RESULTS FOR THE YEAR ENDED 30 JUN 2017 RESULTS FOR THE YEAR ENDED 30 JUNE 2017

Transcription

1 RESULTS FOR THE YEAR ENDED 30 JUN 2017 RESULTS FOR THE YEAR ENDED 30 JUNE 2017

2 OVERVIEW R7.2 billion restaurant turnover achieved Comparable HEPS down 8.3% (from conhnuing operahons) Restaurant sales up 4.4% Comparable profit before tax down 8.7% (from conhnuing operahons)

3 Economic condihons recession, poor environment EscalaHng food inflahon Increasing living costs disposable income under pressure Highly compehhve market with very aggressive Restaurant sales up 129% OVERVIEW pricing promohons Sharp decline in shopping centre foot traffic Effect of social media Franchisee profit margins under pressure

4 FINANCIAL RESULTS FOR THE YEAR TO 30 JUNE 2017

5 RESTAURANT TURNOVERS SOUTH AFRICA July to March Brand 2017 (R 000) 2016 (R 000) % change Spur Steak Ranches Pizza Pasta John Dory s Fish Grill Sushi Captain DoRegos (16.7) The Hussar Grill RocoMamas Total

6 RESTAURANT TURNOVERS SOUTH AFRICA April to June Brand 2017 (R 000) 2016 (R 000) % change Spur Steak Ranches (14.9) Pizza Pasta John Dory s Fish Grill Sushi Captain DoRegos (20.7) The Hussar Grill RocoMamas Total (6.3)

7 RESTAURANT TURNOVERS SOUTH AFRICA Year to June Brand 2017 (R 000) 2016 (R 000) % change Spur Steak Ranches (2.1) Pizza Pasta John Dory s Fish Grill Sushi Captain DoRegos (17.6) The Hussar Grill RocoMamas Total

8 RESTAURANT COUNT (30 June 2017) Brand South Africa InternaOonal Total Spur Steak Ranches Pizza Pasta Restaurant sales up 129% John Dory s Fish Grill Sushi Captain DoRegos The Hussar Grill RocoMamas Total

9 FRANCHISE - SPUR R % change Revenue July March April June (25.2) Year to June Revenue (5.2) OperaHng profit (8.7) OperaHng margin 86.3% 89.6% (3.3)

10 FRANCHISE PIZZA PASTA R % change Revenue July March April June Year to June Revenue OperaHng profit OperaHng margin 64.7% 67.9% (3.1)

11 FRANCHISE JOHN DORY S R % change Revenue July March April June (2.2) Year to June Revenue OperaHng profit OperaHng margin 49.3% 51.6% (2.3)

12 FRANCHISE CAPTAIN DOREGOS R % change Revenue July March (36.4) April June (44.9) Year to June Revenue (38.0) OperaHng profit (8 040) (17 851) (55.0) MarkeHng loan wrifen off Trademark impairment Comparable operaong (loss) /profit Comparable operaong margin (276) (124.7) (9.8%) 24.6% (34.5)

13 FRANCHISE HUSSAR GRILL R % change Revenue (pre-interco eliminahons) July March April June (4.9) Year to June Revenue (pre-interco eliminahons) OperaHng profit OperaHng margin 60.0% 48.8% 11.2

14 FRANCHISE ROCOMAMAS R % change Revenue (pre-interco eliminahons) July March April June Year to June Revenue (pre-interco eliminahons) OperaHng profit OperaHng margin 67.6% 69.2% (1.6)

15 SOUTH AFRICA RETAIL* R % change Revenue Comparable revenue OperaHng profit Add back: new/relocated restaurants set up costs Comparable operaong profit OperaOng margin 7.3% 1.9% 5.4 Comparable operaong margin 12.2% 13.4% (1.2) * Comprises four The Hussar Grill restaurants and one RocoMamas

