 462)            -        (4 462)

Transactions with owners, recorded directly in equity
Contributions by and distributions to owners                                                  (4 993)     (137 693)       (3 880)     (146 566)
Equity-settled share-based payment (refer note 7.2)                                                -         1 168             -         1 168
Indirect costs arising on intra-group sale of shares related 
to equity-settled share-based payment (refer note 7.2)                                             -          (860)            -          (860)
Own shares acquired                                                                           (4 993)            -             -        (4 993)
Dividends                                                                                          -      (138 001)       (3 880)     (141 881)

Changes in ownership interests in subsidiaries                                                     -       (12 131)       (2 427)      (14 558)
Acquisition of non-controlling interest in subsidiary without 
a change in control (refer notes 6 and 10)                                                         -       (12 131)       (2 427)      (14 558)

Total transactions with owners                                                                (4 993)     (149 824)       (6 307)     (161 124)

Balance at 30 June 2017 (audited)                                                            191 708       633 449        12 019       837 176

Total comprehensive income  for the year                                                           -       162 292         4 690       166 982
Profit for the year                                                                                -       158 519         4 690       163 209
Other comprehensive income                                                                         -         3 773             -         3 773

Transactions with owners recorded directly in equity
Contributions by and distributions to owners                                                  (4 246)     (116 161)       (5 790)     (126 197)
Equity-settled share-based payment (refer note 7.2)                                                -         2 387             -         2 387
Own shares acquired                                                                           (4 246)            -             -        (4 246)
Dividends                                                                                          -      (118 548)       (5 790)     (124 338)

Balance at 30 June 2018 (reviewed)                                                           187 462       679 580        10 919       877 961


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                                                                        Reviewed       Audited
                                                                                                                      year ended    year ended
R'000                                                                                                               30 June 2018  30 June 2017
Operating profit before working capital changes (refer note a)                                                           224 787       236 229
Working capital changes                                                                                                  (27 560)       (1 515)
Cash generated from operations                                                                                           197 227       234 714
Interest income received                                                                                                  22 570        25 201
Interest expense paid                                                                                                        (33)          (84)
Tax paid                                                                                                                 (60 646)      (85 303)
Dividends paid                                                                                                          (124 250)     (141 809)

Net cash flow from operating activities                                                                                   34 868        32 719

Cash flow from investing activities
Additions of intangible assets                                                                                            (1 924)       (3 760)
Additions of property, plant and equipment                                                                               (10 291)      (13 692)
Cash outflow from share-based payment hedge (refer note 7.1)                                                             (13 740)       (7 405)
Disposals of UK subsidiaries (refer note 3)                                                                                    -        (1 358)
Loans advanced to franchisees                                                                                            (11 188)       (7 318)
Loan repaid by associate company                                                                                               -         3 000
Proceeds from disposal of associate (refer note 4.1)                                                                      17 500             -
Proceeds from disposal of property, plant and equipment                                                                      302           347
Repayment of loans receivable                                                                                             11 160        11 409
Acquisition of investment in associate (refer note 4.2)                                                                   (5 274)            -
Net cash flow from investing activities                                                                                  (13 455)      (18 777)

Cash flow from financing activities
Acquisition of non-controlling interest without a change in control (refer note 6)                                             -       (14 035)
Acquisition of treasury shares                                                                                            (4 246)       (4 993)
Loan repaid to non-controlling shareholders                                                                                    -          (380)
Settlement of contingent consideration (refer note 6)                                                                    (18 542)      (18 271)
Net cash flow from financing activities                                                                                  (22 788)      (37 679)

Net movement in cash and cash equivalents                                                                                 (1 375)      (23 737)
Effect of foreign exchange fluctuations                                                                                     (192)         (228)
Net cash and cash equivalents at beginning of year                                                                       261 462       285 427
Net cash and cash equivalents at end of year                                                                             259 895       261 462

Refer note 3 for cash flows attributable to discontinued operation.

Notes
a)  Operating profit before working capital changes - Includes a gross cash outflow of Rnil  (2017: R3.130 million) in respect of the settlement of 
    the cash-settled share appreciation rights granted in terms of the group's long-term share-linked employee retention scheme (also refer note 7.1).

Total depreciation and amortisation included in profit before income tax for the year is R10.687 million (2017: R10.538 million).

RECONCILIATION OF HEADLINE EARNINGS
                                                                                                          Reviewed       Audited          
                                                                                                        year ended    year ended             %
R'000                                                                                                 30 June 2018  30 June 2017        change
Total group
Profit attributable to owners of the company                                                               158 519       134 143          18.2
Headline earnings adjustments:
 Impairment of intangible assets (refer note 5)                                                                  -         6 778
 Loss on disposal of property, plant and equipment                                                               -             5
 Loss on disposal of subsidiary (refer note 3)                                                                   -            12
 Profit on disposal of intangible assets (refer note 5)                                                     (4 750)            -
 Profit on disposal of property, plant and equipment                                                          (156)         (167)
 Profit on disposal of subsidiaries (refer note 3)                                                               -        (5 435)
 Income tax impact of above adjustments                                                                         44        (1 472)
 Amount of above adjustments attributable to non-controlling interests                                          (1)           (1)

Headline earnings                                                                                          153 656       133 863          14.8

Continuing operations
Profit attributable to owners of the company                                                               158 519       134 143          18.2
Exclude: Profit from discontinued operation (refer note 3)                                                       -        (4 205)
Profit attributable to owners of the company - continuing operations                                       158 519       129 938          22.0
Headline earnings adjustments:
 Impairment of intangible assets (refer note 5)                                                                  -         6 778
 Loss on disposal of property, plant and equipment                                                               -             5
 Profit on disposal of intangible assets (refer note 5)                                                     (4 750)            -
 Profit on disposal of property, plant and equipment                                                          (156)         (167)
 Income tax impact of above adjustments                                                                         44        (1 472)
 Amount of above adjustments attributable to non-controlling interests                                          (1)           (1)

Headline earnings - continuing operations                                                                  153 656       135 081          13.8


