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SALIENT FEATURES SUMMARY SEGMENT ANALYSIS
Year ended Year ended
30 Sep 30 Sep % Southern Ireland and The SPAR
Rmillion 2023 2022 change Rmillion Africa SW England Switzerland Poland Group Ltd
THE SPAR GROUP LTD
Turnover¹ 149 324.3 135 609.1 10.1 Profit/(loss)
Turnover1 92 611.9 38 137.5 15 711.6 2 863.3 149 324.3
Operating profit 1 817.0 3 428.7 (47.0)
GROUP RESULTS
Gross profit 8 828.5 5 756.5 2 792.9 567.8 17 945.7
Earnings per share (cents) 208.6 1 118.2 (81.3)
Gross profit margin % 9.5 15.1 17.8 19.8 12.0
Headline earnings per share (cents) 606.6 1 160.5 (47.7) Operating profit/(loss) 1 217.6 1 062.3 236.8 (699.7) 1 817.0
Diluted headline earnings per 1.3 2.8 1.5 (24.4) 1.2
FOR THE YEAR ENDED 30 SEPTEMBER 2023 share (cents) 606.3 1 159.1 (47.7)
Operating margin %
Profit/(loss) before taxation 942.0 773.3 113.1 (849.2) 979.2
Dividend per share (cents) – 400.0 (100) Financial position
Total assets 27 724.5 18 678.1 13 192.6 2 000.6 61 595.8
¹ Turnover represents revenue from the sale of merchandise. Total liabilities 23 451.9 14 409.5 10 174.3 3 338.5 51 374.2 SPAR’S COMMITMENT TO
The weighted average number of ordinary shares (net of treasury shares) is 192 379 568 shares
(2022: 192 445 771). In respect of diluted headline earnings per share, the weighted average
Stores 2 523 1 485 363 208 4 579 THE FUTURE OF OUR BRAND
number of ordinary shares (net of treasury shares) is 192 450 389 (2022: 192 678 012). Net new/(lost) stores 14 46 (9) 28 79
AND OUR PLANET
PERFORMANCE OVERVIEW SAP IMPLEMENTATION UPDATE SHAREHOLDER DISTRIBUTION
The Group delivered turnover growth of 10.1%, increasing turnover to The Group commenced the launch of its new SAP software system at the South The Group has faced various challenges during the year. Consequently, the Board
R149.3 billion (2022: R135.6 billion). This is a commendable trading performance African central office in October 2022. The distribution centre in KZN was the believes it is prudent to not declare a dividend for the year ended
amid challenging markets with consumers under persistent financial pressure. first regional distribution centre to launch SAP, thereby limiting any risk to the 30 September 2023 (2022: 400.0 cents per share). The Board will consider future
All geographies experienced the challenges brought on by consumers dealing rest of the regions. The go-live at KZN commenced during February 2023. The dividend payments taking into account the prevailing macro and operating
with higher costs of living, driven by ongoing food price inflation, higher interest conditions going forward. Returning capital to shareholders in the form of
transition to SAP resulted in various go-live and integration issues, negatively
rates, fuel and energy costs during the reporting period. The SAP implementation dividends and responsible capital allocation remains a priority for the Board.
impacting distribution operations in KZN.
challenges at the KwaZulu-Natal (KZN) distribution centre (DC) and the
impairment of goodwill and intangible assets associated with SPAR Poland Actions were taken to improve supply to our retailers’ stores, including servicing OUTLOOK
significantly impacted overall profitability for the period. Consequently, the these stores from the Eastern Cape, South Rand and North Rand DCs, direct to
Group delivered an operating profit of R1.8 billion (2022: R3.4 billion). Of the In Southern Africa we are encouraged to see the positive momentum that is
store deliveries, as well as the increased use of supplier dropshipment channels. building, due to the deliberate changes that have been made and the pleasing
factors negatively impacting operating profit, approximately R1.4 billion is
The KZN DC resumed servicing all stores in the region as of August 2023. progress within the strategic focus areas, despite the various challenges the
considered non-recurring. Increased net finance costs due to rising interest
rates significantly impacted profit before tax. Diluted headline earnings per business has faced. The consumer environment is expected to remain constrained.
While the SAP solution is stable and performing consistently at the KZN DC, the However, SPAR’s private label strategy is well placed to offer better value for our
share declined by 47.7% to 606.3 cents. Given the various challenges, the board roll-out of SAP has been delayed in other Southern African regions until
of directors (Board) believes it prudent to not declare a final dividend for the year independent retailers and SPAR shoppers. The optimisation of the SAP system will
management is satisfied with the optimisation of the system at the KZN DC. The be a key focus area for the business.
ended 30 September 2023.
learnings during this transition phase have been immense.
In Ireland and South West England, increasing costs are expected to challenge retail
SPAR Southern Africa reported an increase in turnover of 5.1%. Trading was
The impact of the SAP implementation at KZN amounted to an estimated loss and hospitality operators’ profitability. Despite the challenges, the local management
negatively impacted by the general consumer environment as well as continued
of turnover of R1.6 billion and an estimated R720.0 million loss of profits for the teams look forward with confidence. All of our businesses and brands are in a strong
electricity load shedding. On a combined basis, core grocery and liquor turnover
period ended 30 September 2023. Furthermore, as a result of the change in position, and we will continue to have the benefit of wholesale acquisitions made in
increased by 6.1% for the period. Core grocery turnover including SPAR Encore,
2023, which will continue to deliver synergies as they are consolidated into our
increased by 7.1% and reflects the ERP system challenges experienced during approach towards the SAP implementation roll-out for the foreign regions, a
business.
the reporting period. Internally measured wholesale price inflation was 9.7% for write-off of R94.1 million in respect of the SAP ‘asset under construction’ has
the reporting period. Our building materials business, Build it, reported a decline been recognised. The Swiss management team is focused on strategic enablers to drive growth in this
in turnover of 4.3%, due to a shift in consumer spending towards the basic costs market, including a revised fresh strategy to drive increased footfall to neighbourhood
+10.1%
of living. The decline in turnover also reflects the state of the building sector Management believe that they have identified the key issues that resulted in the stores. This focus on factors within the business’s control means that the
Group turnover¹ which continues to be severely impacted by electricity load shedding. The
pharmaceutical business continued to deliver impressive sales performances
shortcomings of the KZN DC SAP roll-out and that they now have the right team
and resources in place to appropriately plan for future implementations in
management team is cautiously confident of an improved financial year ahead.
