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A strategic move was made in the last quarter of the financial year to discontinue discount-based promotions at Spur Steak Ranches that drive franchisee revenue and replace them with value add promotions that reward customer loyalty and better support franchisee profitability.

Spur Corporation’s results for the 2017 financial year reflect the ongoing challenging economic and operating environment. Trading was fair for the first nine months of the financial year, but worsened considerably from the end of March following the cabinet reshuffle that led to the firing of the finance minister and the downgrading of South Africa’s credit rating to junk status, which had a significant impact on consumer sentiment. The incident at a Spur restaurant in Johannesburg in March 2017 also contributed to weaker trading in the last quarter of the financial year in Spur Steak Ranches. The group’s response to this incident is discussed in detail on our website here.

In a high margin franchise business such as ours, a sub-inflation growth in revenue, as realised during this financial year, has a profoundly negative impact on the bottom line. With employment costs comprising the majority of the group’s expense base, there is little opportunity to adjust costs in the short term to compensate. The problem is exacerbated since intellectual property management businesses, including Spur Corporation, are heavily dependent on relevant key skills and it is critical for our remuneration offering to remain competitive, which typically requires above-inflation related increases in employment costs. Following a benchmarking study concluded in the prior year, we implemented employment cost adjustments on 1 July 2016 in our operational management teams. While these were well above inflation, they were necessary to bring remuneration back into line with industry norms, retain key skills and maintain a motivated work force. These factors combined have had a negative impact on the group’s operating margin.

A strategic move was made in the last quarter of the financial year to discontinue discount-based promotions at Spur Steak Ranches that drive franchisee revenue and replace them with value add promotions that reward customer loyalty and better support franchisee profitability. This is likely to have a short-term impact on group turnover and profitability since franchise fee income is calculated on franchisee turnover. However, the focus on supporting franchisee margins is necessary in the current economic climate to ensure that we have sustainable franchisees and therefore a sustainable franchise business into the future.

The financial performance of Braviz, the rib manufacturing plant in which the group has a 30% interest, continued to disappoint. Operational issues at the plant, which led to inferior product quality, resulted in declining sales volumes. This put the company in severe financial distress, to the extent that the recoverability of our shareholder funding is in doubt. We have accordingly impaired the loan, as detailed below.

In our manufacturing division, input costs increased significantly due to the effects of the drought and the rand’s depreciation against the dollar, which affected the price of sugar, tomato paste, cooking oil and spices. The impact of the economic decline on franchisees meant that we were unable to recoup these increases in input costs from franchisees.

Trading for Captain DoRegos continues to be negatively affected by the extreme financial strain experienced by lower-income consumers who have been particularly hard-hit by the economic slowdown, high food cost inflation and increases in transport costs. The reduced profitability of the division led to an impairment of the remaining value of the intellectual property assets.

On a positive note, our Australian operations performed creditably and our expansion into Africa progressed as we grew our footprint in particular in the East African region. The group’s exit from its UK and Ireland operations was concluded during the year.

We opened a further eight RocoMamas outlets to meet the strong demand for its unique product offering, and increased our shareholding in the RocoMamas business from 51% to 70% with effect from 1 April 2017.

Total restaurant sales from continuing operations increased by 4.2% to R7.2 billion (2016: R6.9 billion) which benefitted from new outlets in John Dory’s, The Hussar Grill and RocoMamas. This growth figure excludes the group’s operations in the UK and Ireland, which ceased trading from 30 June 2016 and are disclosed as discontinued operations in the financial statements.

Sales from existing restaurants (i.e. excluding the impact of new businesses) increased by only 1.1%, due largely to the decline in turnover in the Spur brand in the final quarter of the financial year as referred to above. For the first three quarters of the financial year, total local restaurant sales increased by 7.9% on the prior year, but declined 6.6% in the fourth quarter. Spur restaurants increased sales by 1.9% up to March 2017 relative to the prior year, but declined 14.9% in the three months to June 2017, while growth in other brands moderated to a lesser extent.

Group revenue from continuing operations increased by 2.4% to R648.0 million (2016: R633.1 million) and group profit before income tax from continuing operations declined by 14.9% to R210.7 million (2016: R247.6 million).