OPERATING SEGMENT INFORMATION
                                                                                                          Reviewed      Audited           
                                                                                                        year ended    year ended             %
R'000                                                                                                 30 June 2018  30 June 2017        change
External revenue
Manufacturing and distribution                                                                             186 224       181 834           2.4
Franchise - Spur                                                                                           211 018       217 918          (3.2)
Franchise - Pizza and Pasta                                                                                 36 388        35 471           2.6
Franchise - John Dory's                                                                                     20 096        19 699           2.0
Franchise - Captain DoRegos                                                                                  1 924         2 812         (31.6)
Franchise - The Hussar Grill                                                                                 6 324         4 733          33.6
Franchise - RocoMamas                                                                                       32 817        23 809          37.8
Retail (refer note b)                                                                                       69 534        63 569           9.4
Other South Africa (refer note c)                                                                           67 852        62 851           8.0
Total South African segments                                                                               632 177       612 696           3.2
Unallocated - South Africa                                                                                   2 552         3 269         (21.9)
Total South Africa                                                                                         634 729       615 965           3.0

United Kingdom (refer note 3) (discontinued)                                                                     -             -
Australasia                                                                                                  6 547         9 870         (33.7)
Other International (refer note f)                                                                          25 916        22 181          16.8
Total International                                                                                         32 463        32 051           1.3

TOTAL EXTERNAL REVENUE                                                                                     667 192       648 016           3.0

Profit/(loss) before income tax
Manufacturing and distribution                                                                              61 050        66 243          (7.8)
Franchise - Spur                                                                                           176 481       188 047          (6.2)
Franchise - Pizza and Pasta                                                                                 22 189        22 967          (3.4)
Franchise - John Dory's                                                                                      9 491         9 715          (2.3)
Franchise - Captain DoRegos (refer note a)                                                                   4 002        (8 040)        149.8
Franchise - The Hussar Grill                                                                                 4 871         4 092          19.0
Franchise - RocoMamas                                                                                       22 988        16 457          39.7
Retail (refer note b)                                                                                        6 785         4 633          46.4
Other South Africa (refer note c)                                                                           (4 953)       (3 188)        (55.4)
Total South African segments                                                                               302 904       300 926           0.7
Unallocated - South Africa (refer note d)                                                                  (65 352)      (93 794)         30.3
Total South Africa                                                                                         237 552       207 132          14.7

United Kingdom (refer note 3) (discontinued)                                                                     -         4 084
Australasia (refer note e)                                                                                 (10 993)         (111)
Other International (refer note f)                                                                          13 114         8 991          45.9
Total International segments                                                                                 2 121        12 964         (83.6)
Unallocated - International (refer note g)                                                                  (6 492)       (5 345)        (21.5)
Total International                                                                                         (4 371)        7 619        (157.4)

PROFIT BEFORE INCOME TAX AND SHARE OF PROFIT OF EQUITY-ACCOUNTED INVESTEE                                  233 181       214 751           8.6

Share of (loss)/profit of equity-accounted investee (net of income tax) (refer note 4.2)                    (1 813)           24

PROFIT BEFORE INCOME TAX                                                                                   231 368       214 775           7.7

Notes to the segment report

a)  Captain DoRegos - Includes a profit on sale of the trademark of R4.750 million. In the prior year this trademark was impaired and an impairment loss 
    of R6.778 million was included. The prior year includes a bad debt of R0.986 million in respect of a loan advanced to the Captain DoRegos Marketing Fund 
    which was forgiven during that year (refer note 5).
b)  Retail - This segment comprises the group's interests in local restaurants consisting of four The Hussar Grill restaurants and one RocoMamas outlet.
c)  Other South Africa - Other local segments include the group's training division, export business, decor manufacturing business, call centre and radio station
    which are each individually not material.
d)  Unallocated - South Africa - Includes:
                                                                                                                        Reviewed       Audited
                                                                                                                      year ended    year ended
R'000                                                                                                         Note  30 June 2018  30 June 2017
Net finance income                                                                                                        30 537        35 788
Includes: interest income on loans receivable from Braviz                                                      4.1             -         4 283
Profit on disposal of Braviz funding instruments                                                               4.1        17 500             -
Impairment loss on Braviz funding instruments                                                                  4.1             -       (44 192)
Cash-settled share-based payment credit                                                                        7.1           885         3 795
Fair value loss on related economic hedge                                                                      7.1        (3 168)       (5 791)
Equity-settled share-based payment charge                                                                      7.2        (1 919)         (985)
RocoMamas contingent consideration fair value loss                                                               6       (12 745)         (777)
Loss incurred by Spur Foundation Trust, all of which is attributable to non-controlling interests                           (907)       (1 206)

e)  Australasia - Includes an impairment loss of R6.753 million (2017: Rnil) relating to loans granted to Australian franchisees, relocation expenses 
    of R0.477 million incurred on behalf of a franchisee, and R2.253 million relating to travel, legal, marketing and pre-opening costs for the establishment 
    of the RocoMamas Australia business and first RocoMamas restaurant in Australia (refer note 4.2).
f)  Other International - Other international segments comprise the group's franchise operations in Africa (outside of South Africa), Mauritius, the Middle East,
    India, Pakistan and Cyprus.
g)  Unallocated - International - Includes a foreign exchange loss of R0.357 million (2017: R0.716 million).


