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SALIENT FEATURES SPAR Switzerland’s turnover declined by 4.3% in CHF terms (increased by 6.9% in
ZAR terms) against the prior comparative period. Food retailers across Switzerland
Unaudited Unaudited
six months six months remain under pressure due to continued loss of volumes relative to the extraordinary
ended ended gains made during the pandemic when the Swiss borders were closed. Wholesale
31 March 31 March %
turnover increased by 2.0% in CHF terms, impacted by the transfer of petro-
THE SPAR GROUP LTD Rmillion
Turnover¹
2023
72 924.6
2022
67 605.2
change
7.9
convenience corporate stores to independent retailers during 2022. Owing to the
Operating profit 1 512.0 1 832.0 (17.5) contraction in the restaurant industry caused by high costs of energy, goods and
Earnings per share (cents) 425.3 605.5 (29.8) labour, coupled with consumers eating out less, turnover from the TopCC cash and
UNAUDITED INTERIM RESULTS
Headline earnings per share (cents) 447.9 642.6 (30.3) carry business was adversely impacted and declined by 2.6% in CHF terms.
Diluted headline earnings
per share (cents) 447.7 641.1 (30.2) SPAR Poland made considerable progress during the period. The extension of the
FOR THE SIX MONTHS ENDED Dividend per share
Net asset value per share
(cents)
(cents)
–
5 576.0
175.0
4 373.9
–
27.5 distribution centre in Czeladz was completed and the benefits of the extended
SPAR’S COMMITMENT
31 MARCH 2023 1
Turnover represents revenue from the sale of merchandise.
range have been well received by retailers. SPAR Poland delivered turnover growth
of 4.9% in PLN terms (9.3% in ZAR terms), compared to the prior comparative TO THE FUTURE OF OUR BRAND
SUMMARY SEGMENT ANALYSIS period. SPAR’s strategy to invest in price has been well received by retailers, AND OUR PLANET
improving SPAR’s competitiveness in the marketplace and against the backdrop of
The SPAR very high inflation which continues to place pressure on consumer disposable
Southern Switzer- Group income. The growth in retailer loyalty and reduction in operating loss is encouraging. software implementation challenges remains an urgent priority for the business and for
R72.9 billion Group Rmillion Africa Ireland land Poland Ltd Retailer loyalty for the country has improved from 48% to 60% at period end. our retailers in the KZN region. Operational and capital expenditure discipline and
+7.9% (2022: R67.6 billion) turnover1 Profit/(loss) improved working capital are critical focus areas for management.
Turnover1 47 101.8 17 102.5 7 337.1 1 383.2 72 924.6 FOCUS ON GOVERNANCE In the European regions, the summer months are traditionally positive months for retail
Gross profit 4 698.7 2 551.9 1 286.9 278.4 8 815.9
Gross profit margin % 10.0 14.9 17.5 20.1 12.1 Shareholders are hereby reminded of the changes to the board, which took place trading and hospitality sector growth. BWG Group plans to build on the momentum
Operating profit/(loss) 1 022.8 436.7 110.0 (57.5) 1 512.0 during the reporting period and the board is pleased to report the progress in delivered during the first half of the financial year across both markets and will focus
R1.5 billion Operating Operating margin %
Profit/(loss) before taxation
2.2
918.7
2.6
314.3
1.5
57.6
(4.2)
(114.7)
2.1
1 175.9
respect of the composition of the board in line with the King IV code on corporate on the execution of its new EUROSPAR supermarket strategy in Ireland. The Swiss
-17.5% (2022: R1.8 billion) profit Financial position
governance. In December, a new independent non-executive director was
appointed chairman, currently acting as executive chairman until a group CEO has
team is focused on growth through new business opportunities, and strict cost
discipline to improve profitability will be key in the months ahead. The board is
Total assets 28 134.4 17 471.1 12 338.2 2 491.1 60 434.8
been appointed. In February, one long-serving independent non-executive director considering business options in Poland and will announce its decision in due course.
Total liabilities 22 948.1 13 734.4 9 670.6 3 353.7 49 706.8
stepped down and a non-executive director and the group CEO retired. The
Given the cost pressures across all markets, retailer profitability remains a key
Diluted headline process to find a new group CEO is well underway and the board is conscious of
447.7 cents earnings per PERFORMANCE OVERVIEW the uncertainty caused during this period. The executive chairman continues to fulfil
focus for all management teams. SPAR retailers are resilient. We salute them for
facing these challenges and playing a positive role within their communities, while
-30.2% (2022: 641.1 cents) SPAR delivered a commendable trading performance amid challenging an important role supported by the chairman’s committee in supporting the country
share environments. Turnover for the group increased by 7.9% to R72.9 billion. Over the CEOs and addressing the group opportunities and challenges. Two new
continuing to operate against headwinds that remain outside of their control. We
will continue to provide the necessary support they need during these testing
past 12 months, all regions have come under considerable inflationary cost independent non-executive directors were appointed, selected for their specific
times and remain focused on the opportunities identified.
pressures. The cost pressures, coupled with SAP software go-live challenges at the skillsets. In May, SPAR also appointed a new company secretary, dedicated to
Net asset value
KwaZulu-Natal distribution centre (KZN DC) and subsequent loss of turnover during The board is positive about the future of the SPAR business.