Group operating profit before finance income (including share of profit/loss of equity-accounted investee (net of income tax)) did not achieve the 2017 target of R273.8 million, primarily due to:

  • The impairment loss recognised in respect of the shareholder funding in the Braviz manufacturing facility.
  • The impairment of the Captain DoRegos intellectual property.
  • The low growth in revenue arising from lower than anticipated franchised restaurant turnover during the last quarter of the financial year.
  • The increased employment costs necessary to retain key operations skills.
  • Other one-off and exceptional items listed in the comparable profit table.

There are a number of one-off and exceptional items that affect comparability of group profit before income tax and headline earnings per share. These are reconciled in the tables here and here on this report. Adjusting for these distortions, comparable profit before income tax declined by 8.7%, comparable profit before finance income declined by 10.3% and comparable headline earnings per share declined by 8.3%.

The target of 10.0% growth in comparable profit before finance income was not achieved, and operating margin and return on equity both declined due to the same factors that affected operating profit.

Financial performance

The table below reconciles profit before income tax to comparable profit before income tax, with an explanation for these adjustments on the following page. The table shows key items included in the calculation of profit and is not intended to indicate sustainable or maintainable profit.

% change  
Profit before income tax   214 775    218 720  (1.8)
Exclude (profit)/loss from discontinued operation (UK) (4 084)    28 847   
Profit before income tax – continuing operations   210 691    247 567  (14.9)
Abnormal bad debts  986    –   
Foreign exchange loss  799    3 769   
Impairment losses  50 970    18 969   
Trading results of company-owned restaurants  284    3 790   
RocoMamas contingent consideration  777    (3 723)  
Share appreciation rights cost (net of related hedge) 1 996    25 353   
Share appreciation rights cost (actual net cost amortised on straight-line basis) (4 313)   (7 198)  
Share incentive scheme (new equity-settled forfeitable share plan and share appreciation rights schemes) 985    827   
Spur Foundation  1 206    259   
Comparable profit before income tax   264 381    289 613  (8.7)
Net finance income  (36 522)   (35 602)  
Comparable profit before finance income   227 859    254 011  (10.3)

Item 2017 2016
Abnormal bad debts A loan to the Captain DoRegos marketing fund was forgiven during the year.  
Foreign exchange Realised and unrealised exchange differences relating predominantly to the group’s international operations.
Impairment losses R44.192 million relates to the impairment of the Braviz shareholder funding as detailed in note 15 on page 119 of the consolidated financial statements. R6.778 million relates to the impairment of the Captain DoRegos trademark and related intellectual property intangible assets as detailed in note 14 on page 116 of the consolidated financial statements. Related to the impairment of the Captain DoRegos trademark and related intellectual property intangible assets as detailed in note 14 on page 116 of the consolidated financial statements.
Trading results of company-owned restaurants Trading results of company-owned The Hussar Grill in Morningside and RocoMamas in Green Point which commenced trading in September 2015 and November 2015 respectively. Trading results (including set-up costs not qualifying for capitalisation) relating to The Hussar Grill in Morningside and RocoMamas outlet in Green Point amounted to R1.302 million and R1.881 million respectively. In addition, the relocation of the company-owned The Hussar Grill, from Green Point to Mouille Point, resulted in costs of R0.607 million for the year. Refer
note 36 on page 138 of the consolidated financial statements.
RocoMamas contingent consideration The purchase consideration for the acquisition of RocoMamas is determined as five times RocoMamas’ profit before income tax in the third year following the date of acquisition. IFRS requires a liability to be recognised at fair value for this contingent consideration. Any change in the fair value is recognised in profit. Refer note 23 on page 129 of the consolidated financial statements.
Share appreciation rights cost (net of related hedge) (long-term share-linked employee retention scheme) Comprises a share-based payment credit of R3.795 million (2016: R2.361 million), net of a loss on the related hedging instrument of R5.791 million (2016: R27.714 million) – see notes 24 and 25 on pages 130 and 132 respectively of the consolidated financial statements.
Share appreciation rights cost (long-term share-linked employee retention scheme) (actual net cost amortised on straight-line basis) The vagaries of the IFRS treatment of the share appreciation rights and related hedging instruments create significant volatility in earnings. The purpose of the hedge is to fix the cost of the scheme at the commencement of each tranche of rights, on the assumption that the vesting date share price exceeds the original grant date share price. The economic cost to the group of the transaction, should it be amortised on a straight-line basis over the vesting period of each tranche, amounts to R4.313 million (2016: R7.198 million). Refer note 25 on page 132 of the consolidated financial statements.
Share incentive scheme (new equity-settled forfeitable share plan and share appreciation rights schemes) The equity-settled share-based payment expense relating to the new forfeitable share plan and share appreciation schemes implemented in April 2016. Refer note 21.4 on page 126 of the consolidated financial statements.
Spur Foundation While the Spur Foundation is required to be consolidated in terms of IFRS, the full profit/loss is attributable to non-controlling interests. As the Spur Foundation is a non-profit entity, any previous years’ profits will be used to fund expenditure in future years. The losses for the current and previous financial years relate to the disbursement of funds received, and previously recognised as income, in an earlier year.