SHARE INFORMATION
                                                                                                          Reviewed       Audited       
                                                                                                        year ended    year ended             %
                                                                                                      30 June 2018  30 June 2017        change
Total shares in issue (000's)                                                                              108 481       108 481           0.0
Net shares in issue (000's)*                                                                                95 509        95 669          (0.2)
Weighted average number of shares in issue (000's)                                                          95 580        95 828          (0.3)
Diluted weighted average number of shares  in issue (000's)                                                 95 761        95 938          (0.2)
Headline earnings per share (cents)                                                                         160.76        139.69          15.1
Diluted headline earnings per share (cents)                                                                 160.46        139.53          15.0
Headline earnings per share (cents) - continuing operations                                                 160.76        140.96          14.0
Diluted headline earnings per share (cents) - continuing operations                                         160.46        140.80          14.0
Net asset value per share (cents)                                                                           919.24        875.08           5.0
Dividend per share (cents)#                                                                                 123.00        132.00          (6.8)

Reconciliation of weighted average number of shares in issue ('000)
Gross shares in issue at the beginning of the year                                                         108 481       108 481
Shares repurchased at the beginning of the year                                                            (12 812)      (12 647)
Shares repurchased during the year weighted for period held by the group                                       (89)           (6)
Weighted average number of shares in issue for the period                                                   95 580        95 828
Dilutive potential ordinary shares weighted for period outstanding (refer note 7.2)                            181           110
Diluted weighted average number of shares in issue for the year                                             95 761        95 938

*  108 480 926 total shares in issue less 6 196 901 (2017: 6 136 901) shares repurchased by wholly-owned subsidiary companies, 6 374 698 (2017: 6 374 698) shares
   held by The Spur Management Share Trust (consolidated structured entity) and 400 000 (2017: 300 000) shares held by The Spur Foundation Trust (consolidated 
   structured entity).
#  refers to interim and final dividend declared for the respective year.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

1  BASIS OF PREPARATION
   The condensed consolidated financial statements have been prepared in accordance with the JSE Ltd Listings Requirements for provisional reports and the 
   requirements of the Companies Act of South Africa. The Listings Requirements require provisional reports to be prepared in accordance with the framework 
   concepts and the measurement and recognition requirements of International Financial Reporting Standards ("IFRS") and the SAICA Financial Reporting Guides 
   as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and to also, as a minimum, 
   contain the information required by IAS 34 - Interim Financial Reporting. The accounting policies applied in the preparation of the condensed consolidated 
   financial statements are in terms of IFRS and are consistent with those applied in the previous consolidated annual financial statements.

2  REVIEW REPORT
   These condensed consolidated financial statements for the year ended 30 June 2018 have been reviewed by Spur Corporation's independent auditors, KPMG Inc., 
   who expressed an unmodified review conclusion. The auditor's report covers the condensed consolidated statement of profit or loss and other comprehensive 
   income, condensed consolidated statement of financial position, condensed consolidated statement of cash flows, condensed consolidated statement of changes 
   in equity, operating segment report and notes to the condensed consolidated financial statements. Shareholders are therefore advised that in order to obtain 
   a full understanding of the nature of the auditor's engagement, they should obtain a copy of the auditor's report together with the accompanying financial 
   information from the issuer's registered office, which can be obtained at no cost by appointment with the company secretary at the company's registered office.

3  DISCONTINUED OPERATION (UNITED KINGDOM) 
   By 30 June 2016, all operations in the UK and Ireland, representing a separate major line of business (and comprising a separate operating segment) of the group, 
   had ceased trading. The results of the segment are reported separately to continuing operations.

   During the prior year, the group disposed of, or commenced with voluntary liquidation proceedings of, its remaining UK subsidiaries, with the exception of Spur
   Corporation UK Ltd, effectively disposing of all remaining liabilities and cash balances for no consideration. The board has obtained legal opinion that the 
   likelihood of there being any recourse by creditors or the liquidator against the group to settle any creditors' claims arising from the liquidation, is remote. 
   The impact of the above disposals was as follows:
                                                                                                             Audited year ended 30 June 2017
                                                                                                         Profit on       Loss on      
                                                                                                       disposal of   disposal of
R'000                                                                                                 subsidiaries    subsidiary         Total
Net (liabilities)/assets disposed of                                                                        (5 435)           12        (5 423)
 Cash and cash equivalents                                                                                   1 339            19         1 358
 Trade and other payables                                                                                   (6 774)           (7)       (6 781)

Profit/(loss) on disposal                                                                                    5 435           (12)        5 423
Proceeds on disposal                                                                                             -             -             -

The results of the discontinued operation are illustrated below:
                                                                                                                        Reviewed       Audited
                                                                                                                      year ended    year ended
R'000                                                                                                               30 June 2018  30 June 2017
Revenue                                                                                                                        -             -
Gross profit                                                                                                                   -             -

Operating profit before finance income                                                                                         -         4 084
Profit before income tax                                                                                                       -         4 084
Profit for the year                                                                                                            -         4 084

Profit attributable to owners of the company                                                                                   -         4 205
Non-controlling interests                                                                                                      -          (121)
Profit for the year                                                                                                            -         4 084

The cash flows of the discontinued operation are listed below:
Net cash flow from operating activities                                                                                        -        (3 135)
Net cash flow from investing activities                                                                                        -        (1 525)
Net cash flow from financing activities                                                                                        -          (380)
Net movement in cash and cash equivalents for the year                                                                         -        (5 040)

4  INVESTMENT IN ASSOCIATE
4.1 Braviz Fine Foods
   In March 2014, the group acquired a 30% interest in Braviz Fine Foods (Pty) Ltd ("Braviz"), a start-up operation which established a rib processing plant in
   Johannesburg. The initial purchase consideration amounted to R0.4 million (comprising ordinary shares of R300 and initial transaction costs of R0.4 million).

   The group simultaneously advanced a loan in the amount of R36.250 million to the entity. In addition, a further short-term bridging finance loan of R10.000 
   million was advanced to the associate during the 2016 financial year. The bridging finance loan was repayable by 30 June 2017, but the counterparty failed 
   to repay the loan. Following various breaches of the terms of the respective loan agreements referred to above by the associate, and taking cognisance of 
   the associate's financial performance, which had been impacted by reduced demand following a decline in the local economy, increased competition and aggressive 
   pricing, the board considered the full extent of the receivables, amounting to R44.192 million at 30 June 2017, to be impaired. An impairment loss of this 
   amount was consequently recognised in profit before income tax for the prior year. The group's share of equity-accounted profit after income tax of the 
   associate amounted to R0.024 million for the prior year. No equity-accounted profits or losses of the associate have been recognised subsequent to 30 June 2017 
   as a result of the impairment referred to above.

