The SPAR Group has published its financial results for the six months ended March 2024, reporting a 7.9% increase in its total turnover for continuing operations (excluding SPAR Poland) to R77.2 billion.
The Group also reached a significant milestone in signing key salient terms with a party to purchase the SPAR Poland operations.
“We have made significant progress in respect of the priorities for the Group. This includes staying on track with our timeline to dispose of the Group’s interests in SPAR Poland and we expect to have finalised this process by September this year. We have been focused on achieving the best possible outcome for all stakeholders,” comments SPAR Group CEO, Angelo Swartz.
While SPAR’s trading performance has been mixed, the Group delivered an increased operating profit of R1.6 billion for their continuing operations comprising SPAR SA, BWG Group in Ireland, South West England, and SPAR Switzerland. The continuing operations generated cash of R1.4 billion for the period, an increase of more than 50% against 2023’s comparative period, with a reduction in net debt year-on-year.
SPAR Southern Africa delivered strong grocery retail sales of 7.1% with growth of 13.5% for its liquor business, TOPS at SPAR.
“Although SPAR is a wholesale business, retail sales are a better representation for industry comparison than wholesale. A resilient retail performance is indicative of the strength and relevance of the SPAR brand, and we are confident that our retailers remain at the heart of the communities they serve,” notes Swartz.
Sales from SPAR’s SA private label business increased by 7.6% with the offering now tiered to match consumer’s budgets.
Locally, SPAR’s on-demand shopping offering app, SPAR2U, was available in 420 sites at the end of March 2024, up from 356 sites in September 2023. On demand sales volumes for the six-month period led to a stellar increase of 463% versus the same period in the prior year.
SPAR’s pharmaceutical business, S Buys Pharmacy at SPAR, continued to deliver double-digit sales growth of 15% while Build It delivered a marginal positive uptick in trading, reflecting the subdued construction industry. It continues to hold its position as the number one building materials retailer in SA.
Turning to SPAR’s continuing operations in Europe, Swartz says that the BWG Group in Ireland and South West England delivered a solid trading performance despite challenging business environments in both markets. “Supported by improved gross profit margin management and cost-saving initiatives, SPAR Switzerland delivered strong profitability against the prior comparative period, reporting an increase in operating profit of 9.9% in local currency.”
“The significant changes made at Group executive and Board levels continue to drive a new strategic era in terms of how things are done at SPAR. There is a new wave of energy across the business, focused on shifting the culture towards executing at speed with greater accountability. We believe this shift will enable the business to compete more effectively by offering enhanced support to SPAR’s independent retailers so that our retailers can focus on what they do best – winning the hearts of the customers within the communities they serve.”