Spur Corporation Limited · JSE:SUR

Spur — H1 2016 Earnings Presentation

43 slides from Spur's earnings presentation, 2016

  1. Slide 1: Results for the Six Months Ended 31 December 2015

    RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2015

  2. Slide 2: Overview

    OVERVIEW Comparable R3.5 billion HEPS restaurant up 1.4% turnover 0 reached (for 6 months) Restaurant sales Comparable Dividend per up profit share up 8.1% to 12.6% before tax 67 cents up 5.8%

  3. Slide 3: Restaurant Count

    RESTAURANT COUNT (31 December 2015) Brand South Africa International Total Spur Steak Ranches 288 43 331 Panarottis Pizza Pasta 81 13 94 John Dory’s Fish Grill Sushi 40 1 41 Captain DoRegos 59 3 62 The Hussar Grill 11 1 12 RocoMamas 31 1 32 Total 510 62 572

  4. Slide 4: Financial Overview for the Six Months to 31 December 2015

    FINANCIAL OVERVIEW FOR THE SIX MONTHS TO 31 DECEMBER 2015

  5. Slide 5: Franchise - Spur

    FRANCHISE - SPUR R’000 HY 2016 HY 2015 % change Revenue 119 438 112 669 6.0 Operating profit 107 411 100 856 6.5 Operating margin 89.9% 89.5% 0.4

  6. Slide 6: Franchise - Panarottis

    FRANCHISE - PANAROTTIS R’000 HY 2016 HY 2015 % change Revenue 16 608 13 476 23.2 Operating profit 11 904 9 144 30.2 Operating margin 71.7% 67.9% 3.8

  7. Slide 7: Franchise – John Dory's

    FRANCHISE – JOHN DORY’S R’000 HY 2016 HY 2015 % change Revenue 9 331 8 126 14.8 Operating profit 5 024 4 672 7.5 Operating margin 53.8% 57.5% (3.7)

  8. Slide 8: Franchise – Captain DoRegos

    FRANCHISE – CAPTAIN DOREGOS R’000 HY 2016 HY 2015 % change Revenue 2 698 3 262 (17.3) Operating profit 1 148 973 18.0 Operating margin 42.6% 29.8% 12.7

  9. Slide 9: Franchise – The Hussar Grill

    FRANCHISE –THE HUSSAR GRILL R’000 HY 2016 HY 2015 % change Revenue 1 641 1 226 33.8 Operating profit 848 759 11.7 Operating margin 51.7% 61.9% (10.2)

  10. Slide 10: South Africa Retail

    SOUTH AFRICA RETAIL R’000 HY 2016 HY 2015 % change Revenue 18 890 14 579 29.6 Operating profit 67 1 985 (96.6) Add back: new/relocated 2 070 - restaurants set up costs Adjusted operating profit 2 137 1 985 7.7 Adjusted operating margin 11.3% 13.6% (2.3)

  11. Slide 11: Franchise – RocoMamas

    FRANCHISE – ROCOMAMAS (acq. 1 March 2015) R’000 HY 2016 Revenue 7 916 Operating profit 5 069 Operating margin 64.0%

  12. Slide 12: Manufacturing & Distribution

    MANUFACTURING & DISTRIBUTION R’000 HY 2016 HY 2015 % change Revenue 96 186 93 035 3.4 Operating profit 37 060 36 391 1.8 Operating margin 38.5% 39.1% (0.6)

  13. Slide 13: Corporate Services & Other SA

    CORPORATE SERVICES & OTHER SA R’000 HY 2016 HY 2015 % change Revenue 35 335 34 296 3.0 Operating loss (34 946) (67 911) 48.5 Interest received (13 245) (7 319) GPI preference dividend (3 336) (1 043) IFRS2 charge (net of hedge) 15 857 11 835 IFRS2 charge – GPI deal - 32 957 Spur Foundation (738) (51

  14. Slide 14: United Kingdom

    UNITED KINGDOM R’000 HY 2016 HY 2015 % change Revenue 63 972 80 107 (20.1) Operating profit/(loss) 1 144 (2 418) 147.3 Closure of two restaurants (6 055) 861 Foreign exchange (gain)/loss 4 68 (4 907) (1 489) 229.6 Add back/(deduct): Depreciation 2 250 1 786 Interest (25) - Adjusted cash flow (2 682)

  15. Slide 15: United Kingdom

    UNITED KINGDOM R’000 HY 2016 Impact of closure of 2 restaurants Profit on sale of leases 16 291 Loss on disposal of assets* (10 927) Goodwill disposed of* (444) Foreign currency translation reserve on 4 310 disposal* 9 230 Trading losses (3 175) 6 055 *excluded from net profit to calculate headline

