SPAR payout increases

Spar Group CEO Graham O’Connor. Picture: JACKIE CLAUSEN
Spar Group CEO Graham O’Connor. Picture: JACKIE CLAUSEN

SPAR Group has hiked its half-year payout to shareholders by 5.2% on the back of a strong performance in the six months to end-March.

The retailer, which operates in Southern Africa, Ireland and Switzerland, said on Wednesday interim profit after tax fell 2.7% to R1bn, largely because finance costs rose on foreign exchange movements.

When stripping out those costs, normalised headline earnings per share increased by 7.5%, “which is more reflective of the group’s performance”.

Total turnover grew 8.6% to R54.3bn, despite tough trading markets across all sectors.

SPAR Southern Africa contributed growth in wholesale turnover of 7.7%, with food price inflation rising to 1.9%.

“The Tops liquor brand again delivered excellent results with wholesale sales growth of 19.3%,” SPAR said.

The building materials business, Build it, grew wholesale turnover by 8.3%.

The store network in the region grew to 2,308 from 2,236 stores previously.

SPAR’s Irish business “delivered solid euro-denominated results, with all retail brands continuing to report good turnover growth”.

That unit benefited from the acquisitions of the 4 Aces wholesale business and Corrib Foods.

Meanwhile, despite making real progress in addressing strategic issues, SPAR Switzerland missed profitability expectations amid an aggressive marketing campaign.

SPAR said trading conditions in Southern Africa were likely to remain extremely competitive.

“Indications are that food prices will increase, while most measures continue to suggest that consumer spending will remain under pressure.”

Elsewhere, the threat of Brexit to the Irish economy had temporarily diminished.

“Management remains positively cautious in its outlook for the remainder of the year and believes that adequate plans are in place to respond to any market changes, thereby ensuring that SPAR Ireland will again deliver results in line with expectation.”

In Switzerland, a far stronger second half result was expected.

SPAR’s first-half dividend rose to 284c a share from 270c previously.

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