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SPUR CORPORATION LIMITED - Unaudited financial statements and cash dividend declaration for the six months ended 31 December 2018

Release Date: 28/02/2019 09:00
Code(s): SUR     PDF:  
 
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Unaudited financial statements and cash dividend declaration for the six months ended 31 December 2018

SPUR CORPORATION LIMITED 
(Registration number 1998/000828/06)
Share code: SUR
ISIN: ZAE000022653
("Spur Corporation")

Prepared under the supervision of the  Chief Financial Officer, Phillip Matthee CA(SA)
Spur Corporation Limited (Registration number: 1998/000828/06)

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND CASH DIVIDEND DECLARATION
FOR THE SIX MONTHS ENDED 31 DECEMBER 2018

Overview

RESTAURANT SALES
Up 6.5%*
*Excluding Captain DoRegos, disposed of 1 March 2018

COMPARABLE PROFIT BEFORE INCOME TAX
Up 12.4%

COMPARABLE HEADLINE EARNINGS PER SHARE
Up 11.7%

DIVIDEND PER SHARE
63 cents

RESULTS COMMENTARY

TRADING PERFORMANCE

In an environment of low economic growth in South Africa, increasing demands on disposable income and weakening sentiment among the group's middle-income customer
base, Spur Corporation reported a competitive trading performance for the six months to December 2018.

Total franchised restaurant sales across the local and international operations increased by 4.8% to R3.9 billion, and by 6.5% excluding the results of the Captain
DoRegos chain, which was sold with effect from 1 March 2018.

Franchised restaurant sales in South Africa, excluding Captain DoRegos, grew by 5.7%. Sales increased by 11.3% in the first quarter to September 2018, supported by the
continued recovery in the Spur Steak Ranches brand and a strong performance in The Hussar Grill. However, sales growth in the second quarter to December 2018 slowed to
1.2% as discretionary spending came under growing pressure, which contributed to a further decline in shopping centre foot traffic.

Management's primary focus in the current economic climate has been on enhancing franchisee profitability to ensure the sustainability of the group's business model.
Following the successful changes to the promotional and discounting strategies for Spur in the previous financial year, further initiatives are being undertaken to
improve franchisee margins across the brands. These include expanding the range of "home-made" products manufactured in Spur restaurants, rationalising menu offerings
in certain brands to promote efficiencies, renegotiating rentals and reducing the size of restaurants where appropriate. These measures are positively impacting
franchisee margins and profitability, resulting in a more sustainable franchise business.

Spur Steak Ranches increased restaurant sales by 6.1% and by 5.1% in existing restaurants. The strength of the iconic Spur brand among South African
families and the loyal customer base of 1.2 million Spur Family Card members has been key to driving growth in the current weak trading environment.

Restaurant sales in Pizza and Pasta, incorporating Panarottis and Casa Bella, declined by 1.5% as the Panarottis chain was impacted by aggressive discounting by
competitors in the takeaway pizza market. The brand continues to focus on high-quality ingredients while generating sustainable margins for its franchisees. Operating
profit in Pizza and Pasta increased by 9.4% for the first half.

Restaurant sales in RocoMamas grew by 6.0% as the brand's urban millennial market was not immune to the economic downturn. The brand has been through a period of
consolidation following the unprecedented increase in restaurant numbers, which saw its national footprint expand to 70. RocoMamas has grown restaurant sales by an
annual compound rate of 45.9% since being acquired by the group in 2015.

John Dory's restaurant sales declined by 0.8%, impacted by the temporary closure of two major outlets for shopping-mall redevelopment, which only reopened in
December.

The Hussar Grill grew restaurant sales by 13.8% as the brand's higher-income customers proved more resilient in the weakening economy. The Hussar Grill has
successfully expanded into a national premium steakhouse brand from its regional roots in the Western Cape and been effective in diversifying the group's target
market.

International restaurant sales (excluding Captain DoRegos) increased by 12.1% on a constant exchange rate basis and by 12.7% in rand terms, driven largely by the
opening of 14 restaurants during the period. Trading in Mauritius, the Middle East and Africa has been buoyant, although the performance in certain African countries
was negatively impacted by political instability and volatile exchange rates. At a constant exchange rate, restaurant sales in Africa grew by 22.3% (47 outlets (2017:
39)), Mauritius by 21.2% (13 outlets (2017: 10)) and the Middle East by 69.9% (4 outlets (2017: 2)).

However, the performance in Australia and New Zealand continues to disappoint and restaurant sales declined by 16.8% for the six month period. Management is re-
evaluating its operations in these countries in the wake of the challenging trading conditions and high franchisee operating costs.

Restaurant expansion

The group continued its measured restaurant expansion programme and opened 39 outlets across all brands. In South Africa, 25 outlets were opened and six closed. In
addition, the group acquired the Nikos Coalgrill Greek chain which comprised six restaurants at the effective date of 1 August 2018 and opened two further outlets in
Gauteng during the period.

Fourteen international outlets were opened over the past six months. These include the group's first restaurant in India (Pune), being a RocoMamas outlet. The Hussar
Grill opened its first outlet in Saudi Arabia (Khobar). Seven Panarottis restaurants opened in Zambia, increasing the number of outlets in the country to 12. Other
restaurants were opened in Mauritius (Panarottis and RocoMamas), Botswana (RocoMamas), Namibia (Spur) and Saudi Arabia (RocoMamas). The group's international expansion
strategy focuses mainly on territories where the business has an established presence, in order to ultimately reach critical mass. However, new territories will be
considered where the group is able to secure a local partner with the necessary expertise, infrastructure and financial resources to open a set minimum number of
franchised restaurants, and where the local economic and political environment can support our presence.

Restaurant footprint at 31 December 2018

Franchise brand               South Africa  International  Total

Spur Steak Ranches                     289             38    327
Spur Grill & Go                          7              2      9
Panarottis Pizza Pasta                  86             20    106
Casa Bella                               7              -      7
John Dory's Fish Grill Sushi            53              3     56
The Hussar Grill                        20              2     22
RocoMamas                               70             11     81
Nikos Coalgrill Greek                    8              -      8
Total                                  540             76    616

FINANCIAL PERFORMANCE

Group revenue increased by 5.3% to R370.2 million, with revenue from the South African operations growing by 4.9% and international revenue by 12.1%.

Franchise revenue in Spur showed a strong recovery and increased by 12.2%. Pizza and Pasta grew by 5.4%, John Dory's 2.6%, The Hussar Grill by 5.7% and RocoMamas by
8.6%.

Local retail revenue, representing the group's interests in four The Hussar Grill restaurants and one RocoMamas outlet, declined by 2.2%. While The Hussar Grill
outlets performed well, turnover at RocoMamas in Green Point (Cape Town) declined by 31% for the period following the opening of a franchised RocoMamas restaurant in a
nearby suburb, which diverted takeaway and delivery business away from the Green Point outlet.

The manufacturing and distribution division grew revenue by 0.7%, impacted by lower volumes of product being procured through the group's outsourced distribution
system as an increasing proportion of products are now being made in the restaurants.

In the international division, the operations in Africa, Mauritius, the Middle East, India, Pakistan and Cyprus collectively increased revenue by 26.3%. Revenue in
Australasia was 32.6% lower.

Profitability in Australasia was negatively impacted by lower revenue and franchisee loan impairment losses of R2.9 million. This contributed to the international
division posting a loss of R2.0 million for the six month period.

Profit before income tax decreased by 0.8% to R130.0 million. This includes financial instrument impairment losses of R7.8 million (2017: nil), including an impairment
of R4.3 million relating to the Grand Parade Investments Limited black economic empowerment transaction funding and the Australian franchisee loans referred to above,
R1.6 million relating to the settlement of a legal dispute with a former franchisee in Zambia (previously disclosed as a contingent liability) and R1.4 million in
severance payments following a restructure in the group's decor manufacturing business. The previous comparable period includes a R10.6 million fair value loss on the
RocoMamas contingent consideration liability and a profit of R17.5 million on the disposal of the Braviz rib manufacturing facility.