  16. Slide 16: Australia

    AUSTRALIA R’000 HY 2016 HY 2015 % change Revenue 4 710 37 932 (87.6) Operating profit/(loss) 1 269 4 252 (70.2) Profit on sale of Panarottis - (1 506) Blacktown Foreign exchange loss 44 16 1 313 2 762 (52.5) Add back/(deduct): Depreciation - 836 Interest - (26) Adjusted cash flow profit 1 313 3 572

  17. Slide 17: Australia - Franchise

    AUSTRALIA - FRANCHISE R’000 HY 2016 HY 2015 % change Revenue 4 710 2 712 73.7 Net profit* 1 269 719 76.5 Net profit margin* 26.9% 26.5% 1.6 * Before interest and tax

  18. Slide 18: Africa & Mauritius

    AFRICA & MAURITIUS R’000 HY 2016 HY 2015 % change Revenue 9 870 9 974 (1.0) Operating profit 4 723 5 966 (20.8) Operating margin 47.9% 59.8% (11.9)

  19. Slide 19: International Corporate Services

    INTERNATIONAL CORPORATE SERVICES R’000 HY 2016 HY 2015 % change Operating loss (4 195) (2 176) (92.8) Foreign exchange loss/(gain) 958 (485) Comparable operating loss (3 237) (2 661) (21.6) Increase in costs in Euros 14.7%

  20. Slide 20: Comparable Profit

    COMPARABLE PROFIT R’000 HY 2016 HY 2015 % change Profit before tax 134 014 92 139 45.4 Share appreciation rights (net of related hedge) 15 857 11 835 Share appreciation rights (actual net cost (4 143) (3 625) amortised on straight line basis) Impact of GPI transaction (10 520) 29 820 RocoMamas conti

  21. Slide 21: Comparable Headline Earnings

    COMPARABLE HEADLINE EARNINGS R’000 HY 2016 HY 2015 % change Headline earnings 97 939 54 533 79.6 Share appreciation rights (net of related hedge) 11 417 8 521 Share appreciation rights (actual net cost (2 983) (2 610) amortised on straight line basis) Impact of GPI transaction (8 508) 30 491 RocoMam

  22. Slide 22: Cash Flow

    CASH FLOW R’000 HY 2016 HY 2015 Cash flow from operations 139 157 109 407 Net interest received 11 558 5 589 150 715 114 996 Distributions paid (67 933) (54 732) Taxation paid (57 289) (38 635) Working capital changes (15 183) (15 448) Net investment in fixed assets (23 273) (15 305) Purchase of tre

  23. Slide 23: Financial Position

    FINANCIAL POSITION R’000 HY 2016 HY 2015 ASSETS Property, plant and equipment 97 272 83 077 Intangible assets and goodwill 384 165 359 169 Investments and loans 147 584 130 689 Tax receivable 34 359 11 314 Trade and other receivables 165 522 117 956 Net cash balance 290 575 309 791 LIABILITIES Conti

  24. Slide 24: Operational Overview for the Six Months to 31 December 2015

    OPERATIONAL OVERVIEW FOR THE SIX MONTHS TO 31 DECEMBER 2015

  25. Slide 25: Restaurant Turnovers – South Africa

    RESTAURANT TURNOVERS – SOUTH AFRICA Brand HY 2016 (R) HY 2015 (R) % change Spur Steak Ranches 2 376 644 666 2 226 357 107 6.8 Panarottis Pizza Pasta 338 602 936 278 431 762 21.6 John Dory’s Fish Grill Sushi 199 203 163 165 689 621 20.2 Captain DoRegos 75 523 338 75 059 475 0.6 The Hussar Grill 45 97

  26. Slide 26: Spur Steak Ranches

    SPUR STEAK RANCHES  288 restaurants in South Africa  6.8% turnover growth  Menu price increases  3.3% December 2015  Dramatic slow down in consumer spending – drastic rise in domestic costs for individual consumers  Smaller units for smaller towns  Spur Grill & Go (3 open)

  27. Slide 27: Panarottis Pizza Pasta

    PANAROTTIS PIZZA PASTA  81 restaurants in South Africa  Exceptional store turnover growth  2013/2014 – 28.2%  2014/2015 – 25.4%  6 months to Dec 2015 – 21.6%  Menu price increases  2.1% November 2015  Continuous use of authentic Italian products  Focus on product quality  Loyalty

  28. Slide 28: John Dory's Fish Grill Sushi

    JOHN DORY’S FISH GRILL SUSHI  40 restaurants in South Africa  20.2% turnover growth  Menu price increases  2.8% July 2015  1.9% December 2015  New look restaurants  Supply chain issues  Engage with Namibian authorities for FIP (Fisheries Improvement Project)  On a sustainability journey to

