Spur Corporation Limited · JSE:SUR

Spur — H1 2017 Earnings Presentation

40 slides from Spur's earnings presentation, 2017

  1. Slide 1: Slide 1

  2. Slide 2: Overview

    OVERVIEW Restaurant Comparable sales up HEPS 10.4% up 4.5% (from continuing (from continuing operations) operations) Comparable Interim profit before tax dividend per up 5.0% share (from continuing up 6.0% operations) to 71 cents

  3. Slide 3: Overview

    OVERVIEW  Foot count down in all malls  Black Friday effect  Festive season shorter  Constrained economy – consumer confidence  Stress on the consumer – pressure on disposable income / Restaurant salesspend discretionary up  Escalating 129% food inflation due to drought and imports, margins un

  4. Slide 4: Restaurant Count

    RESTAURANT COUNT (31 December 2016) Brand South Africa International Total Spur Steak Ranches 291 39 330 Panarottis Pizza Pasta 81 12 93 Restaurant John salesGrill Sushi Dory’s Fish 47 1 48 up Captain DoRegos 44 4 48 129% The Hussar Grill 14 1 15 RocoMamas 48 3 51 Casa Bella 5 - 5 Total 530 60 590

  5. Slide 5: Financial Overview for the Six Months to December 2016

    FINANCIAL OVERVIEW FOR THE SIX MONTHS TO 31 DECEMBER 2016

  6. Slide 6: Franchise - Spur

    FRANCHISE - SPUR R’000 HY 2017 HY 2016 % change Revenue 123 013 119 438 3.0 Operating profit 108 822 107 411 1.3 Operating margin 88.5% 89.9% (1.4)

  7. Slide 7: Franchise – Pizza Pasta

    FRANCHISE – PIZZA PASTA R’000 HY 2017 HY 2016 % change Revenue 18 488 16 608 11.3 Operating profit 12 372 11 904 3.9 Operating margin 66.9% 71.7% (4.8)

  8. Slide 8: Franchise – John Dory's

    FRANCHISE – JOHN DORY’S R’000 HY 2017 HY 2016 % change Revenue 10 319 9 331 10.6 Operating profit 5 657 5 024 12.6 Operating margin 54.8% 53.8% 1.0

  9. Slide 9: Franchise – Captain DoRegos

    FRANCHISE – CAPTAIN DOREGOS R’000 HY 2017 HY 2016 % change Revenue 1 589 2 698 (41.1) Operating profit 110 1 148 (90.4) Operating margin 6.9% 42.6% (35.7)

  10. Slide 10: Franchise – The Hussar Grill

    FRANCHISE – THE HUSSAR GRILL R’000 HY 2017 HY 2016 % change Revenue (including inter-company 3 467 2 527 37.2 revenue) Operating profit 2 323 848 173.9 Operating margin 67.0% 33.6% 33.4 Please note: Revenue per the operating segment report, excludes R1.0 million (PY: R0.9m) of inter-company revenue

  11. Slide 11: Franchise – RocoMamas

    FRANCHISE – ROCOMAMAS R’000 HY 2017 HY 2016 % change Revenue (including inter-company 11 861 7 916 49.8 revenue) Operating profit 8 224 5 069 62.2 Operating margin 70.4% 64.0% 6.4 Please note: Revenue per the operating segment report, excludes R0.2 million (PY: Rnil) of inter-company revenue

  12. Slide 12: South Africa Retail

    SOUTH AFRICA RETAIL* R’000 HY 2017 HY 2016 % change Revenue 30 677 18 890 62.4 Comparable revenue 20 243 15 533 30.3 Operating profit 2 312 67 3 350.7 Add back: new/relocated 282 2 053 restaurants Comparable operating profit 2 594 2 120 22.4 Comparable operating margin 12.8% 13.6% (0.8) * Comprises

  13. Slide 13: Manufacturing & Distribution

    MANUFACTURING & DISTRIBUTION R’000 HY 2017 HY 2016 % change Revenue 98 356 96 186 2.3 Operating profit 37 041 37 060 (0.1) Operating margin 37.7% 38.5% (0.8)

  14. Slide 14: Corporate Services & Other SA

    CORPORATE SERVICES & OTHER SA R’000 HY 2017 HY 2016 % change Revenue 33 794 35 335 (4.4) Operating loss (22 140) (34 946) 36.6 Interest received (18 821) (16 581) IFRS2 charge (net of hedge) (2 246) 15 857 IFRS2 charge (new scheme) 1 671 - Spur Foundation 877 (458) RocoMamas contingent 2 816 4 758 c