16 MANUFACTURING & DISTRIBUTION R % change Revenue OperaHng profit (3.3) OperaHng margin 36.4% 37.9% (1.5)

17 CORPORATE SERVICES & OTHER SA R % change Revenue OperaOng loss (96 982) (51 873) (87.0) IFRS2 charge (net of hedge) IFRS2 charge (new scheme) Braviz impairment Spur FoundaHon RocoMamas conhngent considerahon FV adjustment 777 (3 723) Comparable operaong loss (47 826) (29 156) (64.0)

18 AUSTRALASIA R % change Revenue (9.8) Net (loss)/profit (111) (103.5) Net operahng margin (1.1%) 29.0% (30.1)

19 AFRICA, MAURITIUS & THE MIDDLE EAST R % change Revenue OperaHng profit (17.9) OperaHng margin 40.5% 49.4% (8.9)

20 INTERNATIONAL CORPORATE SERVICES R % change OperaHng loss (5 345) (10 326) 48.2 ExcepHonal items Foreign exchange loss Adjusted operaong loss (4 629) (6 570) 29.5 * Applying a constant exchange rate, corporate costs decreased by 23.6%

21 COMPARABLE PROFIT CONTINUING OPERATIONS R % change Profit before tax (1.8) Loss from disconhnued operahons (4 084) Profit before tax conhnuing operahons (14.9) Share appreciahon rights (net of related hedge) Share appreciahon rights (actual net cost amorhsed) (4 313) (7 198) New scheme IFRS2 charge RocoMamas conhngent considerahon FV adj 777 (3 723) Abnormal bad debt Spur FoundaHon Impairment losses New store/relocahon costs Foreign exchange loss Comparable profit before tax (8.7)

22 COMPARABLE HEADLINE EARNINGS R % change Headline earnings (18.4) United Kingdom Headline earnings conhnuing operahons (25.9) Impact of share scheme (old) (1 668) Impact of share scheme (new) IFRS2 charge RocoMamas conhngent considerahon FV adj 777 (3 723) Abnormal bad debt Impairment losses New store/relocahon costs Foreign exchange loss Comparable headline earnings (8.4) WANOS (0.1) Comparable HEPS (cents per share) (8.3)

23 CASH FLOW R Cash flow from operahons Net interest received DistribuHons paid ( ) ( ) TaxaHon paid (85 303) ( ) Working capital changes (1 515) (7 326) Net investment in fixed and intangible assets (17 105) (37 686) Purchase of treasury shares (4 993) (9 341) Cash flow from share-based payment hedge (7 405) Cash impact of investments in/disposals of subsidiaries (33 664) (20 369) Decrease in loans receivable Net cash decrease for the year (23 737) (15 513)

24 FINANCIAL POSITION R ASSETS Intangible assets and goodwill Loans receivable Tax receivable Trade and other receivables LIABILITIES ConHngent considerahon LT ConHngent considerahon ST Loans payable Bank overdrao

25 OPERATIONAL OVERVIEW FOR THE YEAR TO 30 JUNE 2017

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27 SPUR STEAK RANCHES 283 Spur Steak Ranches in South Africa 6 Spur Grill & Go restaurants in South Africa 2.4% turnover decline (exishng store turnover declined 9.9%) Menu price increases 3.5% December 2016 Focused on excellent markehng, nahonwide retraining, upgrading of menu content to aid franchisee profitability Total investment by franchisees in new stores, revamps and relocahons = R78.6 million

28 SPUR STEAK RANCHES Strategy for the year ahead Back to basics/our roots (February 2017) Product pillars Service excellence Kids experience InnovaHons on kids entertainment opportunihes CreaHve and focused markehng move away from discounhng Constant re-evaluahon of the menu Employing a full-hme chef to aid with menu content and innovahon In-house manufacturing of products

29 SPUR STEAK RANCHES Strategy for the year ahead PosiHve learnings from social media fallout In-store efficiencies Community involvement and support Owners back in their businesses daily Investment in training of restaurant and head office personnel Refurbishments and strategic relocahons Rolling out Grill & Go and smaller Spur concept