Comparable profit before income tax, excluding exceptional and one-off items (including those listed above), increased by 12.4%.

Headline earnings declined by 11.2% to R83.9 million with diluted headline earnings per share 10.9% lower at 87.8 cents.

The interim dividend has been maintained at 63 cents per share.

PROSPECTS

The current pressure on consumer discretionary spending is expected to persist in the months ahead as the country's economic prospects remain weak. This is likely to
be compounded by rising utility and living costs, electricity load shedding and uncertainty ahead of the country's general election in May.

In this environment, management will maintain its focus on tight cost management, excellent product quality and supporting the profitability of franchisees.

The group plans to open at least 12 restaurants in South Africa in the second half of the financial year across Spur Steak Ranches (five), Panarottis (four), RocoMamas
(two) and Nikos (one).

Internationally, the group plans to open at least eight new restaurants. These include three outlets in Zambia (two Panarottis and one RocoMamas), a Spur in Namibia, a
Panarottis in Kenya and one new RocoMamas restaurant in each of Mauritius, Egypt and Cyprus.

CASH DIVIDEND

Shareholders are advised that the board of directors of the company has, on Wednesday, 27 February 2019, resolved to declare an interim gross cash dividend for the
six month period to 31 December 2018 of R68.343 million, which equates to 63 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 50.4 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 Limited, the relevant dates for the dividend are as follows:

Event                                                      Date
Last day to trade 'cum dividend'         Tuesday, 26 March 2019
Shares commence trading 'ex dividend'  Wednesday, 27 March 2019
Record date                               Friday, 29 March 2019
Payment date                               Monday, 1 April 2019

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, 27 March 2019 and Friday, 29 March 2019, both days inclusive.

For and on behalf of the board

A Ambor                 P van Tonder 
(executive chairman)   (group chief executive officer)

28 February 2019

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME
                                                                                                          
                                                                                 Restated+            
                                                                   Unaudited    unaudited                 
                                                                  six months   six months  
                                                                       ended        ended                  Restated+
                                                                 31 December  31 December           %    year ended         
R'000                                                                   2018         2017      change  30 June 2018
Revenue                                                              370 244      351 702         5.3       684 294
Gross profit                                                         271 302      252 023         7.6       490 296
Operating profit before finance income^                              113 881      115 650        (1.5)      197 481
Interest income*                                                      16 649       15 412                    31 322
Interest expense                                                        (10)         (17)                       (33)
Share of loss of equity-accounted investee (net of income tax)          (547)           -                     (1 813)
Profit before income tax                                             129 973      131 045        (0.8)      226 957
Income tax expense                                                   (42 214)     (33 580)                  (66 924)
Profit                                                                87 759       97 465       (10.0)      160 033
Other comprehensive income#                                              958       (1 129)                    3 433
Foreign currency translation differences for foreign operations        1 051       (1 028)                    3 617
Foreign exchange loss on net investments in foreign operations          (93)        (101)                      (184)

Total comprehensive income                                            88 717       96 336        (7.9)      163 466

Profit attributable to:
 Owners of the company                                                83 892       94 504       (11.2)      155 671
 Non-controlling interests                                             3 867        2 961                     4 362
Profit for the period                                                 87 759       97 465       (10.0)      160 033
Total comprehensive income attributable to:
 Owners of the company                                                84 850       93 375        (9.1)      159 104
 Non-controlling interests                                             3 867        2 961                     4 362

Total comprehensive income for the period                             88 717       96 336        (7.9)      163 466

Earnings per share (cents)
Basic earnings                                                         88.01        98.82       (10.9)       162.87
Diluted earnings                                                       87.80        98.66       (11.0)       162.56

^ Includes total impairment losses on financial instruments of R7.798 million (six months ended 31 December 2017: Rnil; year ended 30 June 2018: R6.618 million).
* Interest income comprises interest revenue calculated using the effective interest rate method.
# All items included in other comprehensive income are items that are, or may be, reclassified to profit or loss.
+ Refer note 2.2.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

                                                                                              Restated*    
                                                                                Unaudited    unaudited     Restated*
                                                                                    as at        as at        as at                              
                                                                              31 December  31 December      30 June
R'000                                                                                2018         2017         2018
ASSETS
Non-current assets                                                                495 313      599 837      605 752
Property, plant and equipment                                                      98 263       98 315      101 094
Intangible assets and goodwill                                                    368 508      361 870      362 709
Interest in equity-accounted investee (refer note 8)                                3 581            -        3 461
Loans receivable                                                                   20 773      133 970      132 816
Deferred tax                                                                          527        1 472        1 736
Leasing rights                                                                      3 661        4 210        3 936

Current assets                                                                    537 401      439 799      424 734
Inventories                                                                        15 216       16 485       15 702
Tax receivable                                                                     32 587       42 686       36 197
Trade and other receivables                                                       124 579      150 078       99 997
Loans receivable                                                                  110 446       17 098       12 943
Contingent consideration receivable (refer note 4)                                    594            -            -
Cash and cash equivalents                                                         253 979      213 452      259 895

Total assets                                                                    1 032 714    1 039 636    1 030 486

EQUITY
Total equity                                                                      858 055      850 384      854 673
Ordinary share capital                                                                  1            1            1
Share premium                                                                     294 663      294 663      294 663
Shares repurchased by subsidiaries                                               (122 597)    (106 412)    (107 202)
Foreign currency translation reserve                                               30 640       25 120       29 682
Share-based payments reserve                                                        5 224        2 950        3 731
Retained earnings                                                                 639 977      622 979      624 374
Total equity attributable to owners of the company                                847 908      839 301      845 249
Non-controlling interests                                                          10 147       11 083        9 424

LIABILITIES
Non-current liabilities                                                            83 619       83 440       84 423
Contract liabilities (refer note 2.2)                                              29 059       26 489       27 813
Operating lease liability                                                           3 227        2 969        3 919
Deferred tax                                                                       51 333       53 982       52 691

Current liabilities                                                                91 040      105 812       91 390
Bank overdrafts                                                                         -        3 484            -
Tax payable                                                                         1 781        1 318        1 067
Trade and other payables                                                           68 353       67 670       74 438
Loans payable                                                                      15 980       12 235       10 722
Contract liabilities (refer note 2.2)                                               4 255        4 115        4 532
Contingent consideration liability (refer note 11)                                      -       16 404            -
Shareholders for dividend                                                             671          586          631

TOTAL EQUITY AND LIABILITIES                                                    1 032 714    1 039 636    1 030 486

* Refer notes 2.2 and 17.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                                                                      Ordinary                
                                                                 share capital    
                                                                     and share       
                                                                       premium   Retained    
                                                                       (net of   earnings         Non-
                                                                      treasury  and other  controlling
R'000                                                                   shares)  reserves    interests        Total
Balance at 30 June 2017 (audited)                                      191 708    633 449       12 019      837 176
IFRS 15 change in accounting policy (refer note 2.2)                         -    (18 605)      (1 167)     (19 772)
Restated balance at 30 June 2017                                       191 708    614 844       10 852      817 404
Restated total comprehensive income for the year                             -    159 104        4 362      163 466
Profit for the year                                                          -    155 671        4 362      160 033
Other comprehensive income                                                   -      3 433            -        3 433
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 5.2)                          -      2 387            -        2 387
Own shares acquired                                                     (4 246)         -            -       (4 246)
Dividends                                                                    -   (118 548)      (5 790)    (124 338)