  29. Slide 29: Captain DoRegos

    CAPTAIN DOREGOS  59 restaurants in South Africa  0.6% turnover growth  Menu price increases  2.4% December 2015  Market highly affected by economic environment  New model for franchisees introduced to maintain franchisee profitability (franchise fees)

  30. Slide 30: The Hussar Grill

    THE HUSSAR GRILL  11 restaurants in South Africa  36.9% turnover growth  Existing store turnover growth 18.5%  No menu price increase  Consumer more resilient with more disposable income

  31. Slide 31: RocoMamas

    ROCOMAMAS  51% acquired 1 March 2015  Five franchised restaurants at 1 March 2015  31 restaurants - 31 December 2015  Menu price increase 1.7% over the period  Trendy, personalised restaurant concept; customised but casual and affordable menu  Handmade “smash-style” burgers, ribs and wings - a

  32. Slide 32: Brand Development in South Africa

    BRAND DEVELOPMENT IN SOUTH AFRICA Opened To open Total stores at Brand 1 July – 1 Jan – Total to 30 June 2016 31 Dec 2015 30 June 2016 open Spur Steak Ranches 12 5 17 293 above includes Spur Grill & Go 3 1 4 4 Panarottis Pizza Pasta 6 3 9 84 John Dory’s Fish Grill 3 5 8 45 Sushi Captain DoRegos 5 -

  33. Slide 33: Restaurant Turnovers – International

    RESTAURANT TURNOVERS – INTERNATIONAL Location HY 2016 (R) HY 2015 (R) % change Australia 112 581 119 108 610 217 3.7 United Kingdom 63 951 333 79 735 217 (19.8) Africa 179 347 066 146 179 314 20.2 Mauritius 48 060 617 38 349 974 25.3 Total 403 940 135 372 874 722 8.3

  34. Slide 34: International Restaurant Footprint

    INTERNATIONAL RESTAURANT FOOTPRINT Location Spur Steak Panarottis John Dory’s Captain Hussar RBW/Roco Total Ranches Pizza Pasta Fish Grill Sushi DoRegos Grill Mamas Australia 5 4 9 UK & Ireland 5 1 6 Botswana 3 1 4 Kenya 3 3 Lesotho 1 1 Malawi 1 1 Mauritius 3 6 1 10 Namibia 9 1 1 1 12 Nigeria 2 2 Sw

  35. Slide 35: Brand Development - International

    BRAND DEVELOPMENT - INTERNATIONAL Brand Opened To open Total stores at 1 July – 1 Jan – Total to 30 June 2016 31 Dec 2015 30 June 2016 open Spur Steak Ranches 2 4 6 47 Panarottis Pizza Pasta 1 1 2 14 John Dory’s Fish Grill - - - 1 Sushi Captain DoRegos 1 1 2 4 The Hussar Grill 1 - 1 1 RocoMamas 1 -

  36. Slide 36: International

    INTERNATIONAL  Australia  Fully franchised  UK & Ireland  Strategy to exit leases  Africa  Buoyant market  Costs need careful control  Distribution challenges  Middle East  Oman deal signed

  37. Slide 37: Manufacturing & Distribution

    MANUFACTURING & DISTRIBUTION  Sauce Manufacturing  HACCP certification maintained  Impact of rand slump on raw materials  Price increase June 2014 and January 2016  Outsourced distribution – Vector  Delivered 19 143 tonnes during 6 months to December 2015 (6% up on prior year)  Good buy-in fr

  38. Slide 38: Marketing & Loyalty

    MARKETING & LOYALTY  Combined marketing funds managed R226.7 million  42 employees (6 in Johannesburg office) Spur  Family card – 1.9 million active members  Loyalty revenue 39.5%  Loyalty spend 32% higher than non-loyalty  65.4% redemption rate on vouchers loaded  6 new TV commercials  480

  39. Slide 39: Marketing & Loyalty

    MARKETING & LOYALTY Panarottis Pizza Pasta  New product quality-orientated TV and radio, and retail commercials  New loyalty programme John Dory’s Fish Grill Sushi  Amplify new front of house design  New paid TV sponsorships of retail offers RocoMamas and The Hussar Grill  Digitally focused mar

  40. Slide 40: Prospects

    PROSPECTS  Food inflation  Rand/Dollar exchange rate  Drought in South Africa  Expected 20% - 30%  Cost of energy  Political uncertainty  Value-added product  Franchisee profitability and margins  RocoMamas / RBW / Grill & Go  Alternative manufacturing facilities in Gauteng – transport cos

  41. Slide 41: 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

  42. Slide 42: Thank You Questions?

    THANK YOU QUESTIONS?

  43. Slide 43: 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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