30 PIZZA PASTA 86 restaurants in South Africa Store turnover growth 12.7% (Casa Bella R44.5m 9.6% ahead of budget) Menu price increases Panaroqs - 5.1% July 2016, 2.9% December 2016 Casa Bella 7.2% November 2016 Focus on product quality and franchisee profitability Highly compehhve pizza industry with internahonal compehtors running heavily discounted specials Total investment by franchisees in new stores, revamps and relocahons = R26.8 million

31 PIZZA PASTA Strategy Further roll-out of Casa Bella three more planned Further enhance the look and feel launched first store (Cradlestone) TesHng rotahng wood-fired pizza oven Basic operahonal fundamentals footprint 300m2, labour and energy efficiencies and rental negohahons RaHonalisaHon of menu Loyalty programme growth

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33 FISH GRILL SUSHI 48 restaurants in South Africa 14.3% turnover growth Menu price increases 7.0% June % December 2016 ReducHon in franchisee profitability - seafood basket under pressure; menu content examined for sustainability of business Focus on labour costs and effechve scheduling Making in-house quality products to improve margins Total investment by franchisees in new stores and revamps = R26.4 million

34 FISH GRILL SUSHI Strategy ConHnue roll-out of new look and feel Grow loyalty programme Sustainability of supply / inveshgahng alternahve sources of supply Television campaigns focus on value-added campaigns and brand adverhsements to enhance profile in market place Focus on digital presence

35 CAPTAIN DOREGOS 41 restaurants in South Africa 17.3% decrease in turnover (same stores 0.9% growth) Menu price increase 3.9% December 2016 Fee structure reduced from 5% to 3.5% towards the end of 2016 to maintain franchisee profitability OperaHons team rahonalised Partnerships with suppliers to offer greater value eg Coca-Cola Total investment by franchisees in new stores and revamps = R1.45 million

36 CAPTAIN DOREGOS Strategy ImplemenHng downsized store model in new developments Reducing costs of delivery of products to stores / regional deliveries Redesign markehng strategy free up funds for local markehng Reduce stock levels at stores ImplemenHng a single item affordable menu line Development of mobile unit Product development reduce equipment costs

37 THE HUSSAR GRILL 14 restaurants in South Africa 35.6% turnover growth (exishng store turnover up 25.2%) Menu price increase 6.0% May 2017 Two new restaurants opened Port Elizabeth and Durban Consumer least affected by economic Hmes Maintained premium award-winning credenhals Increased spend on social media, secured public relahons and blogger partnerships

38 THE HUSSAR GRILL Strategy Building on the brand nahonally Maintaining operahng standards through training programmes / franchisee training MarkeHng aimed at re-enforcing premium credenhals and brand excellence eg TripAdvisor Ensuring franchisee involvement in stores and in their communihes New stores planned at Montecasino and in Franschhoek

39 ROCOMAMAS 50 restaurants in South Africa Menu price increase 2.3% in November 2016 Focused on growing market share in a highly compehhve environment Located outside of mall environments Total investment by franchisees in new stores and revamps = R31.2 million

40 ROCOMAMAS Strategy Focus on franchisee profitability Product engineering Monitor market pulse and consumer trends eg GoReview Focus on core products Growing take-out and delivery business (UberEATS)

41 BRAND DEVELOPMENT IN SOUTH AFRICA Brand 2018 Spur Steak Ranches 10 Pizza Pasta 6 John Dory s Fish Grill Sushi 4 Captain DoRegos 4 The Hussar Grill 3 RocoMamas 7 Total 34

42 RESTAURANT TURNOVERS INTERNATIONAL LocaOon 2017 (R 000) 2016 (R 000) % change Australia United Kingdom Africa (4.1) MauriHus Middle East Total (10.7)