The effective tax rate from continuing operations increased to 36.4% (2016: 30.9%) due largely to the impairment loss of the Braviz shareholder loan that is not tax deductible.

The effective tax rate is greater than the corporate tax rate of 28% due to:

  • the Braviz loan impairment, which is not tax deductible;
  • listings-related and trademark related costs that are not deductible; and
  • local and foreign withholding taxes.
Comparable headline earnings reconciliation  2017 
% change 
Headline earnings – as reported  133 863    163 977  (18.4)
Exclude headline earnings from discontinued operation (UK) 1 218    18 350   
Headline earnings from continuing operations  135 081    182 327  (25.9)
Abnormal bad debts  986    –   
Foreign exchange loss  776    2 826   
Impairment losses  44 192    –   
Trading results of company-owned restaurants  318    2 486   
RocoMamas contingent consideration  777    (3 723)  
Share appreciation rights cost (net of related hedge) 1 437    18 255   
Share appreciation rights cost (actual net cost amortised on straight-line basis) (3 105)   (5 183)  
Share incentive scheme (new equity-settled forfeitable share plan and share appreciation rights schemes) 665    720   
Comparable headline earnings  181 127    197 708  (8.4)
Weighted average number of ordinary shares (’000) 95 828    95 955  (0.1)
Comparable headline earnings per share (cents) 189.01    206.04  (8.3)

Earnings per share from continuing operations declined by 22.4% to 135.6 cents (2016: 174.6 cents) and headline earnings per share from continuing operations declined by 25.8% to 141.0 cents (2016: 190.0 cents). The declines are due to the items listed in the tables above and the lower than expected trading results.

Comparable headline earnings per share decreased by 8.3%. Dividend per share declined by 5.7% to 132 cents (2016: 140 cents). The group’s dividend policy remains unchanged at a payout of 80% of headline earnings adjusted for exceptional and one-off items. It is our intention to maintain this policy.

  Revenue    Profit before income tax    Operating margin 
Segmental performance  2017 



Manufacturing and distribution  181 834    180 750  0.6    66 243    68 486  (3.3)   36.4    37.9  (1.5)
Spur  217 918    229 953  (5.2)   188 047    206 052  (8.7)   86.3    89.6  (3.3)
Pizza and Pasta  35 471    32 501  9.1    22 967    22 064  4.1    64.7    67.9  (3.2)
John Dory’s  19 699    18 528  6.3    9 715    9 558  1.6    49.3    51.6  (2.3)
Captain DoRegos  2 812    4 534  (38.0)   (8 040)   (17 851) 55.0    (285.9)   (393.7) 107.8 
The Hussar Grill  4 733    3 607  31.2    4 092    2 789  46.7    86.5    77.3  9.2 
RocoMamas  23 809    17 415  36.7    16 457    12 210  34.8    69.1    70.1  (1.0)
Retail  63 569    48 139  32.1    4 633    927  399.8    7.3    1.9  5.4 
Other segments  62 851    61 905  1.5    (3 188)   1 198  (366.1)          
Unallocated  3 269    2 617  24.9    (93 794)   (53 071) (76.7)          
Total South Africa  615 965    599 949  2.7    207 132    252 362  (17.9)   33.6    42.1  (8.5)
UK (discontinued) –    104 302  (100)   4 084    (28 847) 114.2           
Australasia  9 870    10 948  (9.8)   (111)   3 177  (103.5)          
Other segments  22 181    22 172  –    8 991    10 955  (17.9)          
Unallocated  –    –  –    (5 345)   (10 326) 48.2           
Total international  32 051    137 422  (76.7)   7 619    (25 041) 130.4    23.8    (18.2) 42.0 
Total  648 016    737 371  (12.1)   214 751    227 321  (5.5)   33.1    30.8  2.3 

Operating margin in the manufacturing and distribution segment declined due to the increase in input costs following from the weaker rand and the drought. Growth in revenue was slower than restaurant turnover growth as price increases to franchisees were limited to support franchisee profitability.