In respect of SPAR Poland, we are focused on achieving the best possible outcome
from both Pharmacy at SPAR and Scriptwise (specialised pharmacy), delivering Southern African regions. for all stakeholders and remain focused on the process of finding an appropriate
19.2% turnover growth for the reporting period. buyer for the business.
Ireland and South West England, represented by BWG Group, delivered strong BANKING FACILITIES For the Group, significant changes have been made at executive and Board level during
+79
trading performances across both markets. Turnover increased by 8.1% for the All financiers remain supportive of the Group and have agreed to amendments the year. While this has been an unsettling time for the business and its stakeholders,
reporting period in EUR terms, and by 21.9% in ZAR terms. All retail brands to banking covenants. The Group is not in breach of any financing covenants especially our employees, the changes being made are focused on modernisation and
delivered strong performances throughout the year, notwithstanding difficult the highest possible standards of corporate governance. We believe the changes
Net new stores trading conditions, including an increased regulatory environment, staff
at financial year end. At this stage, the Group does not intend to raise any
stores
capital from shareholders. The Group is currently considering various debt position the business well for the future, benefitting all stakeholders. A recovery is
shortages, rising operating costs and very strong competition. Our food underway and we are confident about the future of the Group.
structuring options.
services channel performed exceptionally well, boosted by a full recovery of the
hospitality sector and a consolidation of the market, with BWG Foods growing Mike Bosman Angelo Swartz
ahead of the industry and taking market share. The successful consolidation of Chairman Group CEO
acquisitions boosted growth for the wholesale business. In the United Kingdom,
CORPORATE INFORMATION
R1.8
Directors: MJ Bosman* (Chairman), SA Zinn* (Deputy Chairman), Date of release on SENS: 30 November 2023
Appleby Westward’s corporate retail division continued to benefit from the
acquisition of stores. AP Swartz (Group CEO), MW Godfrey (Group CFO), M Pydigadu
Operating profit (Group COO), LM Koyana*, P da Silva*, ST Naran*, GB Makhaya* ABOUT THIS ANNOUNCEMENT
billion
SPAR Switzerland’s turnover declined by 3.3% in CHF terms (an increase (* Independent non-executive) As the information in this announcement does not provide all of the details, any
of 13.6% in ZAR terms) against the prior comparative year, as it contended with
Company Secretary: S Ashokumar investment decision should be based on consideration of the consolidated annual
the dynamics of a post-pandemic marketplace, with consumers looking for
financial statements for the year ended 30 September 2023, which are accessible
better pricing either cross-border or locally with discounters. Furthermore, the THE SPAR GROUP LTD: (SPAR) or (the Group)
via the following JSE cloudlink:
transfer of a group of corporate stores to independent retailers during 2022 Registration number: 1967/001572/06
R6.2
negatively impacted retail sales in the current financial year. Owing to the https://senspdf.jse.co.za/documents/2023/jse/isse/SPP/FY23AFS.pdf
ISIN: ZAE000058517
contraction in the restaurant industry combined with consumers eating out less, and on the company’s website at:
Cash generated turnover from the TopCC cash and carry business was adversely impacted and JSE share code: SPP
https://thespargroup.com/wp-Content/uploads/2023/11/
billion
declined by 3.6% in CHF terms. Registered office: 22 Chancery Lane, Pinetown, 3600
from operations Transfer secretaries: JSE Investor Services (Pty) Ltd, PO Box 4844,
Annual_Financial_Statements_2023.pdf
SPAR Poland continued to experience a tough consumer environment. While The consolidated annual financial statements for the year ended 30 September 2023
Johannesburg, 2000
food inflation eased in the second half of the financial year, the Polish consumer were audited by PricewaterhouseCoopers Inc., who expressed an unmodified
remained under pressure and continued to shop around for the best deals. SPAR Auditors: PricewaterhouseCoopers Inc., Waterfall City Heliport, 4 Lisbon Ln,
opinion thereon.
Poland delivered turnover growth of 5.0% in PLN terms (19.9% in ZAR terms) Jukskei View, Midrand, 2090
Sponsor: One Capital, 17 Fricker Road, Illovo, 2196 The auditor’s unmodified audit report includes reportable irregularities in terms of
compared to the prior comparative year. At the end of September 2023, the
OUR PURPOSE
the Auditing Profession Act, No. 26 of 2005, which have been described in note 42
Board announced its decision that it believes it is in the best interests of the Bankers and Corporate Brokers: Rand Merchant Bank, a division of FirstRand to the annual financial statements.
Group and shareholders to engage in a process to sell its interests in Poland. Bank Ltd, PO Box 4130, The Square, Umhlanga Rocks, 4021
Consequently, goodwill and other intangible assets for this business have Attorneys: Garlicke & Bousfield, PO Box 1219, Umhlanga Rocks, 4320
to inspire people to do and be more been impaired for the year ended 30 September 2023.
WWW.THESPARGROUP.COM
