Spar to join A2X, quit Poland by September

Completing the exit from Polish market, fixing the group’s balance sheet and optimising the SAP system are key priorities

Spar’s new CEO, Angelo Swartz
Spar’s new CEO, Angelo Swartz
Image: Leon Hugo

Wholesaler Spar is the latest company to seek a secondary listing on A2X.

The company said on Wednesday that its shares would be admitted to trade on the A2X exchange on May 15.

It would retain its listing on the JSE’s main board, and its JSE listing and issued share capital would be unaffected by the secondary listing on A2X, it said in a statement.

A2X is a licensed stock exchange authorised to provide a secondary listing venue for companies and is regulated by the Financial Sector Conduct Authority and the Prudential Authority of the Reserve Bank.

On Tuesday, Kore Potash, an Australian company listed in SA, Australia and on London’s Alternative Investment Market, also announced it would have a secondary listing on A2X.

Business Day reported in March that Spar’s new CEO, Angelo Swartz, said the company was looking to complete its exit from the Polish market by September, in a move that would free up about R500m in yearly core earnings to shore up its domestic business.

This is as the company battles to recover from the botched rollout of SAP software in its key KwaZulu-Natal market.

Swartz admitted that testing the software on it biggest market was a “strategic blunder”.

During a frank interaction with the media, Swartz admitted to past “own goals” by the group, which resulted in a 53% plunge in the company’s share price in the past five years.

He outlined key priorities for the business moving forward, with the foremost being completing the exit from Poland, fixing the group’s balance sheet and optimising the SAP system.

He talked about what initially attracted the group to the Polish market, resulting in it raking up debt along the way.

Part of the attraction was Poland’s similarity to the SA market.

Spar made its foray into Poland in 2019. It bought an 80% stake in retailer Piotr i Pawel and converted the existing stores to Spar-branded outlets.

But the deal did not meet expectations and in September Spar announced the sale of the loss-making business.

Swartz said the imminent deal to dispose of the business would allow the group to invest more in its SA business.

“The exit from Poland frees up about R500m in earnings before interest and taxes (ebit); R500m has been our average ebit loss.

“What that does for us is to make us R500m more a year ... and we focus more on our home market,” Swartz said.

Proceeds from the sale are also expected to reduce debt. — BusinessLIVE 


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