  15. Slide 15: Australasia

    AUSTRALASIA R’000 HY 2017 HY 2016 % change Revenue 5 614 4 710 19.2 Profit before income tax 533 1 269 (58.0) Margin 9.5% 26.9% (17.4)

  16. Slide 16: Africa, Mauritius & The Middle East

    AFRICA, MAURITIUS & THE MIDDLE EAST R’000 HY 2017 HY 2016 % change Revenue 11 632 9 870 17.9 Operating profit 5 272 4 723 11.6 Operating margin 45.3% 47.9% (2.6)

  17. Slide 17: International Corporate Services

    INTERNATIONAL CORPORATE SERVICES R’000 HY 2017 HY 2016 % change Loss before income tax (2 991) (4 195) 28.7 Foreign exchange loss 164 958 Adjusted loss before income (2 827) (3 237) 12.7 tax * Applying a constant exchange rate, corporate costs decreased by 14.7%

  18. Slide 18: Comparable Profit – Continuing Operations

    COMPARABLE PROFIT – CONTINUING OPERATIONS R’000 HY 2017 HY 2016 % change Profit before tax 162 477 134 014 21.2 Loss from discontinuing operations (3 456) (1 144) Profit before tax – continuing operations 159 021 132 870 19.7 Share appreciation rights (net of related hedge) (2 246) 15 857 Share appr

  19. Slide 19: Comparable Headline Earnings

    COMPARABLE HEADLINE EARNINGS R’000 HY 2017 HY 2016 % change Headline earnings 107 999 97 939 10.3 Impact of share scheme (old) (3 817) 8 434 Impact of share scheme (new) – IFRS2 1 403 - charge RocoMamas contingent consideration 2 816 4 758 FV adjustment Discontinued operation - UK 1 525 (7 254) New

  20. Slide 20: Cash Flow

    CASH FLOW R’000 HY 2017 HY 2016 Cash flow from operations 139 427 139 157 Net interest received 12 939 11 558 152 366 150 715 Distributions paid (71 879) (67 933) Taxation paid (43 649) (57 289) Working capital changes (21 341) (15 183) Net investment in fixed and intangible assets (11 504) (23 273)

  21. Slide 21: Financial Position

    FINANCIAL POSITION R’000 HY 2017 HY 2016 ASSETS Leasing rights 4 759 8 505 Trade and other receivables 117 557 131 676 Loans receivable – ST 19 944 28 636 LIABILITIES Trade and other payables 64 561 96 228

  22. Slide 22: Operational Overview for the Six Months to December 2016

    OPERATIONAL OVERVIEW FOR THE SIX MONTHS TO 31 DECEMBER 2016

  23. Slide 23: Restaurant Turnovers – South Africa

    RESTAURANT TURNOVERS – SOUTH AFRICA Brand HY 2017 (R) HY 2016 (R) % change Spur Steak Ranches 2 472 723 983 2 376 644 666 4.0 Pizza Pasta 390 606 592 338 602 836 15.4 John Dory’s Fish Grill Sushi 234 636 814 199 203 163 17.8 Captain DoRegos 63 600 276 75 523 338 (15.8) The Hussar Grill 72 656 262 45

  24. Slide 24: Spur Steak Ranches

    SPUR STEAK RANCHES  291 restaurants in South Africa  4.0% turnover growth  Menu price increases  3.3% December 2015  2.1% June 2016  3.5% December 2016  Market share maintained – foot traffic; lower spend per head  Family card redemption at 79.2% – consumer value driven  Investment in opera

  25. Slide 25: Pizza Pasta

    PIZZA PASTA  86 restaurants in South Africa  Store turnover growth 15.4%  Menu price increases: Date of increase Panarottis Casa Bella November 2015 2.1% July 2016 5.1% November 2016 7.2% December 2016 2.9%  Very competitive market with international competitors  Loyalty launched – 176 000 memb

  26. Slide 26: John Dory's Fish Grill Sushi

    FISH GRILL SUSHI  47 restaurants in South Africa  17.8% turnover growth  Menu price increases  2.8% July 2015  1.9% December 2015  7.0% June 2016  6.1% December 2016  New design rolled out and well accepted by consumer  Loyalty programme 319 000 members, redemption rate of 56%  Menu reduce

  27. Slide 27: Captain DoRegos

    CAPTAIN DOREGOS  44 restaurants in South Africa  15.8% decrease in turnover  Menu price increases  2.4% December 2015  -0.5% May 2016  3.9% December 2016  New model for franchisees introduced to maintain franchisee profitability (franchise fees)  Direct reflection of the state of the lower e