Increases in franchise revenue in the franchise divisions were largely in line with restaurant turnovers, with some exceptions. The increase in revenue in RocoMamas lagged the increase in franchised restaurant turnover due to the inclusion of once-off initial franchise fees in the prior year where 33 new restaurants were opened compared to eight in the current year. Similarly, revenue for John Dory’s included initial franchise fees from eight stores in 2016 relative to four in the current year. The decline in revenue from Captain DoRegos is due to the closure of eight outlets during the year, as well as the strategic decision to reduce the franchise fee model from 5% to 3.5% in the latter half of the prior year, as reported last year, in an effort to sustain the franchise model. The decline in revenue for Spur Steak Ranches exceeded the decline in restaurant turnovers due to abnormally high temporary franchise fee concessions granted in the last quarter of the financial year. From April 2017 revenue declined 25.2% year on year, compared to a decline in restaurant sales of 14.9% for the same period. These formed part of the financial support package extended to franchisees alluded to in the chairman’s and CEO’s report to support franchisees financially in an effort to trade out the weak economy. With the exception of The Hussar Grill, margins declined in all franchise divisions due to the adjustments to operational management team remuneration referred to at the start of this report and the impact of lower than expected revenues. The margin in The Hussar Grill benefitted from the economies of scale associated with trading more restaurants.

The loss before income tax for Captain DoRegos includes a further impairment of the trademark and related intellectual property as well as a write off of the loan to the marketing fund which was forgiven. Excluding these write offs, the brand’s operating margin reduced from 24.6% to -9.8%, which is directly related to the lower revenue and adjusted employment costs.

The margin of the retail division improved as the negative impact of initial trading losses and set-up costs that did not qualify for capitalisation in the prior year were not repeated. These related to the new The Hussar Grill in Morningside and RocoMamas in Green Point, as well as the relocation costs and lost profit during the relocation of The Hussar Grill in Green Point.

The “Other segments” category of the South Africa segmental results includes the group’s décor manufacturing, export, radio station, training and call centre businesses. With the exception of the export business, the other businesses are not intended to make significant profits as they are functions provided to support franchisees. The decline in profitability is partially attributable to a R1.2 million decline in profit from the décor manufacturing business due to reduced store openings and fewer store revamps relative to the prior year during this low economic growth period. There was also a R3 million increase in the loss from the group’s training division as we invested in further training initiatives at low cost to franchisees. While the new training initiatives resulted in a greater loss to the group, the improved efficiency and effectiveness of training methods, and reduced costs to franchisees are necessary to ensure the long-term sustainability of franchisees.

Local franchise operating profit margin  2013 
Manufacturing and distribution  27.9  33.1  38.6  37.9    36.4 
Spur  88.5  88.9  89.3  89.6    86.3 
Pizza and Pasta  59.2  62.7  68.6  67.9    64.7 
John Dory’s  56.6  54.2  56.2  51.6    49.3 
Captain DoRegos  41.8  26.4  (194.5) (393.7)   (285.9)
The Hussar Grill  –  67.3  53.7  77.3    86.5 
RocoMamas  –  –  63.7  70.1    69.1 


Unallocated South Africa loss before income tax includes:

  • net finance income of R35.8 million (2016: R34.8 million);
  • the Braviz shareholder loan impairment of R44.2 million;
  • the impact of the long-term share-linked employee retention and incentive schemes;
  • the net income of The Spur Foundation Trust; and
  • the fair value adjustment relating to the RocoMamas contingent consideration liability.

The group’s cost base increased ahead of inflation largely due to increased depreciation costs relating to the new head office building, salary adjustments effected on 1 July 2016 following the benchmarking study in the prior year, and increased IT-related costs as the business grows in size and complexity.

The UK segment comprised the franchise business and company-owned outlets that ceased all activities by 30 June 2016. The profit shown in the current year arises from the derecognition of
the remaining liabilities of the entities that commenced with voluntary liquidation proceedings in July 2016.