   With effect from 6 November 2017, the group concluded an agreement to sell its equity interest and loan claims with Braviz to the existing Braviz shareholders 
   for the sum of R17.500 million. This was received in cash in March 2018. A profit of R17.500 million on the disposal of the loan claims has been recognised 
   in profit before income tax. The transaction results in a tax credit of R3.257 million which is included in the income tax expense.

   An analysis of the receivables as at the prior year reporting date is detailed as follows:
                                                                                                                                 Audited as at
R'000                                                                                                                             30 June 2017
Gross carrying value of receivable (included in loans receivable in statement of financial position) 
 considered part of net investment in equity-accounted investee for
 the purposes of recognising losses in excess of the carrying value of the investment in associate                                      47 745
 Cumulative share of losses of equity-accounted investee previously recognised                                                         (10 189)
Net receivable considered part of the net investment in equity-accounted investee                                                       37 556
Impairment recognised in terms of IAS 39                                                                                               (37 556)
Carrying value at end of year                                                                                                                -

Gross carrying value of further short-term loan advanced  to equity-accounted investee                                                   6 636
Impairment recognised in terms of IAS 39                                                                                                (6 636)
Carrying value at end of year                                                                                                                -

4.2 RocoMamas Australia
   With effect from 1 July 2017, the group acquired 45% of the issued share capital in RocoMamas Restaurants Australia Pty Ltd ("RRA"), a newly incorporated 
   company incorporated and domiciled in Australia for a nominal consideration. During the course of the year, the group advanced amounts of AU$517 500 
   (the equivalent of R5.274 million) in aggregate to RRA on loan account, where such advances were for the purposes of capitalising the entity and in respect of 
   which settlement is neither planned nor likely to happen in the foreseeable future. During the year, RRA established two wholly-owned subsidiaries, RocoMamas 
   Franchise Company Australia Pty Ltd ("RFCA"), and RocoMamas Chapel Pty Ltd ("RMC"), both companies also incorporated and domiciled in Australia. The purpose 
   of the investment in RRA was to establish a partnership with entrepreneurs having industry expertise in Australia to launch the RocoMamas brand in that country. 
   To this end, subsidiaries in the group granted RFCA a master franchise agreement, in terms of which RFCA was granted rights to exploit the RocoMamas trademarks 
   and related intellectual property in Australasia. RRA furthermore provided finance to RMC to build the first RocoMamas restaurant in Australia, trading in 
   Melbourne, which commenced trading in June 2018.

The carrying value of the investment in the equity-accounted investees is detailed as follows:
                                                                                                                                      Reviewed
                                                                                                                                         as at
R'000                                                                                                                             30 June 2018
Investment in investee (equity and loan funding)                                                                                         5 274
Share of loss of equity-accounted investee (net of income tax)                                                                          (1 813)
Carrying value of equity-accounted investees at end of year                                                                              3 461

The loss in the current year relates to costs incurred to establish the entities concerned, refine the intellectual property for the brand in the country 
and pre- opening costs associated with the new restaurant.

5  IMPAIRMENT AND SUBSEQUENT DISPOSAL OF CAPTAIN DOREGOS     
   Following an impairment test conducted at 30 June 2017 on the Captain DoRegos cash-generating unit, the directors determined that the recoverable amount 
   of the cash-generating unit (comprising predominantly the trademark and related intellectual property intangible assets with indefinite useful lives) 
   was estimated to be negligible. The full carrying amount of the assets attributable to the cash-generating unit at 30 June 2017 were therefore impaired, 
   resulting in a loss of R6.778 million (attributable to the intangible assets) being included in profit before income tax for the prior year. A corresponding 
   deferred tax credit of R1.518 million was recognised in profit, resulting in a net loss included in profit attributable to ordinary shareholders of 
   R5.260 million for the prior year. In addition, the group had previously advanced a loan to the Captain DoRegos Marketing Fund to finance the purchase of new 
   signage at selected stores. In the interests of making available sufficient funds for marketing activities to ensure the sustainability of the brand, the 
   group forgave the loan as at 30 June 2017. Consequently, a bad debt of R0.986 million was recognised in profit before income tax for the prior year.

   During the current year, the group concluded an agreement to dispose of the Captain DoRegos business, comprising largely the trademarks and related 
   intellectual property previously impaired as referred to above, with effect from 1 March 2018, for a consideration of R4.750 million. Of the total 
   consideration, R0.500 million was paid on the effective date, R0.250 million was paid on 1 May 2018 and the balance of R4.000 million is payable in 
   equal monthly instalments over 48 months with effect from 1 June 2018. As at the reporting date, the carrying amount of the receivable, included in loans 
   receivable in the consolidated statement of financial position, was R4.042 million. The receivable is secured by a personal guarantee from the purchaser 
   and a trust which holds immovable property. The transaction resulted in a profit on disposal of R4.750 million included in profit before income tax. 
   No income tax is applicable to the sale.

6  ROCOMAMAS CONTINGENT CONSIDERATION      
   With effect from 1 March 2015, the group acquired a 51% interest in RocoMamas Franchise Co (Pty) Ltd ("RocoMamas"), an entity owning the trademarks 
   and related intellectual property of the RocoMamas brand.

   The purchase consideration was determined as five times RocoMamas' profit before income tax of the third year following the date of acquisition, which 
   ended on 28 February 2018. Following an initial payment of R2.000 million on the effective date, annual payments were due on the first, second and third 
   anniversaries of the acquisition date, calculated as five times the profit before income tax of the year immediately preceding the anniversary date, less 
   any aggregate payments already made. Payments of R20.369 million and R18.271 million were made on the first and second anniversaries of the acquisition 
   date respectively and the final payment of R18.542 million was paid in March 2018.

   The total purchase consideration actually paid over the three-year period was R59.182 million, compared to that estimated as at 30 June 2017 of R47.215 million. 
   The increase in the actual consideration relative to that estimated at 30 June 2017 arose principally from restaurant turnovers and related franchise income 
   exceeding budget: the impact of a subdued economy and political instability on restaurant turnovers was less than what had been anticipated as at 30 June 2017. 
   Furthermore, a greater number of new restaurants was opened in the period to February 2018 than was previously anticipated.