Balance at 30 June 2018                                                187 462    657 787        9 424      854 673
IFRS 9 adjustment on initial application (refer note 2.1)                    -    (10 126)         (21)     (10 147)
Adjusted balance at 1 July 2018                                        187 462    647 661        9 403      844 526
Total comprehensive income for the period                                    -     84 850        3 867       88 717
Profit for the period                                                        -     83 892        3 867       87 759
Other comprehensive income                                                   -        958            -          958
Transactions with owners recorded directly in equity
Contributions by and distributions to owners                           (15 395)   (56 670)      (3 840)     (75 905)
Equity-settled share-based payment (refer note 5.2)                          -      1 434            -        1 434
Indirect costs arising on intra-group sale of shares related 
to equity-settled share-based payment (refer note 5.2)                       -       (610)           -         (610)
Own shares acquired                                                    (15 395)         -            -      (15 395)
Dividends                                                                    -    (57 494)      (3 840)     (61 334)
Changes in ownership interests in subsidiaries                               -          -          717          717
Acquisition of controlling interest in business (refer note 4)               -          -          717          717

Balance at 31 December 2018                                            172 067    675 841       10 147      858 055


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS                                                             
                                                                                              Restated*              
                                                                                Unaudited    unaudited               
                                                                               six months   six months      Audited   
                                                                                    ended        ended   year ended
                                                                              31 December  31 December      30 June               
R'000                                                                                2018         2017         2018    
Cash flow from operating activities
Operating profit before working capital changes                                   130 166      122 623      224 787
Working capital changes                                                           (30 043)     (65 512)     (27 560)
Cash generated from operations                                                    100 123       57 111      197 227
Interest income received                                                           11 475       10 208       22 570
Interest expense paid                                                                 (10)         (17)         (33)
Tax paid                                                                          (37 937)     (33 513)     (60 646)
Dividends paid                                                                    (61 294)     (61 236)    (124 250)
Net cash flow from operating activities                                            12 357      (27 447)      34 868
Cash flow from investing activities
Additions of intangible assets                                                       (477)        (675)      (1 924)
Additions of property, plant and equipment                                         (2 121)      (2 772)     (10 291)
Cash outflow from share-based payment hedge (refer note 5.1)                            -      (13 740)     (13 740)
Loans advanced to franchisees                                                        (354)      (8 499)     (11 188)
Proceeds from disposal of associate (refer note 9)                                      -            -       17 500
Proceeds from disposal of property, plant and equipment                                 3          142          302
Repayment of loans receivable                                                       5 800        5 080       11 160
Increase in investment in associate (refer note 8)                                   (667)           -       (5 274)
Acquisition of business (refer note 4)                                             (5 012)           -            -
Net cash flow from investing activities                                            (2 828)     (20 464)     (13 455)
Cash flow from financing activities
Acquisition of treasury shares                                                    (15 395)      (3 456)      (4 246)
Settlement of contingent consideration (refer note 11)                                  -            -      (18 542)
Net cash flow from financing activities                                           (15 395)      (3 456)     (22 788)
Net movement in cash and cash equivalents                                          (5 866)     (51 367)      (1 375)
Effect of foreign exchange fluctuations                                               (50)        (127)        (192)
Net cash and cash equivalents at beginning of period                              259 895      261 462      261 462
Net cash and cash equivalents at end of period                                    253 979      209 968      259 895

Note
Total depreciation and amortisation included in profit before income tax for the period is R5.371 million (six months ended 31 December 2017: R5.620 million; year
ended 30 June 2018: R10.687 million).

* Refer note 17.

RECONCILIATION OF HEADLINE EARNINGS
                                                                                 Restated*           
                                                                   Unaudited    unaudited                 
                                                                  six months   six months  
                                                                       ended        ended                  Restated*
                                                                 31 December  31 December           %    year ended         
R'000                                                                   2018         2017      change  30 June 2018 
Total group
Profit attributable to owners of the company                          83 892       94 504       (11.2)      155 671
Headline earnings adjustments:
Profit on disposal of intangible assets (refer note 10)                    -            -                    (4 750)
Loss/(profit) on disposal of property, plant and equipment                10          (64)                     (156)
Income tax impact of above adjustments                                    (3)           -                        44
Amount of above adjustments attributable to 
non-controlling interests                                                  -            -                        (1)
Headline earnings                                                     83 899       94 440       (11.2)      150 808

* Refer note 2.2.

SHARE INFORMATION
                                                                                 Restated^           
                                                                   Unaudited    unaudited                 
                                                                  six months   six months  
                                                                       ended        ended                  Restated^
                                                                 31 December  31 December           %    year ended         
                                                                        2018         2017      change  30 June 2018 
Total shares in issue (000's)                                        108 481      108 481           -       108 481
Net shares in issue (000's)*                                          94 849       95 539        (0.7)       95 509
Weighted average number of shares in issue (000's)                    95 319       95 632        (0.3)       95 580
Diluted weighted average number of shares in issue (000's)            95 545       95 789        (0.3)       95 761
Headline earnings per share (cents)                                    88.02        98.75       (10.9)       157.78
Diluted headline earnings per share (cents)                            87.81        98.59       (10.9)       157.48
Net asset value per share (cents)                                     904.65       890.09         1.6        894.86
Dividend per share (cents)#                                            63.00        63.00           -        123.00

Reconciliation of weighted average number of shares 
in issue ('000's)
Gross shares in issue at beginning of period                         108 481      108 481                   108 481
Shares repurchased at beginning of period                            (12 972)     (12 812)                  (12 812)
Shares repurchased during period weighted for period 
held by the group                                                       (190)         (37)                      (89)
Weighted average number of shares in issue for the period             95 319       95 632                    95 580
Dilutive potential ordinary shares weighted for period 
outstanding (refer note 5.2)                                             226          157                       181
Diluted weighted average number of shares in issue for the period     95 545       95 789                    95 761

* 108 480 926 total shares in issue less 6 966 701 (as at 31 December 2017: 6 166 901; as at 30 June 2018: 6 196 901) shares repurchased by wholly-owned subsidiary
  companies, 6 164 698 (as at 31 December 2017 and 30 June 2018: 6 374 698) shares held by The Spur Management Share Trust (consolidated structured entity) and 500 000
 (as at 31 December 2017 and 30 June 2018: 400 000) shares held by The Spur Foundation Trust (consolidated structured entity).

# Refers to interim and final dividend declared for the respective financial year, as applicable.

^ Refer note 2.2.

OPERATING SEGMENT INFORMATION

                                                                                 Restated*           
                                                                   Unaudited    unaudited                 
                                                                  six months   six months  
                                                                       ended        ended                  Restated*
                                                                 31 December  31 December           %    year ended         
R'000                                                                   2018         2017      change  30 June 2018 
External revenue
Manufacturing and distribution                                       102 017      101 340         0.7       186 224
Franchise - Spur                                                     119 934      106 910        12.2       210 865
Franchise - Pizza and Pasta                                           19 442       18 454         5.4        35 931
Franchise - John Dory's                                               10 718       10 443         2.6        20 014
Franchise - Captain DoRegos (refer note a)                                 -        1 610      (100.0)        2 526
Franchise - The Hussar Grill                                           3 392        3 208         5.7         6 243
Franchise - RocoMamas                                                 17 487       16 101         8.6        31 300
Franchise - Nikos (refer note b)                                       1 567            -                      -
Retail (refer note c)                                                 34 354       35 144        (2.2)       69 534
Other South Africa (refer note d)                                     31 142       31 568        (1.3)       67 852
Total South African segments                                         340 053      324 778         4.7       630 489
Unallocated - South Africa (refer note e)                             12 390       11 046        12.2        23 258
Total South Africa                                                   352 443      335 824         4.9       653 747
Australasia                                                            2 613        3 876       (32.6)        7 118
Other International (refer note g)                                    15 000       11 876        26.3        23 180
Total International segments                                          17 613       15 752        11.8        30 298
Shared services - International                                          188          126        49.2           249
Total International                                                   17 801       15 878        12.1        30 547
TOTAL EXTERNAL REVENUE                                               370 244      351 702         5.3       684 294
Profit/(loss) before income tax
Manufacturing and distribution                                        34 288       33 523         2.3        61 050
Franchise - Spur                                                     100 349       89 923        11.6       176 328
Franchise - Pizza and Pasta                                           12 326       11 269         9.4        21 732
Franchise - John Dory's                                                5 067        4 858         4.3         9 409
Franchise - Captain DoRegos (refer note a)                                 -           15      (100.0)        4 604
Franchise - The Hussar Grill                                           2 729        2 431        12.3         4 790
Franchise - RocoMamas                                                 12 854       11 885         8.2        21 471
Franchise - Nikos (refer note b)                                         480            -                      -
Retail (refer note c)                                                  4 171        3 571        16.8         6 785
Other South Africa (refer note d)                                     (3 338)      (2 311)      (44.4)       (4 953)
Total South African segments                                         168 926      155 164         8.9       301 216
Unallocated - South Africa (refer note e)                            (36 426)     (25 934)      (40.5)      (65 352)
Total South Africa                                                   132 500      129 230         2.5       235 864
Australasia (refer note f)                                            (4 094)        (399)     (926.1)      (10 980)
Other International (refer note g)                                     6 768        5 405        25.2        10 378
Total International segments                                           2 674        5 006       (46.6)         (602)
Unallocated - International (refer note h)                            (4 654)      (3 191)      (45.8)       (6 492)
Total International                                                   (1 980)       1 815      (209.1)       (7 094)
PROFIT BEFORE INCOME TAX AND SHARE OF PROFIT OF 
EQUITY-ACCOUNTED INVESTEE                                            130 520      131 045        (0.4)      228 770
Share of loss of equity-accounted investee (net of income tax) 
(refer note 8)                                                          (547)           -                    (1 813)
PROFIT BEFORE INCOME TAX                                             129 973      131 045        (0.8)      226 957