Since last year, the Australasian segment operates exclusively as a franchise business. Revenue in the region declined from R10.9 million to R9.9 million as the slump in commodity prices impacted on the economies of certain of the regions within Australia in which we trade. The loss for the year is due to the decline in revenue, abnormal marketing costs in an effort to restore revenue growth in the region and additional operational costs incurred in opening our first outlet in New Zealand. We see New Zealand as a potential growth market and spent significant resources in ensuring that the launch of the brand in New Zealand was successful.

Revenue from other international segments, comprising largely the African operations, remained flat in rand terms, but increased by 8.5% on a comparable exchange rate basis, benefitting from the opening of new businesses. Much of the growth was realised in Mauritius. The African continent is plagued by political uncertainty, stagnant economic growth generally, and a weakening of many of the currencies of the countries in which we trade. The margin contraction is due to the significant increase in travel costs related to developing and expanding the group’s footprint in Africa and the Middle East, which has not yet been offset by a corresponding increase in revenue. This is part of the investment in exploring new potential markets. We also incurred significant costs in the current year relating to the set up of new stores, in respect of which the initial franchise fee was received in the prior year. Excluding the timing difference between the receipt of the initial franchise fee and the costs incurred relating to the new stores, profit for the division declined by 4.0% in rand terms, but increased 5.7% on a comparable exchange rate basis.

Unallocated international loss before income tax includes a foreign exchange loss of R0.7 million (2016: R3.8 million). Excluding this adjustment, the loss reduced by 29.5% in rand terms and by 23.6% on a comparable exchange rate basis. The improvement is largely due to consulting and legal costs incurred in the prior year relating to the group’s international restructure in 2014.

Financial position

Group total assets of R991.2 million declined from R1.1 billion in the prior year due the impairments of the Braviz loan receivable and Captain DoRegos intangible assets, lower receivables reflecting lower revenue, and reduced cash balances.

The tax receivable of R41.5 million includes R22.0 million of taxes and interest paid in respect of additional assessments issued by SARS relating to the 2004 to 2009 share incentive scheme which are being disputed, as referred to below. It also includes overpayments of provisional tax as the financial performance of the group in the final quarter of the financial year was lower than expected, and withholding tax credits relating to foreign jurisdictions.

The fair value of the forward purchase contracts used to hedge the liability arising from the cash-settled share appreciation rights in issue decreased from R12.2 million in the prior year to R10.6 million at 30 June 2017. The contracts are out of the money as the share price has not increased above the forward price of the contracts. The contract that expired in December 2016 resulted in an outflow of R7.4 million for the year. The liability in respect of the related share appreciation rights has reduced from R7.8 million in the prior year to R0.9 million at 30 June 2017, following the settlement of the fourth tranche of share appreciation rights in December 2016 of R3.1 million and a reduction in the share price.

The acquisition of 51% of RocoMamas in 2015 led to the raising of a contingent consideration liability. The purchase consideration is determined as five times the profit before income tax of the business for the 12-month period ending 28 February 2018, with an initial payment of R2.0 million made on the acquisition date of 1 March 2015. Interim payments (or refunds, as the case may be) are scheduled for the first, second and third anniversary dates of the acquisition and calculated as five times the profit before income tax of each anniversary period less any previous payments made. The second interim payment of R18.3 million was settled in cash during the year (2016: R20.4 million), taking the total paid to date to R40.6 million. The fair value of the contingent consideration liability at 30 June 2017 was R5.8 million (2016: R23.3 million). The total purchase consideration is estimated at R47.2 million compared to the prior year estimate of R52.8 million. The reduction arises principally from a downward revision in the number of stores to be rolled out over the initial three-year period, a moderation of the expected growth in turnover of existing businesses in light of the state of the local economy as well as an upward revision of costs necessary to sustain operations and provide a platform for future growth.

With effect from 1 April 2017, the group acquired an additional 19% of RocoMamas, to increase its holding to 70%, at a cost of R14.0 million.

Loans payable include marketing contributions collected by the group’s marketing funds from franchisees, net of marketing expenditure incurred by the funds for the benefit of their respective bodies of franchisees. In terms of the group’s franchise agreements, unspent marketing contributions are to be used for the exclusive benefit of the respective bodies of franchisees. The payables in this regard declined from R24.6 million to R6.9 million as marketing contributions declined in line with franchised restaurant turnovers.

Trade and other payables declined for the year largely due to the disposal of the UK liabilities upon the commencement of voluntary liquidation of the entities in July 2016.