The movement in the contingent consideration liability is detailed as follows:

                                                                                                                        Reviewed       Audited
                                                                                                                      year ended    year ended
R'000                                                                                                               30 June 2018  30 June 2017
Balance at beginning of year                                                                                               5 797        23 291
Fair value adjustment recognised in profit before income tax                                                              12 745           777
Payment made                                                                                                             (18 542)      (18 271)
Balance at end of year                                                                                                         -         5 797

 Current portion included in current liabilities                                                                               -         5 797
 Non-current portion included in non-current liabilities                                                                       -             -

   During the prior year, with effect from 1 April 2017, the group acquired a further 19% interest in RocoMamas, increasing the group's equity interest in the 
   entity to 70%. The purchase consideration of R14.035 million was settled in cash on the effective date. The net assets of RocoMamas at 1 April 2017 included 
   in the consolidated financial statements of the group amounted to R16.433 million, of which R8.052 million was attributable to non-controlling interests. 
   The purchase consideration was debited directly to retained earnings in the prior year and the non-controlling interest's share in the net assets of the 
   subsidiary of R3.122 million was similarly reallocated within equity to retained earnings in the prior year.

7  SHARE INCENTIVE SCHEMES      
7.1 Existing cash-settled share appreciation rights scheme
   In December 2017, the fifth (and final) tranche (December 2016: fourth tranche) of share appreciation rights granted in terms of the group's long-term 
   share-linked employee retention scheme vested. Details of the financial impact of the scheme are listed below:

                                                                                                                        Reviewed       Audited
                                                                                                                      year ended    year ended
R'000                                                                                                               30 June 2018  30 June 2017
Gross cash outflow on vesting of cash-settled rights                                                                           -        (3 130)
Gross cash outflow from economic hedging instrument                                                                      (13 410)       (7 600)
(Payment)/refund of difference in guaranteed dividend from hedge counterparty                                               (330)          195
Net cash flow effect                                                                                                     (13 740)      (10 535)

Share-based payment credit                                                                                                   885         3 795
Fair value loss on economic hedging instrument                                                                            (3 168)       (5 791)
Net expense included in profit before income tax                                                                          (2 283)       (1 996)

Further details of the share appreciation rights and related hedges are detailed in notes 24 and 25 respectively on pages 130 and 132 respectively of the annual
integrated report for the year ended 30 June 2017.

7.2 New equity-settled share incentive scheme
   Following the approval by shareholders at the annual general meeting on 4 December 2015 of the Spur Group Forfeitable Share Plan ("FSP") and 
   Spur Group Share Appreciation Rights ("SAR") Scheme, certain awards were granted to certain senior managers and directors during previous financial years, 
   details of which are included in note 21.4 on page 126 of the annual integrated report for the year ended 30 June 2017. No further grants were awarded 
   during the current year.

The financial impact of the incentive schemes is summarised below:
                                                                                                                        Reviewed       Audited
                                                                                                                      year ended    year ended
R'000                                                                                                               30 June 2018  30 June 2017
Share-based payment expense included in profit before income tax                                                           1 919           985
Income tax credit included in profit                                                                                         456           320
Income tax credit included in equity (retained earnings)                                                                     468           183
Capital gains tax arising on intra-group sale of shares charged to equity (retained earnings)                                  -           795
Transaction costs arising on intra-group sale of shares charged to equity (retained earnings)                                  -            65

The forfeitable shares granted resulted in 180 950 (2017: 110 351) dilutive potential ordinary shares for the year. As the performance conditions of the SARs, 
as assessed at the reporting date, had not been met to result in any vesting of the rights, no adjustment has been made to the diluted weighted average number 
of shares in issue in respect of these contingently issuable shares for all years reported.

8  LOAN TO SPUR STEAK RANCHES MARKETING FUND
   The Spur Steak Ranches Marketing Fund, which is managed by the group for and on behalf of the body of Spur Steak Ranches franchisees, is established in 
   terms of the franchise agreements concluded between the group and franchisees, as more fully described in notes 2.1 and 39 on pages 95 and 148 respectively 
   of the annual integrated report for the year ended 30 June 2017.

   The Marketing Fund's main source of income is the marketing contributions received from franchised restaurants which are determined as a percentage of the 
   franchised restaurants' sales. As a consequence of the decline in franchised restaurant sales since March 2017, exacerbated by temporary reductions in the 
   percentage marketing fee charged to certain restaurants in an effort to support the sustainability of these restaurants during the tough trading conditions, 
   the fee income received by the Marketing Fund has reduced significantly. This has resulted in the Marketing Fund not being able to settle its financial 
   obligations in the ordinary course of business.

   During the year, the board approved a loan facility to be made available to the Marketing Fund in the amount of R35.000 million. This was necessary in order 
   to ensure the liquidity and solvency of the wholly-owned subsidiary that manages the Marketing Fund. The facility bears interest at the prime rate of interest 
   and is repayable in 48 equal monthly instalments commencing July 2019. As at the reporting date, the carrying amount of the loan was R25.725 million 
   (comprising R24.000 million capital and R1.725 million in interest). While the loan is eliminated on consolidation, repayment of the intercompany loan and 
   the interest thereon will be funded by future marketing contributions from franchisees. As a result, at the reporting date, there is a net Marketing Fund 
   receivable, comprising the net liabilities and cumulative over-spend of the Marketing Fund, of R14.332 million (2017: R5.362 million). Given that the 
   intercompany loan is only repayable from 1 July 2019, it is not anticipated that the Marketing Fund receivable will reduce before then, and the loan is 
   accordingly classified as a non-current loan receivable (2017: current receivable) in the consolidated statement of financial position.