43 RESTAURANT FOOTPRINT INTERNATIONAL LocaOon Spur Panaro]s John Dory s DoRegos Hussar RocoMamas Total Australia Botswana 3 3 Ethiopia 1 1 Kenya 5 5 Lesotho 1 1 Malawi 1 1 MauriHus Namibia New Zealand 1 1 Nigeria 3 3 Oman 1 1 Saudi Arabia 1 1 Swaziland 2 2 Tanzania Uganda 1 1 Zambia Zimbabwe Total

44 INTERNATIONAL Australasia 12 restaurants Fully franchised Spur opened in Auckland in November 2016 Variable trading condihons Franchisee assistance Product subsidies Concessions MarkeHng Enquiries on RocoMamas opportunihes MauriHus 10 restaurants ExciHng region ConHnued prospects

45 INTERNATIONAL Africa VolaHle trading condihons Currency devaluahons result in pressure on margins Improvements in supply channels Focus on operahonal efficiencies GoReview and loyalty Retraining of enhre teams where necessary Middle East RocoMamas Oman opened October 2016 RocoMamas Saudi Arabia opened February 2017

46 BRAND DEVELOPMENT - INTERNATIONAL Brand 2018 Kenya RocoMamas 1 MauriHus Panaroqs Express 1 Namibia Panaroqs 1 Nigeria Panaroqs 1 Nigeria Spur 1 Saudi Arabia RocoMamas 1 Saudi Arabia Hussar Grill 1 Swaziland - Spur 1 Zimbabwe - RocoMamas 1 Total 9

47 MANUFACTURING & DISTRIBUTION Sauce factory turnover and margins under pressure 7% increase in March 2017 Balancing margins of franchisee and franchisor Gauteng manufacturing facility not feasible InvesHgaHng relocahon of current facility to Baker Street (eshmated capex R50m) Outsourced distribuhon Delivered 5.2 million cases to our restaurants in the financial year to June 2017 Improved efficiencies in pack sizes RaHonalise number of SKUs to improve costs

48 PROSPECTS / OUTLOOK FOR 2018

49 PROSPECTS Food inflahon ErraHc exchange rate Regional droughts in South Africa Cost of energy Economic uncertainty Franchisee profitability and margins Improvements already coming through in stores

50 PROSPECTS New footprints more franchising opportunihes; improved ROI for franchisees Revitalising BOH New sauce factory improved efficiencies and wider range of sauces Investment in markehng automahon (mass automahon of customizahon of messaging) ConHnuous investment in social media New store openings locally and internahonally New internally generated brands Focused approach on African development Prudent cost management ConHnue to seek acquisihon opportunihes

51 DISCLAIMER Spur CorporaHon has acted in good faith and has made every reasonable effort to ensure the accuracy and completeness of the informahon contained in this presentahon, including all informahon that may be defined as 'forward-looking statements' within the meaning of United States securihes legislahon. Forward-looking statements may be idenhfied by words such as 'believe', 'anhcipate', 'expect', 'plan', 'eshmate', 'intend', 'project', 'target', 'predict' and 'hope'. Forward-looking statements are not statements of fact, but statements by the management of Spur CorporaHon based on its current eshmates, projechons, expectahons, beliefs and assumphons regarding the group's future performance. No assurance can be given that forward-looking statements will prove to be correct and undue reliance should not be placed on such statements. The risks and uncertainhes inherent in the forward-looking statements contained in this presentahon include, but are not limited to: changes to IFRS and the interpretahons, applicahons and prachces subject thereto as they apply to past, present and future periods; domeshc business and market condihons; changes in the domeshc regulatory and legislahve environments; changes to domeshc operahonal, social, economic and polihcal risks; and the effects of both current and future lihgahon. Spur CorporaHon does not undertake to update any forward-looking statements contained in this presentahon and does not assume responsibility for any loss or damage whatsoever and howsoever arising as a result of the reliance by any party thereon, including, but not limited to, loss of earnings, profits, or consequenhal loss or damage.

52 THANK YOU QUESTIONS?

53 CONTACT DETAILS CEO Pierre van Tonder CFO Ronel van Dijk Tier 1 Investor RelaHons