  28. Slide 28: The Hussar Grill

    THE HUSSAR GRILL  14 restaurants in South Africa  58.0% turnover growth  Menu price increases  4.3% May 2015  6.0% May 2016  Consumer more resilient to economic decline  Good acceptance of the brand in new regions  Encouraging interest in other regions for growth

  29. Slide 29: RocoMamas

    ROCOMAMAS  48 restaurants in South Africa  113.3% turnover growth  Menu price increases  1.7% in first half of FY 2016  3.3% in second half of FY 2016  2.3% in November 2016  Edgy brand appealing to millennials  Huge customer and franchisee interest  Social media following

  30. Slide 30: Brand Development in South Africa

    BRAND DEVELOPMENT IN SOUTH AFRICA Brand 1 Jan 2017 – 30 June 2017 Spur Steak Ranches 3 Pizza Pasta 1 John Dory’s Fish Grill Sushi 3 Captain DoRegos 2 The Hussar Grill 1 RocoMamas 2 Total 12

  31. Slide 31: Restaurant Turnovers – International

    RESTAURANT TURNOVERS – INTERNATIONAL Location HY 2017 (R) HY 2016 (R) % change Australasia 135 858 281 112 581 119 20.7 Africa 181 601 282 179 347 066 1.3 Mauritius 61 205 172 48 060 617 27.3 Middle East 2 098 925 - Total continuing 380 763 660 339 988 802 12.0 operations United Kingdom - 63 951 333

  32. Slide 32: Restaurant Footprint – International

    RESTAURANT FOOTPRINT – INTERNATIONAL Location Spur Steak Panarottis John Dory’s Captain Hussar RocoMamas Total Ranches Pizza Pasta Fish Grill Sushi DoRegos Grill Australia 6 5 11 Botswana 2 2 Ethiopia 1 1 Kenya 4 4 Lesotho 1 1 Oman 1 1 Malawi 1 1 Mauritius 3 6 1 1 11 Namibia 7 2 1 10 New Zealand 1 1

  33. Slide 33: International

    INTERNATIONAL  Australia  Trade in Western Australia heavily affected by mining slump  Aggressive marketing campaigns  Positive signs/interest in NSW  New Zealand  White Cloud Spur opened in Auckland in October 2016  Exceeded all expectations  Launching pad for new opportunities  Cautious a

  34. Slide 34: International

    INTERNATIONAL  Africa  Difficult trading conditions  Currency fluctuations and political uncertainties - stress on franchisee margins  Focus on expanding in territories in which we trade  Country-specific marketing and loyalty initiatives  Middle East  RocoMamas Oman launched in October 2016

  35. Slide 35: Brand Development - International

    BRAND DEVELOPMENT - INTERNATIONAL Brand 1 Jan 2017 – 30 June 2017 Botswana – Spur 1 Kenya – Spur 1 Kenya – RocoMamas 1 Namibia – John Dory’s 1 Nigeria – Panarottis 1 Nigeria – Spur 1 Saudi Arabia - RocoMamas 1 Zimbabwe – RocoMamas 1 Zimbabwe – Panarottis 1 Total 9

  36. Slide 36: Manufacturing & Distribution

    MANUFACTURING & DISTRIBUTION  Sauce factory margins under pressure  Imported raw materials – double digit increases  Affected by exchange rate  5.7% selling price increase in March 2017  Unable to pass increase onto franchisees  Rib manufacturing plant  Improvements since change of management

  37. Slide 37: Prospects

    PROSPECTS  Focus on sustainable growth  Opportunities to be explored in consultation with our franchisees to ensure continuation/growth of brands  RocoMamas / Casa Bella / Grill & Go  Declining disposable income  Rising food, energy and medical costs  Franchisee profitability and margins  Pol

  38. Slide 38: Disclaimer

    DISCLAIMER  Spur Corporation has acted in good faith and has made every reasonable effort to ensure the accuracy and completeness of the information contained in this presentation, including all information that may be defined as 'forward-looking statements' within the meaning of United States secu

  39. Slide 39: Thank You Questions?

    THANK YOU QUESTIONS?

  40. Slide 40: Contact Details

    CONTACT DETAILS CEO – Pierre van Tonder pvt@spur.co.za CFO – Ronel van Dijk ronelv@spur.co.za Tier 1 Investor Relations 021 702 3102

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