   The board, management of the Marketing Fund and franchisees have critically reassessed the priorities of the Marketing Fund to curtail marketing expenditure 
   in an orderly and responsible manner, such that the intercompany loan can be repaid with the least negative impact for the brand and franchisees. The board 
   has undertaken to review the terms of the loan facility on a regular basis, and amend these as necessary, to ensure that no creditor is prejudiced.

9  TAX RATE RECONCILIATION    
   Material items that have an impact on the effective rate of income tax are listed below:
                                                                                                                        Reviewed       Audited
                                                                                                                      year ended    year ended
%                                                                                                                   30 June 2018  30 June 2017
South African normal tax rate                                                                                               28.0          28.0
(Non-taxable profit on disposal of Braviz loans)/non-deductible impairment of Braviz loans (refer note 4.1)                 (3.5)          5.8
Non-taxable profit on disposal of Captain DoRegos (refer note 5)                                                            (0.6)            -
Non-taxable profit on disposal of UK subsidiaries (refer note 3)                                                               -          (0.7)
Non-taxable dividend income                                                                                                 (1.0)         (1.1)
Non-deductible fair value adjustment on RocoMamas contingent consideration liability (refer note 6)                          1.5           0.1
Non-deductible loss from associate                                                                                           0.2             -
Non-deductible other expenditure (capital items and items not in the production of income)                                   3.0           1.2
Non-deductible UK depreciation and closure-related costs                                                                       -           0.2
Prior year under provision                                                                                                     -           0.1
Tax losses on which deferred tax not provided                                                                                0.6           0.4
Tax losses utilised on which deferred tax not previously provided                                                           (0.5)         (0.2)
Withholding taxes not recoverable                                                                                            1.6           1.8
Other                                                                                                                        0.2           0.1
Effective rate of tax - group                                                                                               29.5          35.7
Effective rate of tax - continuing operations                                                                               29.5          36.4

10 ROCOMAMAS GREEN POINT (PRIOR YEAR)
   During the prior year, with effect from 1 June 2017, a subsidiary, Opilor (Pty) Ltd (in which the group has a 68% equity interest) sold the business of 
   RocoMamas Green Point to a newly-established entity, Green Point Burger Joint (Pty) Ltd, two thirds of which is owned by wholly-owned subsidiary, 
   Spur Group (Pty) Ltd, and the remaining third by 70%-owned subsidiary, RocoMamas Franchise Co (Pty) Ltd. This resulted in an effective increase in the 
   group's ownership interest in the outlet from 68% to 90% in the prior year. The profit before income tax attributable to the non-controlling shareholder 
   of Opilor (Pty) Ltd, arising from the transaction, of R0.695 million was allocated to non-controlling interests in the prior year, and the tax of 
   R0.523 million arising from the transaction was charged directly to equity (retained earnings) in the prior year.

11 SUBSEQUENT EVENTS       
   Subsequent to the reporting date, but prior to the date of issue of this report, the following significant transactions occurred:

11.1 Dividend
   Subsequent to the reporting date, a dividend of 60 cents per ordinary share in issue, amounting to R65.089 million, was declared by the board on 
   5 September 2018 and is payable on 1 October 2018.

11.2 Purchase of 51% stake in Nikos Coalgrill Greek
   Subsequent to the reporting date, on 1 August 2018, the group acquired 51% of the business of Nikos Coalgrill Greek ("Nikos"). Nikos operated six franchised
   restaurants as at the effective date. The brand offers affordable, quality, artisanal Greek food in a fresh and comforting environment, giving the group 
   exposure to a product offering not previously catered for.

The fair value of net assets acquired at effective date:                                                                                 R'000
Intangible assets                                                                                                                        5 436
Deferred tax                                                                                                                            (1 522)
Fair value of net assets acquired                                                                                                        3 914
Attributable to non-controlling interest                                                                                                (1 918)
Group's share of net assets acquired                                                                                                     1 996
Goodwill                                                                                                                                22 822
Total purchase consideration                                                                                                            24 818
In cash                                                                                                                                  5 000
Contingent consideration                                                                                                                19 818

Net cash flow on acquisition of subsidiary                                                                                              (5 000)

   All of the quantitative analysis included in this note is based on preliminary information and is subject to change pending finalisation of the 
   acquisition date accounting.

   Intangible assets comprise the Nikos trademarks and related intellectual property. The fair value was determined by an independent valuations expert utilising a
   discounted cash flow model based on the relief from royalty method. In this regard:

   - the directors projected anticipated franchise restaurant sales for a forecast horizon of five years applying a reasonable roll-out plan, and basing revenue 
     on historic averages increasing at 8.0% per annum;
   - franchise restaurant sales beyond the forecast horizon were projected to grow at 5.6%,  in line with the local inflation target of the South African Reserve Bank;
   - a "royalty rate" of 5.5% was applied to the projected franchise restaurant sales, where the royalty rate was considered reasonable as the range of royalty rates
     identified by an industry benchmarking exercise yielded a range of between 0.3% and 7.0%; and
   - the resulting "royalty" cash flow, adjusted for income tax of 28%, was discounted at an adjusted weighted average cost of capital of 26.1%.

   Deferred tax was measured by applying the South African tax rate applicable to taxable income to the taxable temporary difference on initial recognition of the
   intangible assets.

   The purchase consideration is determined as five times Nikos' profit before interest, tax, depreciation and amortisation ("EBITDA") of the third year 
   following the date of acquisition. Following an initial payment of R5.000 million on the effective date, annual payments (or refunds as the case may be) are 
   due on the first, second and third anniversaries of the acquisition date, calculated as five times the EBITDA of the year immediately preceding the 
   anniversary date, less any aggregate payments already made. The total purchase consideration over the three-year period was estimated at R37.022 million as at 
   the effective date, the present value of which is R24.818 million. The maximum purchase consideration is theoretically unlimited, although in determining 
   the third year's EBITDA, the revenue of the business will be limited to that attributable to the first 40 restaurants in operation (if applicable). 
   A financial liability measured at fair value of R19.818 million, less the initial payment of R5.000 million at the acquisition date will be recognised in 
   respect of the gross contingent consideration of R37.022 million. In the event that the forecast EBITDA increases by 5% or decreases by 5%, the gross contingent 
   consideration will increase to R35.171 million or decrease to R30.171 million respectively. In terms of IFRS 13, the contingent consideration liability is 
   designated as a level 3 financial instrument in terms of the fair value hierarchy as inputs into the valuation model are not based on observable market data. 
   The fair value is determined based on the expected aggregate purchase consideration payments, discounted to the present value using a risk-adjusted discount 
   rate of 23.68%, being the weighted average cost of capital specific to the acquired business. Had the discount rate increased by 2% or decreased by 2% on the 
   acquisition date, the fair value of the contingent consideration liability would have decreased to R19.133 million or increased to R20.542 million respectively.