* Refer note 2.2.

Notes
a) Franchise - Captain DoRegos - The business was disposed of with effect from 1 March 2018. The prior year to 30 June 2018 includes a profit on disposal of the trademark
   and related intellectual property attributable to the business of R4.750 million (refer note 10).

b) Franchise - Nikos - The business was acquired with effect from 1 August 2018 (refer note 4).

c) Retail - This segment comprises the group's interests in local restaurants consisting of four The Hussar Grill restaurants and one RocoMamas outlet.

d) 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. The profit in the current period includes retrenchments costs of R1.410 million attributable to the group's decor manufacturing
   business.

e) Unallocated - South Africa - Revenue includes marketing fund administration fee income (refer note 2.2). Profit includes:
                                                                                                    
                                                                                 Six months   Six months                        
                                                                                      ended        ended                       
                                                                                31 December  31 December      Year ended                                 
R'000                                                                Note              2018         2017    30 June 2018
Net finance income                                                                   16 244       15 044          30 537
Profit on disposal of Braviz funding instruments                        9                 -       17 500          17 500
Impairment loss - GPI receivable                                        3            (4 303)           -               -
Impairment loss - expected credit loss on other 
financial instruments                                                 2.1              (627)           -               -
Cash-settled share-based payment credit                               5.1                 -          885             885
Fair value loss on related economic hedge                             5.1                 -       (3 168)         (3 168)
Equity-settled share-based payment charge                             5.2            (1 493)      (1 138)         (1 919)
Contingent consideration fair value adjustment                     4 & 11                50      (10 607)        (12 745)
Profit/(loss) of Spur Foundation Trust, all of which is 
attributable to non-controlling interests                                               301           79            (907)

f) Australasia - The current period includes expected credit impairment losses of R2.913 million (refer notes 2.1 and 3). The prior year to 30 June 2018 includes an
   impairment loss of R6.753 million 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 8).

g) 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.

h) Unallocated - International - The current period includes the Zambia litigation settlement and related legal costs amounting to R1.641 million (refer note 12.2).
   Includes a foreign exchange loss of R0.432 million (six months to 31 December 2017: R0.174 million; year to 30 June 2018: R0.357 million).

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1  Basis of preparation

These unaudited interim condensed consolidated financial statements for the six months ended 31 December 2018 have been prepared in accordance with the JSE Limited
Listings Requirements for provisional reports and the requirements of the Companies Act of South Africa (No. 71 of 2008 amended). 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 these condensed consolidated financial statements are in terms of IFRS and are consistent with those applied in the preparation of the group's
consolidated financial statements for the year ended 30 June 2018, except for the adoption of new standards effective for financial periods commencing as from January
2018, as detailed in note 2 below. The group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

2  New accounting standards adopted by the group

2.1 IFRS 9 - Financial Instruments

IFRS 9 - Financial Instruments replaces IAS 39 - Financial Instruments: Recognition and Measurement for annual periods beginning on or after 1 January 2018, bringing
together all three aspects of the accounting for financial instruments: classification and measurement; impairment; and hedge accounting.

IFRS 9 was adopted without restating comparative information. The reclassifications and adjustments arising from the new impairment rules are therefore not reflected
in the statement of financial position as at 30 June 2018, but are recognised in the opening statement of financial position on 1 July 2018. The effect of adopting
IFRS 9 on the opening statement of financial position as at 1 July 2018 is as follows:
                               
                             Audited as at       IFRS 9        As at
R'000                         30 June 2018   adjustment  1 July 2018
ASSETS
Non-current assets
Loans receivable                   132 816      (6 884)      125 932
Current assets
Trade and other receivables         99 997      (2 875)       97 122
Loans receivable                    12 943      (1 193)       11 750

EQUITY
Retained earnings                  645 827     (10 126)      635 701
Non-controlling interests           10 919         (21)       10 898

LIABILITIES
Non-current liabilities
Deferred tax                        61 748        (805)       60 943

2.1.1 Changes to the group's accounting policies

Classification and measurement

Except for certain trade receivables, under IFRS 9, the group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs.

Under IFRS 9, debt financial instruments are subsequently measured at fair value through profit or loss ("FVPL"), amortised cost, or fair value through other
comprehensive income ("FVOCI"). The classification is based on two criteria: the group's business model for managing the assets; and whether the instruments'
contractual cash flows represent solely payments of principal and interest on the principal amount outstanding (the "SPPI criterion").

On 1 July 2018 (the date of initial application of IFRS 9) the group has classified its financial instruments into the following IFRS 9 categories.

                                                                                                                 IAS 39     IFRS 9        
                                                                                                               carrying   carrying               
                                                                              IAS 39           IFRS 9            amount     amount
Financial asset                                                       Classification   Classification             R'000      R'000 
Loans receivable                                               Loans and receivables   Amortised cost           145 759    137 682
Financial instruments included in 
trade and other receivables                                    Loans and receivables   Amortised cost            95 727     92 852
Cash and cash equivalents                                      Loans and receivables   Amortised cost           259 895    259 895

The new classification and measurement of the group's debt financial assets are at amortised cost as they are held within a business model with the objective to hold
the financial assets in order to collect contractual cash flows that meet the SPPI criterion.

The assessment of the group's business models was made as of the date of initial application, 1 July 2018, and then applied retrospectively to those financial assets
that were not derecognised before 1 July 2018. The assessment of whether contractual cash flows on debt instruments are solely comprised of principal and interest was
made based on the facts and circumstances as at the initial recognition of the assets.

The accounting for the group's financial liabilities remains largely the same as it was under IAS 39. Similar to the requirements of IAS 39, IFRS 9 requires contingent
consideration assets and liabilities to be treated as financial instruments measured at fair value, with the changes in fair value recognised in the statement of
profit or loss.

Impairment of financial assets

The adoption of IFRS 9 has fundamentally changed the group's accounting for impairment losses for financial assets by replacing IAS 39's incurred loss approach with a
forward-looking expected credit loss ("ECL") approach. IFRS 9 requires the group to record an allowance for ECLs for all loans and other debt financial assets not held
at FVPL.

ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the group expects to receive. The
shortfall is then discounted at an approximation to the asset's original effective interest rate.