The group acquired an additional 165 000 treasury shares at an aggregate cost of R5.0 million. The group intends continuing to repurchase shares in the financial year ahead, provided that the repurchases remain earnings enhancing. The group’s financial position remains ungeared with no formal external borrowings.

Cash generated from operations declined by 3.1% to R234.7 million (2016: R242.2 million) in response to the lower than anticipated trading performance. Working capital increased by R1.5 million, largely attributable to the decline in the marketing fund loans payable referred to above.

Capital expenditure 2017
Maintenance 10 983   9 890
Expansion 2 709   35 808
Total 13 692   45 698

Capital expansion includes R2.7 million (2016: R26.9 million) relating to the construction of the new corporate office in Century City, Cape Town which commenced in the prior year and was concluded early in the new financial year. The building was commissioned as the group had outgrown its existing head office in Century City. Maintenance capital expenditure is anticipated to remain consistent in the financial year ahead.

Tax queries

During prior years, SARS issued the group with additional assessments totalling R22.0 million, following the disallowance of a deduction claimed regarding the group’s 2004 share incentive scheme. The assessments were settled in cash in prior years, but objected to and referred to alternate dispute resolution (“ADR”) proceedings. ADR proceedings with SARS failed to result in a compromise between the parties and the matter will now be referred to court. A date has yet to be set for the income tax court to hear the matter. The board, in consultation with its tax advisors, remains confident that it will be able to prove that SARS has erred in disallowing the deduction and consequently, no liability has been raised in respect of the assessments issued to date.

More information on this matter is available in note 44.1 on page 159 of the consolidated financial statements.

Long-term share-linked employee retention scheme

A long-term share-linked incentive scheme was implemented in December 2010 in terms of which a maximum of 1.5 million cash-settled share appreciation rights are issued to senior management each financial year. The obligation regarding these rights is hedged to the extent possible to mitigate the liquidity risk associated with the share appreciation rights. A number of forward purchase transactions were accordingly concluded to hedge the possible cash outflow resulting from the rights. The hedge is only effective if the share price appreciates above the forward price of the contracts.

On the assumption that this is the case, the cost per tranche of rights issued is essentially fixed as the difference between the grant date strike price of the rights issued and the forward price of the contracts. IFRS requires the share appreciation rights liability to be fair valued at each reporting date and charged to profit over the vesting period of the rights. The underlying economic hedging instrument is fair valued at each reporting date, with the full change in fair value immediately recognised in profit.

This difference in accounting for the changes in fair values of the rights and hedging contracts creates an accounting mismatch, which is excluded in the comparable profit measures reported above. However, the scheme does have a cost to the group, which is added to the comparable profit measures referred to in the table above. The table below demonstrates the normalised impact of the scheme over the vesting periods of the respective rights:

Grant date Dec 2012 Dec 2013 Dec 2014 Total
Vesting date Dec 2015 Dec 2016 Dec 2017  
Number of rights granted (’000) 1 500 1 500 1 500  
Grant date strike price (R) 21.29 30.38 30.91  
Forward price (R) 25.64 37.57 35.94  
Total cost (R’000) 6 525 10 785 7 545  
Annualised cost (R’000) 2 175 3 595 2 515  
Annualised cost 2016 (R’000) 1 088 3 595 2 515 7 198
Annualised cost 2017 (R’000) 1 798 2 515 4 313

In 2015, shareholders approved two new share schemes, a retention forfeitable share scheme plan and an incentive share appreciation rights scheme, to replace the existing cash-settled share appreciation rights employee retention scheme. Both schemes are equity-settled, have an initial three-year vesting period, and a subsequent two-year lock-in period during which the participants are restricted from trading in the shares that have vested. The vesting of the share appreciation rights is subject to performance criteria linked to return on equity and growth in comparable headline earnings per share relative to inflation. The new schemes are more aligned with the recommendations of King III. The schemes were implemented in April 2016, and accordingly, no further cash-settled share appreciation rights were granted during the year.

The accounting for the new schemes is much simpler, in that the grant-date fair value of the shares and rights granted are expensed evenly over the vesting period, resulting in less volatility on earnings.

Further details of all share schemes are included in the remuneration committee report.


The current challenging trading conditions in South Africa are not expected to improve in the short term. The group continues to identify good opportunities in Africa, the Middle East and Australasia, as well as opportunities to grow in the local market through our strong existing brands and new store formats.

Ronel van Dijk
Chief financial officer