   The goodwill is attributable to the growth prospects of the brand (by expanding the chain nationally) that the group is anticipated to realise using its existing
   franchising expertise, infrastructure and extensive network of franchisees. The goodwill is not deductible for tax purposes.

   Transaction costs, comprising legal and due diligence costs, are estimated to amount to R0.301 million and will be included in profit. The costs will not be 
   deductible for tax purposes.

   As the acquired business has only been formally trading since July 2017, had the group acquired the business at 1 July 2017, the impact on the group's revenue and
   profit would not have been material.

12 CONTINGENT LIABILITIES
12.1 Tax on 2004 share incentive scheme
   As reported in note 44.1 on page 159 of the annual integrated report for the year ended 30 June 2017, SARS had previously issued additional assessments to 
   wholly-owned subsidiary, Spur Group (Pty) Ltd ("Spur Group"), in respect of the 2005 to 2012 years of assessment totalling R22.034 million 
   (comprising R13.996 million in additional income tax and R8.038 million in interest). The additional assessments were issued following the disallowance of a 
   deduction claimed in respect of the 2004 share incentive scheme. The total of the additional assessments was paid in previous financial years. Following 
   failed alternative dispute resolution proceedings, the matter was heard in the income tax court in February 2018. The tax court found in favour of Spur Group, 
   but SARS has appealed the ruling. A trial date to hear the appeal has yet to be set. The board, in consultation with its tax advisors, remains confident that 
   the probability of SARS' appeal being successful is low. Consequently, no liability has been raised in respect of the assessments issued to date and the 
   payments made to date are accounted for as prepayments of income tax.

12.2 Legal dispute with former franchisee - Tzaneen, South Africa
   In January 2018, wholly-owned subsidiary, Spur Group, instituted legal action against Magnacorp 544 CC ("Magnacorp"), for outstanding franchise and marketing 
   fees in the amount of R0.078 million. Magnacorp had previously operated a Spur Steak Ranch franchise restaurant in Tzaneen, South Africa, but Spur Group cancelled 
   the franchise agreement after Magnacorp breached the terms of the franchise agreement. Magnacorp has defended the action and alleges that Spur Group repudiated 
   the franchise agreement, in that the cancellation thereof was unlawful. Magnacorp has lodged a counterclaim in the amount of R19.488 million, primarily for loss 
   of profits arising out of the alleged repudiation. Spur Group denies the repudiation of the franchise agreement and maintains that the cancellation was valid. 
   The board is confident that it will be able to defeat Magnacorp's counterclaim and noted an exception to Magnacorp's counterclaim in that, among other things, 
   in terms of the franchise agreement, the franchisor is not liable to the franchisee for any consequential loss, loss of profits or any other form of indirect 
   loss or damages howsoever arising or caused. A court date to hear the matter has yet to be determined. The board, in consultation with its legal advisors, 
   is confident that it will be able to successfully defend this  claim and, consequently, no liability has been raised.

12.3 Other contingent liabilities
   There have been no further changes to the status of other contingent liabilities referred  to in note 44 on page 159 of the annual integrated report for the 
   year ended 30 June 2017.

13 FAIR VALUE OF FINANCIAL INSTRUMENTS
13.1 Forward purchase derivative financial liabilities
   The forward purchase derivative contracts used to economically hedge the impact of the cash-settled share appreciation rights, as detailed in note 7.1, 
   were settled during the year. Consequently, no liability exists at the current year reporting date. For details on fair value measurement applicable to 
   the liabilities recognised at the prior year reporting date, refer to note 25 on page 132 of the annual integrated report for the year ended 30 June 2017.

13.2 Contingent consideration liability
   The liability for the contingent consideration relating to the purchase of RocoMamas, as detailed in note 6 was settled during the year. Consequently, 
   no liability exists at the current year reporting date. For details on fair value measurement applicable to the liability recognised at the prior year 
   reporting date, refer to note 37.2 on page 141 of the annual integrated report for the year ended 30 June 2017.

13.3 Other financial instruments
   The group has not disclosed the fair values of loans receivable, financial assets included in trade and other receivables, cash and cash equivalents, 
   loans payable, bank overdrafts, financial liabilities included in trade and other payables and shareholders for dividend as their carrying amounts are a 
   reasonable approximation of their fair values. In the case of loans receivable and loans payable, the directors consider the terms of the loans 
   (including in particular, the interest rates applicable) to be commensurate with similar financial instruments between unrelated market participants and 
   the carrying values are therefore assumed to approximate their fair values. In the case of financial assets included in trade and other receivables, cash and 
   cash equivalents, bank overdrafts, financial liabilities included in trade and other payables and shareholders for dividend, the durations of the financial 
   instruments are short and it is therefore assumed that the carrying values approximate their fair values.

14 RELATED PARTIES 
   There have been no material changes in the nature or value of the related party transactions reported in note 42 on page 153 of the annual integrated report 
   for the year ended 30 June 2017.

15 ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET EFFECTIVE
   A number of new standards and amendments to standards are effective for the group's financial reporting period beginning after 1 July 2018 and earlier 
   adoption is permitted; however, the group has not early adopted any of these new or amended standards in preparing these condensed consolidated 
   financial statements. The likely impact of the following standards issued, but not yet effective, and which may have a significant impact on the group's 
   consolidated financial statements is listed below:

   IFRS 9 - Financial Instruments
   IFRS 9, published in July 2014, includes guidance on the classification and measurement of financial instruments, including a new expected credit loss model 
   for recalculating impairment on financial assets, and the new general hedge accounting requirements. This standard becomes mandatory for the group's 2019 
   financial statements.