For trade and other receivables, the group has applied the standard's simplified approach and has calculated ECLs based on lifetime ECLs. For debt financial assets,
the ECL is based on the 12 month ECL. The 12 month ECL is the portion of lifetime ECLs that results from default events on a financial instrument that are possible
within 12 months after the reporting date. However, when there has been a significant increase in credit risk since origination, the allowance will be based on the
lifetime ECL. In all cases, the group considers that there has been a significant increase in credit risk when contractual payments are more than 30 days past due. The
group considers a financial asset in default when contractual payment are 90 days past due. However, in certain cases, the group may also consider a financial asset to
be in default when internal or external information indicates that the group is unlikely to receive the outstanding contractual amounts in full before taking into
account any credit enhancements held by the group.

The adoption of the ECL requirements of IFRS 9 resulted in increases in impairment allowances of the group's debt financial assets. The increase in allowance resulted
in an adjustment to retained earnings.

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

The group determined that the application of IFRS 9's impairment requirements at 1 July 2018 resulted in an additional impairment allowance as follows:

                                                                                R'000
Loss allowance at 30 June 2018 under IAS 39                                     7 553
Trade receivables                                                                 800
Loans receivable                                                                6 753
Additional impairment recognised at 1 July 2018                                10 952
Trade receivables                                                               2 875
Loans receivable                                                                8 077

Loss allowance at 1 July 2018 under IFRS 9                                     18 505
Trade receivables                                                               3 675
Loans receivable                                                               14 830

In addition to, and as a result of, the adjustments described above, other items of the primary financial statements such as deferred taxes, income tax expense,
retained earnings, non-controlling interests and exchange differences on translation of foreign operations were adjusted as necessary.

2.2  IFRS 15 - Revenue from contracts with customers

IFRS 15 - Revenue from Contracts with Customers replaces IAS 18 - Revenue for annual periods beginning on or after 1 January 2018. 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 the entity
expects to be entitled in exchange for those goods and services.

The group has adopted this standard fully retrospectively as at the start of the earliest period presented (i.e. 1 July 2017). The consequential change in accounting
policy has therefore resulted in a restatement of the comparative figures on the statement of financial position, statement of profit or loss and comprehensive income,
statement of changes in equity and statement of cash flows as detailed below.

The effect of adopting IFRS 15 on the opening statement of financial position as at 1 July 2017 is as follows:

                                                  Audited          
                                                    as at        IFRS 15        As at
                                             30 June 2017     adjustment  1 July 2017
R'000 
EQUITY
Retained earnings                                 605 388        (18 605)     586 783
Non-controlling interests                          12 019         (1 167)      10 852

LIABILITIES
Non-current liabilities
Contract liabilities                                    -         23 637       23 637
Deferred tax                                       60 924         (7 689)      53 235
Current liabilities
Contract liabilities                                    -          3 824        3 824

The effect of adopting IFRS 15 on comparative information is as follows:

                                                               Unaudited                 Restated   Audited              Restated
                                                                   as at     IFRS 15        as at     as at   IFRS 15       as at
                                                                  31 Dec     adjust-       31 Dec   30 June   adjust-     30 June
R'000                                                               2017        ment         2017      2018      ment        2018
Statement of financial position
EQUITY
Foreign currency translation reserve                              25 016         104       25 120    30 022      (340)     29 682
Retained earnings                                                643 769     (20 790)     622 979   645 827   (21 453)    624 374
Non-controlling interests                                         12 432      (1 349)      11 083    10 919    (1 495)      9 424

LIABILITIES
Non-current liabilities
Contract liabilities                                                   -      26 489       26 489         -    27 813      27 813
Deferred tax                                                      62 551      (8 569)      53 982    61 748    (9 057)     52 691

Current liabilities
Contract liabilities                                                   -       4 115        4 115         -     4 532       4 532

                                                               Unaudited                 Restated   Audited      
                                                              six months               six months      year              Restated
                                                                   ended     IFRS 15        ended     ended   IFRS 15  year ended    
                                                                  31 Dec     adjust-       31 Dec   30 June   adjust-     30 June          
R'000                                                               2017        ment         2017      2018      ment        2018
Statement of profit or loss and comprehensive income
Revenue                                                          344 553       7 149      351 702   667 192    17 102     684 294
Gross profit                                                     244 874       7 149      252 023   473 194    17 102     490 296
Profit before income tax                                         134 333      (3 288)     131 045   231 368    (4 411)    226 957
Income tax expense                                               (34 501)        921      (33 580)  (68 159)    1 235     (66 924)
Profit                                                            99 832      (2 367)      97 465   163 209    (3 176)    160 033
Other comprehensive income                                        (1 233)        104       (1 129)    3 773      (340)      3 433
Total comprehensive income                                        98 599      (2 263)      96 336   166 982    (3 516)    163 466

Profit attributable to:                                           99 832      (2 367)      97 465   163 209    (3 176)    160 033
Owners of the company                                             96 689      (2 185)      94 504   158 519    (2 848)    155 671
Non-controlling interests                                          3 143        (182)       2 961     4 690      (328)      4 362
Total comprehensive income attributable to:                       98 599      (2 263)      96 336   166 982    (3 516)    163 466
Owners of the company                                             95 456      (2 081)      93 375   162 292    (3 188)    159 104
Non-controlling interests                                          3 143        (182)       2 961     4 690      (328)      4 362

Earnings per share (cents)                                        101.11       (2.28)       98.82    165.85     (2.98)     162.87
Diluted earnings per share (cents)                                100.94       (2.28)       98.66    165.54     (2.97)     162.56
Headline earnings                                                 96 625      (2 185)      94 440   153 656    (2 848)    150 808
Headline earnings per share (cents)                               101.04       (2.28)       98.75    160.76     (2.98)     157.78
Diluted headline earnings per share (cents)                       100.87       (2.28)       98.59    160.46     (2.97)     157.48

2.2.1 Changes to the group's accounting policies

Marketing fund administration fees

The group provides administrative services to various marketing funds, which are managed by the group on behalf of the respective bodies of franchisees in accordance
with the franchise agreements concluded between the group and independent franchisees, as more fully described in notes 2.1 and 39 on pages 118 and 171 respectively of
the annual integrated report for the year ended 30 June 2018.

The group charges the respective marketing funds for the administrative services provided. The amounts charged by the group were previously considered a recovery of
costs incurred by the group and as such were included in other income in the statement of profit or loss and other comprehensive income, and not revenue in accordance
with IAS 18. However, the group has a contractual obligation to perform the administrative services for the marketing funds in terms of the franchise agreements in the
ordinary course of the group's ordinary activities and is remunerated by the marketing funds for these services. The fees charged by the group for the administrative
services are therefore revenue for the purposes of IFRS 15. The fees have accordingly been reallocated from other income to revenue in the statement of profit or loss
and comprehensive income.

Initial franchise fees

Franchisees are charged an initial fixed value franchise fee by the group, as franchisor, upon signature of the franchise agreements concluded with independent
franchisees. The initial franchise fee is non-refundable. The franchise agreements oblige the group to undertake activities for the duration of the franchise agreement
to, inter alia, support the franchisee's brand, where such activities significantly affect the intellectual property to which the franchisee has rights, without
resulting in a transfer of specific goods or services. The group previously recognised revenue in respect of the initial franchise fees in full upon meeting the
recognition criteria of IAS 18, i.e. where the inflow of economic benefits was probable and the amount could be reliably measured. However, as the group's performance
obligation in relation to the initial franchise fee is satisfied over time, IFRS 15 requires that the revenue be recognised on a straight-line basis over the term of
the franchise agreement.
                                                                          Restated      
                                                                         unaudited    
                                                                        six months      Restated
                                                                             ended    year ended
                                                                       31 December       30 June
R'000                                                                         2017          2018
Adjustment to revenue upon adoption of IFRS 15
Marketing fund administration fees (reallocated from other income)          10 437        21 513
Initial franchise fees                                                      (3 288)       (4 411)
                                                                             7 149        17 102

In addition to, and as a result of, the adjustments described above, other items of the primary financial statements such as deferred taxes, income tax expense,
retained earnings, non-controlling interests and exchange differences on translation of foreign operations were adjusted as necessary.

