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We take a look at the trading update brought out by Spur Corporation (SUR), the owner of Spur Steak Ranches, The Hussar Grill, Rocomamas and Nikos Charcoal Grill
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Trading update by Spur Corporation below
TRADING STATEMENT
In terms of the Listings Requirements of the JSE Limited, companies are required to publish a trading statement as soon as a reasonable degree of certainty exists that the financial results for the period to be reported upon next will differ by at least 20% from the financial results for the previous corresponding period. Accordingly, shareholders are advised that Spur is expecting to report earnings for the six months to 31 December 2019 (“current period”)as follows:
Six months to 31 to 31 December 2019 Six months December 2018 % change
EPS (cents) 121.88 – 126.49 92.33 32% – 37%
Diluted EPS (cents) 121.59 – 126.19 92.11 32% – 37%
HEPS (cents) 121.89 – 126.50 92.34 32% – 37%
Diluted HEPS (cents) 121.60 – 126.20 92.12 32% – 37%
EPS: earnings per share HEPS: headline earnings per share Note 1: Restatement required as result of the correction in the accounting for marketing funds in accordance with IFRS 15 – Revenue from contracts with customers, full details of which will be published in the interim results announcement of the company on 27 February 2020. The application of IFRS 15, with specific reference to the group’s accounting treatment for marketing funds and marketing fund administration fees (as detailed in note 41.1.1 of the company’s consolidated financial statements for the year ended 30 June 2019), was not applied to the previously published results for the six months ended 31 December 2018.
Major factors impacting on expected earnings The group previously reported that at 30 June 2019 it had provided for expected credit losses relating to a receivable from the group’s former black economic empowerment partner, Grand Parade Investments Limited, in the amount of R10.812 million. Of this amount, R4.303 million was recognised as a charge to profit or loss during the six month period to 31 December 2018. During the current period, the group concluded a specific repurchase transaction which resulted in the full receivable being recovered. Accordingly, the full provision for expected credit losses of R10.812 million has been reversed as a credit to profit or loss in the current period.
As previously reported, during the six month period to 31 December 2018, the group made an additional provision of R3.163 million for expected credit losses relating to receivables from Australian franchisees, which is included as a charge in profit or loss for that period. Expected earnings excluding above impacts
Shareholders are advised that the expected increase in EPS, diluted EPS, HEPS and diluted HEPS would be between 9% and 14% based on the restated results for the six month period to 31 December 2018, had the impact of the above been excluded. The financial information on which this trading statement is based has not been reviewed or reported on by the company’s auditors. Spur’s interim results for the period ended 31 December 2019 are expected to be published on 27 February 2020.
Cape Town 21 February 2020
In terms of the Listings Requirements of the JSE Limited, companies are required to publish a trading statement as soon as a reasonable degree of certainty exists that the financial results for the period to be reported upon next will differ by at least 20% from the financial results for the previous corresponding period. Accordingly, shareholders are advised that Spur is expecting to report earnings for the six months to 31 December 2019 (“current period”)as follows:
Six months to 31 to 31 December 2019 Six months December 2018 % change
EPS (cents) 121.88 – 126.49 92.33 32% – 37%
Diluted EPS (cents) 121.59 – 126.19 92.11 32% – 37%
HEPS (cents) 121.89 – 126.50 92.34 32% – 37%
Diluted HEPS (cents) 121.60 – 126.20 92.12 32% – 37%
EPS: earnings per share HEPS: headline earnings per share Note 1: Restatement required as result of the correction in the accounting for marketing funds in accordance with IFRS 15 – Revenue from contracts with customers, full details of which will be published in the interim results announcement of the company on 27 February 2020. The application of IFRS 15, with specific reference to the group’s accounting treatment for marketing funds and marketing fund administration fees (as detailed in note 41.1.1 of the company’s consolidated financial statements for the year ended 30 June 2019), was not applied to the previously published results for the six months ended 31 December 2018.
Major factors impacting on expected earnings The group previously reported that at 30 June 2019 it had provided for expected credit losses relating to a receivable from the group’s former black economic empowerment partner, Grand Parade Investments Limited, in the amount of R10.812 million. Of this amount, R4.303 million was recognised as a charge to profit or loss during the six month period to 31 December 2018. During the current period, the group concluded a specific repurchase transaction which resulted in the full receivable being recovered. Accordingly, the full provision for expected credit losses of R10.812 million has been reversed as a credit to profit or loss in the current period.
As previously reported, during the six month period to 31 December 2018, the group made an additional provision of R3.163 million for expected credit losses relating to receivables from Australian franchisees, which is included as a charge in profit or loss for that period. Expected earnings excluding above impacts
Shareholders are advised that the expected increase in EPS, diluted EPS, HEPS and diluted HEPS would be between 9% and 14% based on the restated results for the six month period to 31 December 2018, had the impact of the above been excluded. The financial information on which this trading statement is based has not been reviewed or reported on by the company’s auditors. Spur’s interim results for the period ended 31 December 2019 are expected to be published on 27 February 2020.
Cape Town 21 February 2020
Share price performance of Spur
The screenshot (taken from Sharenet) below shows the performance of SUR over the last 12 months, and it has been a slow gradual decline from around R36 a share 5 years ago to the current price of R25.00 a share. And as the screenshot shows the share prices has not provided positive growth for shareholders in the last year, 3 years or 5 years. Just showing how tough the food and beverages market in South Africa has been in recent years. More about that sector can be found here.
The summary below shows the stock price return of Spur Corporation over various time periods:
- 1 week: 2.49%
- 1 month: -6.24%
- Year to date: -7.47%
- 1 year: 13.07%
- 3 years: -26.32
- 5 years: -32.90