   The group has completed a preliminary assessment of the extent to which the standard may impact on the group's existing financial instruments. As at 30 June 2018,
   there would be no impact on the group's financial statements related to the expected loss impairment model. This model requires anticipated future losses to 
   be taken into consideration when measuring financial instruments at initial recognition and subsequent reporting dates. The group currently adopts the incurred 
   loss model for determining impairment of financial instruments. The expected loss model requires considerable judgement as to how changes in economic factors 
   may affect future losses arising from financial instruments.

   The group plans to adopt IFRS 9 in its financial statements for the year ending 30 June 2019 when the standard becomes mandatory. While it is understood that the
   adoption of IFRS 9 will generally be applied retrospectively, there are certain exemptions permitted by the standard.

   IFRS 15 - Revenue from Contracts with Customers
   IFRS 15 introduces a new five-step model for determining the timing and amount of revenue to be recognised from contracts with customers. The core principle of 
   the new model is that an entity should recognise revenue to depict the transfer of promised goods or services to customers and that the amount of revenue 
   should reflect the consideration to which it expects to be entitled in exchange for those goods and services. This standard becomes mandatory for the group's 
   2019 financial statements, and replaces IAS 18 - Revenue.

   The group has completed an initial assessment of the potential impact of the adoption of the standard on its consolidated financial statements, in terms 
   of which, with the exception of initial franchise fees, no material changes to the method of recognising revenue are anticipated. Initial franchise fees 
   are charged by the group upon signature of the franchise agreements concluded with independent franchisees, and are non-refundable. The franchise agreements 
   oblige the franchisor to undertake activities for the duration of the franchise agreement to support the franchisee's brand that significantly affect the 
   intellectual property to which the franchisee has rights, without resulting in a transfer of specific goods or services. Accordingly, it has been determined 
   that the group's performance obligation in this regard is satisfied over time and that the revenue should be recognised on a straight-line basis over the terms 
   of the respective franchise agreements. The group currently recognises revenue in respect of the initial franchise fees in full upon signature of the 
   franchise agreements.

   The impact of these changes on the consolidated annual financial statements for the year ended 30 June 2018 are estimated to be as follows:

Impact on statement of comprehensive income for the year ended 30 June 2018:                                                             R'000
Decrease in profit before income tax                                                                                                    (5 507)
Decrease in income tax expense                                                                                                           1 542
Decrease in profit after income tax                                                                                                     (3 965)

Impact on statement of financial position as at 30 June 2018:                                                                            R'000
Increase in non-current liabilities                                                                                                     22 196
Increase in current liabilities                                                                                                          5 700
Decrease in deferred tax liability                                                                                                      (7 811)
Decrease in equity                                                                                                                     (20 085)

   IFRS 16 - Leases
   IFRS 16, published in 2016, sets out the principles for the recognition, measurement, presentation and disclosure of leases for lessees and lessors, 
   and replaces the previous leases standard, IAS 17 - Leases, and related interpretations. IFRS 16 has one model for lessees which will result in almost 
   all leases being included on the statement of financial position. No significant changes have been included for lessors. This standard becomes mandatory 
   for the group's 2020 financial statements.

   The group has completed an initial assessment of the potential impact of the adoption of the standard on its consolidated financial statements. The group has
   determined that it will recognise right-of-use assets and lease liabilities in respect of premises occupied for its Johannesburg regional office as well 
   as the 64 vehicles (as at 30 June 2018) currently leased. The group currently recognises the rental expense of the Johannesburg regional office and leased 
   vehicles on a straight-line basis over the lease term. Upon the adoption of IFRS 16, the group's operating lease charge in profit or loss will be replaced 
   by a depreciation charge in respect of the corresponding right-of-use assets, as well as an interest charge relating to the respective lease liabilities, 
   which may in aggregate be different to the current operating lease charge. The group plans to adopt this standard in its financial statements for the year 
   ending 30 June 2020, retrospectively, and is in the process of quantifying the impact.

16 CHANGES IN DIRECTORS
   Shareholders were advised on 27 November 2017 that the company's financial director, Ms Ronel van Dijk, tendered her resignation from the board and the 
   company on 24 November 2017 with effect from 31 March 2018. Shareholders were further advised on 26 January 2018 that Mr Phillip Matthee was appointed 
   as financial director and an executive director of the company with effect from 1 April 2018.

   Shareholders were advised on 17 August 2018 that, with effect from 15 August 2018, Ms Tasneem Karriem, a non-executive director and the representative for 
   Grand Parade Investments Ltd ("GPI") on the board, resigned as a director and that Ms Prabashinee Moodley was simultaneously appointed as non-executive 
   director and the GPI representative on the board.

ADMINISTRATION

Directors
Executive Chairman:       Allen Ambor
Chief Executive Officer:  Pierre van Tonder
Chief Operating Officer:  Mark Farrelly
Chief Financial Officer:  Phillip Matthee (appointed 1 April 2018), Ronel van Dijk (resigned 31 March 2018)
Non-executive Directors:  Keith Getz; Keith Madders; Prabashinee Moodley (appointed 15 August 2018), Tasneem Karriem (resigned 15 August 2018)
Independent Non-executive Directors: Dean Hyde; Muzi Kuzwayo; Dineo Molefe; Mntungwa Morojele

Company information
Spur Corporation Ltd (registration number 1998/000828/06)
Share code: SUR
ISIN: ZAE000022653
Company Secretary:        Nazrana Hawa
Registered Office:        14 Edison Way, Century Gate Business Park, Century City, 7441
Transfer Secretaries:     Computershare Investor Services (Pty) Ltd, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
Sponsor:                  Sasfin Capital (A division of Sasfin Bank Ltd)
Website:                  www.spurcorporation.com


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