3  Financial instrument impairments

                                                                      Unaudited at  Unaudited at  
                                                                       31 December   31 December    Audited at
R'000                                                                         2018          2017  30 June 2018
Loans receivable
Grand Parade Investments 1 (RF) (Pty) Ltd(1)
Gross carrying amount                                                      105 344        96 296       100 695
Impairment allowance                                                        (8 428)            -             -
 Transition to IFRS 9 recognised in retained earnings at 1 July 2018        (4 125)            -             -
 Current period impairment allowance                                        (4 303)            -             -

Net carrying amount                                                         96 916        96 296       100 695

Franchisees (foreign: Australian dollars) (Australia)(2)
Gross carrying amount at reporting date                                      4 486         7 096         7 531
Impairment allowance                                                        (2 512)            -        (2 916)
 Opening impairment allowance                                               (2 916)            -             -
 Transition to IFRS 9 recognised in retained earnings at 1 July 2018          (591)            -             -
 Current period impairment allowance                                        (1 921)            -        (2 916)
 Impairment allowance reversed against actual write off                      2 916             -             -

Net carrying amount                                                          1 974         7 096         4 615

Panawest Pty Ltd trading as Panarottis  MacArthur (Australia)(3)
Gross carrying amount                                                        4 987             -         5 196
Impairment allowance                                                        (4 987)            -        (3 837)
 Opening impairment allowance                                               (3 837)            -             -
 Current period impairment allowance                                        (1 150)            -        (3 837)

Net carrying amount                                                              -             -         1 359

Other loans receivable(4)
Gross carrying amount                                                       35 379        57 738        39 090
Impairment allowance                                                        (3 050)            -             -
 Transition to IFRS 9 recognised in retained earnings at 1 July 2018        (3 361)            -             -
 Current period impairment allowance                                           311             -             -

Net carrying amount                                                         32 329        57 738        39 090

Total net carrying amount                                                  131 219       161 130       145 759

1 Refer note 15.5 on page 144 of the annual integrated report for the year ended 30 June 2018.
2 Refer note 15.2 on page 143 of the annual integrated report for the year ended 30 June 2018.
3 Refer note 15.8 on page 145 of the annual integrated report for the year ended 30 June 2018.
4 Refer note 15 on page 142 of the annual integrated report for the year ended 30 June 2018.

The receivable from Grand Parade Investments 1 (RF) (Pty) Ltd ("GPIRF") was advanced in October 2014  to partially fund the acquisition by that entity of shares in
Spur Corporation Ltd as part of a broad-based black economic empowerment transaction. The receivable is secured by a reversionary interest in the Spur Corporation Ltd
shares, but ranks behind the debt owing by GPIRF to an external finance company. Based on the Spur Corporation Ltd share price at the reporting date, the value of the
shares held by GPIRF is insufficient to settle the group's receivable, in the event of default, after GPIRF has settled the external debt. Accordingly, an impairment
allowance has been recognised in the current period, in addition to the IFRS 9 transitional adjustment at 1 July 2018 (refer note 2.1).

Persistent difficult trading conditions in Australia have increased the financial pressure on franchisees in that country. In certain instances, the group has granted
payment holidays to these franchisees in order to assist their cash flow. During the period:

- The loan to Panarottis Currambine of R2.916 million which had been impaired at 30 June 2018, was written off following the liquidation of that entity.

- The franchisee of Apache Spur has defaulted on a loan of R2.326 million. In addition to the IFRS 9 transitional adjustment of R0.313 million, the remaining balance of
  the loan has been impaired in the current period.

- Panawest Pty Ltd defaulted on its loan. An impairment loss of R3.837 million was recognised in the prior year and the remaining balance of the loan has been impaired
  in full in the current period.

4  Nikos Acquisition

With effect from 1 August 2018, the group acquired 51% of the business of Nikos Coalgrill Greek ("Nikos"). At the effective date, Nikos operated six franchised
restaurants. The brand offers affordable, quality, artisanal Greek food in a contemporary dining environment, giving the group exposure to a market that its existing
brands did not cater for directly.

The fair value of the net assets acquired at the acquisition date amounted to:   R'000

Intangible assets (trademarks and related intellectual property)                 2 032
Deferred tax liability                                                            (569)
Total fair value of net assets acquired                                          1 463
Attributable to non-controlling interest                                          (717)*
Group's share of net assets acquired                                               746
Goodwill                                                                         3 722
Total consideration                                                              4 468
In cash                                                                          5 012
Contingent consideration                                                          (544)

* The non-controlling interest is measured as the non-controlling interest's proportionate share in the recognised amounts of identifiable net assets.

Deferred tax was measured by applying the effective tax rate applicable to taxable income in South Africa 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 R5.012 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 R6.112 million as at the effective date, the present value of which
is R4.468 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 asset measured at fair value of R0.544 million at the acquisition date (and R0.594
million at the reporting date) has been recognised in respect of the contingent consideration payable of R1.100 million. This is due to the fact that a significant
portion of the initial R5.012 million paid is expected to be refunded by the sellers on the first anniversary of the effective date.

In the event that the forecast EBITDA increases by 5% or decreases by 5%, the gross contingent consideration will increase to R1.405 million or decrease to R0.795
million respectively. The contingent consideration liability is designated as a level 3 financial instrument in terms of the IFRS 13 fair value hierarchy as inputs
into the valuation model are not based on observable market date. 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 22.08%, 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 receivable would have increased to R0.629
million or decreased to R0.451 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, amounting to R0.301 million are included in profit for the period.

From the date of acquisition, the business contributed R1.567 million revenue, profit before income tax of R0.369 million and profit after income tax of R0.262
million, of which R0.128 million is attributable to non-controlling interests. The acquired business has only been formally trading since July 2017. Had the group
acquired the business at 1 July 2018, the impact on the group's revenue and profit would not have been materially different to that reported.

5  Share Incentive Schemes

5.1 Previous (pre-April 2016) cash-settled share appreciation rights scheme

During the prior year, in December 2017, the fifth (and final) 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:

                                                                          Unaudited           Unaudited          
                                                                         six months          six months         
                                                                              ended               ended             Audited   
                                                                        31 December         31 December          year ended
                                                                               2018                2017        30 June 2018
R'000
Gross cash outflow on vesting of cash-settled rights                              -                   -                   -
Gross cash outflow from economic hedging instrument                               -             (13 410)            (13 410)
Payment of difference in guaranteed dividend to hedge counterparty                -                (330)               (330)
Net cash flow effect                                                              -             (13 740)            (13 740)
Share-based payment credit                                                        -                 885                 885
Fair value loss on economic hedging instrument                                    -              (3 168)             (3 168)
Net expense included in profit before income tax                                  -              (2 283)             (2 283)

Further details of the share appreciation rights and related hedges are detailed in notes 27 and 28 respectively on pages 157 and 158 respectively of the annual
integrated report for the year ended 30 June 2018.

5.2 New (post April 2016) equity-settled share incentive schemes

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 have been granted to certain senior managers and directors during the current and previous financial years. Further
particulars on the schemes as well as details of grants awarded in previous periods are included in note 21.4 on page 151 of the annual integrated report for the year
ended 30 June 2018.

During the current period, on 26 November 2018:

- 209 800 FSP shares were awarded to senior and middle management (excluding directors); and
- 3 189 176 SARs were awarded: 1 862 724 to executive directors; and 1 326 452 to senior management.

Existing treasury shares were used for the FSP shares granted during the period.