5 576.0 cents the latter half of the period, resulted in a decline in operating profit of 17.5% to
supporting the board and committees in further elevating governance within the
group. The former company secretary will focus on environmental, socio-economic
+27.5% (2022: 4 373.9 cents) per share R1.5 billion. Due to rising interest rates across all geographies, finance costs on debt and other governance matters as SPAR’s dedicated ESG executive, driving Mike Bosman Mark Godfrey
and overdrafts have increased relative to the prior comparative period. Diluted headline
SPAR’s commitment to the future of our brand and our planet. An independent Executive Chairman Chief Financial Officer
earnings per share declined by 30.2% to 447.7 cents. In light of the challenges,
non-executive director has been appointed deputy chair of the board.
the board of directors (board) believes it prudent not to declare an interim dividend. Date of release on SENS: 14 June 2023
+58 stores Net new stores SPAR Southern Africa reported an increase in turnover of 5.6%, which was negatively SHAREHOLDER DISTRIBUTION ABOUT THIS ANNOUNCEMENT
impacted by a constrained consumer environment exacerbated by high levels of Recognising the challenges facing the group, the board believes it is prudent not This short-form announcement is the responsibility of the directors and is only a
electricity loadshedding, the high base effect of liquor sales in the prior comparative to declare an interim dividend for the period ended 31 March 2023 summary of the information in the full announcement and does not contain full or
period, the loss of turnover from the SAP software go-live challenges experienced at the (2022: 175.0 cents per share). The board will revisit this decision going forward, complete details.
OUR PURPOSE
KZN DC, as well as a weaker trading performance from Build it. The SPAR core grocery
taking into consideration the prevailing macro and operating conditions at
business reported sales growth of 7.9% against internally measured wholesale price The full announcement can be found on SENS at
the time. Returning capital to shareholders in the form of dividends and
inflation of 10.8%. SPAR’s on demand shopping platform, SPAR2U, was available in https://senspdf.jse.co.za/documents/2023/JSE/ISSE/SPP/Interim_23.pdf
to inspire people to do and be more 234 sites at the end of March 2023. TOPS at SPAR liquor business reported a decline
responsible capital allocation remains a priority for the board.
in wholesale turnover of 1.9% for the period (against extraordinary growth of 41.6% in The full announcement is also available on the company’s website at
OUTLOOK https://thespargroup.com/ and copies may also be requested from the company’s
the prior comparative period). On a combined basis, core grocery and liquor turnover
increased by 6.5% for the period. Build it reported a decline in turnover of 3.8%, which In Southern Africa, management remain focused on strategic growth areas to drive registered office and at the office of the JSE sponsor, One Capital, at no charge,
is reflective of the intense slowdown in the building sector, with the manufacturing of turnover, and have seen a positive uptick in sales post the period end. While conditions during office hours. Any investment decision by investors and/or shareholders in
building materials severely impacted by the increased levels of electricity loadshedding. are expected to remain tough, management is taking action to reduce the impact relation to the company’s shares should be based on consideration of the full
The pharmaceutical business, S Buys Pharmacy at SPAR, continued to deliver excellent thereof and will continue to attract consumers through real value house brand offerings. announcement. The information contained in this short-form announcement has
sales performances from both Pharmacy at SPAR and Scriptwise (specialised SPAR’s new strategy for private label is being launched. Resolving all outstanding SAP neither been audited nor reviewed by the company’s external auditors.
pharmacy), delivering 20.0% turnover growth for the period.
BWG Group (Ireland and South West England) delivered another strong trading
CORPORATE INFORMATION
performance with turnover increasing by 8.8% for the period in EUR terms, and Directors: MJ Bosman (Executive Chairman), JA Canny*, PMP da Silva*, MW Godfrey, LM Koyana*, M Mashologu*, ST Naran*, AG Waller* (Lead independent),
15.1% in ZAR terms. Both markets experienced the continued challenges brought SA Zinn* (Deputy Chairperson)
on by consumers dealing with higher costs of living, driven by ongoing food price (* Independent non-executive)
inflation, higher interest rates and energy costs. In Ireland, all retail brands performed Company Secretary: S Ashokumar THE SPAR GROUP LTD: (SPAR) or (the company) or (the group) Registration number: 1967/001572/06 ISIN: ZAE000058517
strongly. The foodservices business was boosted by a full recovery of the hospitality
JSE share code: SPP Registered office: 22 Chancery Lane, PO Box 1589, Pinetown, 3600
sector, which was restricted for parts of the prior comparative period due to the
Transfer secretaries: JSE Investor Services (Pty) Ltd, PO Box 4844, Johannesburg, 2000
COVID-19 pandemic restrictions. Furthermore, recently acquired small wholesale
Auditors: PricewaterhouseCoopers Inc., Waterfall City Heliport, 4 Lisbon Ln, Jukskei View, Midrand, 2090 Sponsor: One Capital, 17 Fricker Road, Illovo, 2196
businesses were successfully integrated during the period, adding to the positive
performance in this region. In the United Kingdom, Appleby Westward’s corporate Bankers and corporate brokers: Rand Merchant Bank, a division of FirstRand Bank Ltd, PO Box 4130, The Square, Umhlanga Rocks, 4021
retail division benefitted from the acquisition of stores during the period, and the Attorneys: Garlicke & Bousfield, PO Box 1219, Umhlanga Rocks, 4320
# 16828
WWW.THESPARGROUP.COM wholesale business reported solid growth.