Number of shares/rights in issue:
                                                                          Unaudited           Unaudited          
                                                                         six months          six months         
                                                                              ended               ended                Audited   
                                                                        31 December         31 December             year ended
                                                                               2018                2017           30 June 2018
FSP shares
Balance at beginning of period                                              274 000             314 000                314 000
Granted during the period                                                   209 800                   -                      -
Forfeited during the period                                                  (4 000)            (24 000)               (40 000)
Balance at end of period                                                    479 800             290 000                274 000
Comprising
Tranche 1 (April 2016)                                                      133 000             141 000                133 000
Tranche 2 (April 2017)                                                      141 000             149 000                141 000
Tranche 3 (November 2018)                                                   205 800                   -                      -
SARs
Balance at beginning of period                                            3 868 045           4 590 889              4 590 889
Granted during the period                                                 3 189 176                   -                      -
Forfeited during the period                                                       -            (722 844)              (722 844)
Balance at end of period                                                  7 057 221           3 868 045              3 868 045
Comprising
Tranche 1 (April 2016)                                                    1 636 852           1 636 852              1 636 852
Tranche 2 (April 2017)                                                    2 231 193           2 231 193              2 231 193
Tranche 3 (November 2018)                                                 3 189 176                   -                      -


The terms of each tranche are as follows:
                                                                      First tranche       Second tranche         Third tranche
                                                                        (April 2016)        (April 2017)        (November 2018)

FSP
Grant date                                                             1 April 2016        3 April 2017        26 November 2018
Initial vesting date                                                   1 April 2019        2 April 2020        25 November 2021
Date from which shares may be traded                                  31 March 2021        1 April 2022        24 November 2023
Service condition                                                           3 years             3 years                 3 years
Performance conditions                                                         None                None                Personal
                                                                                                                    performance
Grant date fair value per share                                              R19.57              R23.03                  R15.35
SAR
Grant date                                                             1 April 2016        3 April 2017        26 November 2018
Initial vesting date                                                   1 April 2019        2 April 2020        25 November 2021
Date from which shares may be traded                                  31 March 2021        1 April 2022        24 November 2023
Service condition                                                           3 years             3 years                 3 years
Performance condition - return on equity ("ROE")                        Minimum 15%         Minimum 15%          Between 0% and
                                                                                                             100% vesting where
                                                                                                                 ROE is between
                                                                                                                     12.75% and
                                                                                                                         17.25%
Performance condition - earnings                                     Between 0% and      Between 0% and         Between 33% and
                                                                       100% vesting        100% vesting            100% vesting
                                                                   where comparable    where comparable          where adjusted
                                                                  headline earnings   headline earnings       headline earnings
                                                                  grows between CPI    grows between 0%  (including impairments) 
                                                                     and CPI+4% per      and CPI+4% per   grows between CPI and
                                                                 annum over initial  annum over initial   CPI+6% per annum over
                                                                     vesting period      vesting period  initial vesting period
Strike price per right                                                       R29.40              R33.15                  R23.13
                                                                                     
Grant date fair value per rights                                              R6.40               R5.36                   R4.91
No. of rights expected to vest based on meeting of non-market 
performance conditions                                                            -             197 112               1 410 732

The grant-date fair values of the forfeitable shares and share appreciation rights granted during the period were determined by an independent external professional
financial instruments specialist using a Black-Scholes European Call Option Model, based on the following assumptions:

Risk-free rate (based on R186 South African Government bond)                                                              7.48%
Expected dividend yield (based on historic dividend yield over historic period equivalent to vesting period)              5.47%
Expected volatility (based on historic volatility over historic period equivalent to vesting period)                     38.97%
Liquidity discount due to trade restriction (5 years in the case of FSP)                                                 19.59%
Liquidity discount due to trade restriction (2 years in the case of SAR)                                                  6.99%


The financial impact of the incentive schemes is summarised below:
                                                                                           Unaudited    Unaudited   
                                                                                          six months   six months  
                                                                                               ended        ended       Audited 
                                                                                         31 December  31 December    year ended
R'000                                                                                           2018         2017  30 June 2018
Cumulative share-based payment expense:
Balance at beginning of period                                                                 3 731        1 812         1 812
Share-based payment expense included in profit before income tax                               1 493        1 138         1 919
Balance at end of period                                                                       5 224        2 950         3 731

Income tax credit included in profit                                                             304          225           456
Income tax (charge)/credit included in equity (retained earnings)                                (59)         241           468
Capital gains tax arising on intra-group sale of shares charged to equity (retained earnings)    553            -             -
Transaction costs arising on intra-group sale of shares charged to equity (retained earnings)     57            -             -
Dilutive potential ordinary shares (FSP)                                                     226 105      156 607       180 950

As the performance conditions of the share appreciation rights, 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 periods reported.

6  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 118 and 171 respectively of the annual
integrated report for the year ended 30 June 2018.

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. During the prior 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 gross amount receivable was R30.344 million (31
December 2017: R29.557 million; 30 June 2018: R25.725 million). 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 R14.140 million (31 December 2017: R19.495 million; 30 June 2018: R14.332 million). Given that the
intercompany loan is only repayable from 1 July 2019, it is not anticipated that the Marketing Fund receivable will reduce significantly before then. The amount due
within 12 months of the reporting date of R1.999 million is classified as current, while the balance of the receivable  is classified as non-current, in the
consolidated statement of financial position.

7  Tax rate reconciliation

Material items that have an impact on the effective rate of income tax are listed below:
                                                                                                                      Restated     
                                                                                                        Unaudited    unaudited    
                                                                                                       six months   six months   
                                                                                                            ended        ended      Restated
                                                                                                      31 December  31 December    year ended
%                                                                                                            2018         2017  30 June 2018
South African normal tax rate                                                                                28.0         28.0          28.0
Non-deductible loan impairments (refer note 3)                                                                1.5            -           0.8
Non-deductible termination settlements                                                                        0.6            -           0.5
Non-taxable profit on disposal of Braviz loans  (refer note 9)                                                  -         (6.2)         (3.6)
Non-taxable dividend income                                                                                  (1.0)        (0.9)         (1.1)
Non-deductible fair value adjustment on RocoMamas contingent consideration liability (refer note 11)            -          2.3           1.6
Non-deductible other expenditure (capital items and items not in the production of income)                    1.3          1.0           1.7
Prior year underprovision                                                                                     0.4            -           0.1
Tax losses on which deferred tax not raised                                                                   0.3          0.3           0.6
Tax losses utilised on which deferred tax not provided                                                       (0.5)        (0.5)         (0.5)
Withholding taxes not recoverable                                                                             1.6          1.5           1.6
Other                                                                                                         0.3          0.1          (0.2)
Effective rate of tax                                                                                        32.5         25.6          29.5

8  Investment in Associate (RocoMamas Australia)

During the prior year, 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 prior year, the group advanced R5.274 million to RRA on loan
account for the purposes of capitalising the entity and in respect of which settlement is neither planned nor likely to happen in the foreseeable future. The purpose
of the investment 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 a subsidiary of RRA a master franchise agreement, in terms of which the entity was granted rights to exploit the RocoMamas trademarks
and related intellectual property in Australasia. RRA furthermore provided finance to another subsidiary of RRA in the prior year to build the first RocoMamas
restaurant in Australia, trading in Melbourne, which commenced trading in June 2018.

During the current period, further advances of R0.667 million were made to RRA on the same terms as above, to fund working capital of the business.

                                                                                                        Unaudited    Unaudited    
                                                                                                       six months   six months   
                                                                                                            ended        ended       Audited    
                                                                                                      31 December  31 December    year ended
R'000                                                                                                        2018         2017  30 June 2018
Carrying value of equity-accounted investee
Balance at beginning of period                                                                              3 461            -             -
Investment                                                                                                    667            -         5 274
Share of loss of equity-accounted investee (net of income tax)                                               (547)           -        (1 813)
Balance at end of period                                                                                    3 581            -         3 461

The loss in the current period relates to trading operations for the start-up business. The loss in the prior year related 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.

9  Prior year disposal of investment in associate (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 for R0.400 million. The group had previously advanced loans in the amount of R46.250 million to the entity, the full extent of which were impaired in the
financial year ended 30 June 2017.

During the prior year, 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 before income tax of R17.500 million, and a tax credit of R3.257
million was recognised in the period to 31 December 2017.

10  Prior year disposal of Captain DoRegos

During the prior year, with effect from 1 March 2018, the group concluded an agreement to dispose of the Captain DoRegos business, comprising largely of the Captain
DoRegos trademarks and related intellectual property, for a consideration of R4.750 million. The Captain DoRegos intangible assets had been impaired in full as at 30
June 2017. The transaction therefore resulted in a profit on disposal of R4.750 million included in profit before income tax in the prior period. No income tax was
applicable to the sale. Of the total consideration, R0.750 million was paid in cash in two instalments on 1 March 2018 and 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, subject to interest at two percent above the prime overdraft rate of interest. As
at the reporting date, the carrying amount of the receivable, included in loans receivable in the consolidated statement of financial position, was R3.611 million (30
June 2018: R4.042 million). The receivable is secured by guarantees from the purchaser and a trust which holds immovable property.

11  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 movement in the contingent consideration liability was as follows:

                                                                  Unaudited      Unaudited   
                                                                 six months     six months   
                                                                      ended          ended       Audited    
                                                                31 December    31 December    year ended
R'000                                                                  2018           2017  30 June 2018
Balance at beginning of period                                            -          5 797         5 797
Fair value adjustment recognised in profit before income tax              -         10 607        12 745
Payment made                                                              -              -       (18 542)
Balance at end of period (current)                                        -         16 404             -

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%.

12  Subsequent events

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

12.1 Dividend

A dividend of 63 cents per ordinary share in issue, amounting to R68.343 million, was declared by the board on 27 February 2019 and is payable on 1 April 2019.

12.2 Zambia litigation

As previously reported (refer note 44.2 on page 183 of annual integrated report for the year ended 30 June 2018), in 2012, Steak Ranches Ltd ("SRL") instituted action
against a wholly-owned subsidiary of the group, Steak Ranches International BV ("SRIBV"), a company incorporated and domiciled in The Netherlands, for allegedly
repudiating a franchise agreement previously concluded between the parties. SRL is an unrelated entity incorporated and domiciled in Zambia. SRIBV previously concluded
a franchise agreement with SRL for a franchised outlet in Zambia, but cancelled that agreement after SRL breached the terms of the agreement, as alleged by the board
of SRIBV.

SRL claimed special damages in the amount of USD648 152, pecuniary damages in the amount of USD4 236 041 and an unquantified amount of general damages arising out of
the alleged repudiation, together with interest and costs.

SRIBV defended the action, denying the repudiation of the franchise agreement. Following several years of stalled legal proceedings, the matter was finally resolved by
a court-ordered mediation on 30 January 2019. Giving consideration to the uncertainty, costs and time to litigate against a Zambian franchisee, under Zambian law and
in a Zambian court, the board of SRIBV concluded that it was in the interests of the company to agree to an amount of USD120 000 in full and final settlement of the
matter, without conceding on the legal merits of the case. Accordingly, a liability in the amount of R1.566 million has been recognised at the reporting date.

13  Contingent liabilities

13.1 Legal dispute with former Zambian franchisee

Refer note 12.2.

13.2 Other contingent liabilities

There have been no further changes to the status of other contingent liabilities referred to in note 44 on page 183 of the annual integrated report for the year ended
30 June 2018.

14  Fair value of 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 amounts 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 amounts
approximate their fair values.

15  Related parties

There have been no material changes in the nature or value of the related party transactions reported in note 42 on page 175 of the annual integrated report for the
year ended 30 June 2018.

16  Standards issued but not yet effective

As detailed in note 46 on page 191 of the annual integrated report for the year ended 30 June 2018, IFRS 16 - Leases will be effective for the group's financial year
ending 30 June 2020, and is expected to have a significant impact on the group's financial statements. This standard has not been early adopted in the preparation of
these interim condensed consolidated financial statements. No further progress has been made on the transition to this standard, subsequent to the preparation of the
consolidated financial statements for the year end 30 June 2018 referred to above.

17  Correction of error

As reported in note 7 to the condensed consolidated financial statements for the six month period to 31 December 2017, the group had advanced an amount of R29.000
million to the Spur Steak Ranches Marketing Fund in the six month period to 31 December 2017 (refer note 6 for further details of the loan).

The carrying amount of the loan, R29.557 million, was incorrectly reflected as a loan receivable (non-current) in the statement of financial position as at 31
December 2017, and the amount of R29.000 million was incorrectly reflected as a cash outflow arising from investing activities in the consolidated statement of cash
flows for the six month period ended 31 December 2017. The loan granted was a transaction between two wholly-owned subsidiary companies of the group, and should
accordingly have been eliminated on consolidation in accordance with IFRS 10 - Consolidated Financial Statements. The Marketing Fund Loan was reflected as a loan
payable of R10.062 million as at 31 December 2017, which should have been reflected as a loan receivable (non-current) of R19.495 million. The movement in the
Marketing Fund loan is a cash flow arising from operating activities in accordance with IAS 7 - Statement of Cash Flows and the R29.000 million should accordingly be
reflected as a change in working capital.

The impact of the restatement is detailed as follows:

                                                                  Unaudited      
                                                                      as at                    Restated  
                                                                31 December                   unaudited 
                                                                       2017                       as at
                                                              as previously    Correction   31 December        
                                                                     stated*     of error          2017*
R'000 
Statement of financial position
ASSETS
Non-current assets                                                  609 899      (10 062)      599 837
Loans receivable                                                    144 032      (10 062)      133 970

Total assets                                                      1 049 698      (10 062)    1 039 636

LIABILITIES
Current liabilities                                                 111 759      (10 062)      101 697
Loans payable                                                        22 297      (10 062)       12 235

Total equity and liabilities                                      1 049 698      (10 062)    1 039 636

                                                                  Unaudited        
                                                                 six months                   Restated
                                                                      ended                  unaudited       
                                                                31 December                 six months
                                                                       2017                      ended
                                                              as previously    Correction  31 December                
R'000                                                                stated      of error         2017*
Statement of cash flows
Cash flow from operating activities
Working capital changes                                             (36 512)     (29 000)      (65 512)
Cash generated from operations                                      144 032      (29 000)      115 032
Net cash flow from operating activities                               1 553      (29 000)      (27 447)

Cash flow from investing activities
Loan advanced to Spur Steak Ranches Marketing Fund                  (29 000)      29 000             -
Net cash flow from investing activities                             (49 464)      29 000       (20 464)

Net movement in cash                                                (51 367)           -       (51 367)

* Prior to change in accounting policy arising from adoption of IFRS 15 (refer note 2.2)

18  Changes in directors

Shareholders were advised on 16 November 2018 that Mr Mike Bosman was appointed to the board as an independent non-executive director with effect from 15 November
2018. Shareholders were further advised on 6 December 2018 that non-executive directors, Messrs Dean Hyde, Keith Getz and Keith Madders and Ms Prabashinee Moodley
retired by rotation from the board at that annual general meeting of the same date.

As announced on 23 February 2018, executive chairman of the board, Mr Allen Ambor, retires from the board on 28 February 2019.  The board has appointed Mr Mike Bosman 
as chairman of the board, effective 1 March 2019. Following his appointment as chairman, Mike has resigned from the audit committee with effect from 1 March 2019, and 
the board has appointed Mr Muzi Kuzwayo to the audit committee in his stead.

Administration

Directors
Executive Chairman:                   Allen Ambor
Chief Executive Officer:              Pierre van Tonder
Chief Operating Officer:              Mark Farrelly
Chief Financial Officer:              Phillip Matthee
Non-executive Directors:              Keith Getz (retired 6 December 2018); Keith Madders (retired 6 December 2018); Prabashinee Moodley (retired 6 December 2018)
Independent Non-executive Directors:  Mike Bosman (appointed 15 November 2018); Dean Hyde (retired 6 December 2018); 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 member of the Sasfin Group)

Website: www.spurcorporation.com

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