| Thu 27 Feb 2025, 11:54 | | THE SPAR GROUP LIMITED - Trading update for the 18 weeks to 31 January 2025 |
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Trading update for the 18 weeks to 31 January 2025
The SPAR Group Limited
(Incorporated in the Republic of South Africa)
Registration number: 1967/001572/06
JSE and A2X share code: SPP
ISIN: ZAE000058517
("SPAR" or the "Group")
TRADING UPDATE FOR THE 18 WEEKS TO 31 JANUARY 2025
The Group continued to navigate a challenging trading environment across our geographies with
total sales from continuing operations decreasing by 1.6% for the 18 weeks ended
31 January 2025 (the "period"). Despite lower sales due to constrained consumer spending in
all our regions, the Group demonstrated resilience and has seen continued positive momentum
in improving operating margin levels through focused cost control and promotional activities.
ZAR Turnover growth 18 weeks ended
31 January 2025
(% change)
Grocery 0.6
TOPS/Liquor 1.9
Combined grocery and liquor 0.8
Build it 7.3
SPAR Health 13.3
Southern Africa 1.6
BWG Group (Ireland and South West England) (6.7)
Switzerland (9.0)
Group (1.6)
SPAR Southern Africa
• Retail sales grew by 3.4% across our 2,029 supermarket and liquor stores, with same
store sales growth of 3.0%, slightly ahead of national inflation.
• Growth was particularly robust in our lower-income grocery stores with subdued growth
in our middle- and higher-end stores.
• Sales growth was impacted by the planned closure of 13 grocery stores in our South
Rand Region, lower levels of promotional activity and erratic supply into Mozambique
for our grocery business.
• Additionally, operating losses from corporate grocery and liquor stores were reduced
during the period due to improved performance and the closure of non-performing
stores.
• SPAR's on demand shopping platform, SPAR2U, delivered solid growth in order
volumes of 285% compared to the prior comparative period.
• We continue to focus on cost control and margin management to mitigate the muted
top line growth.
• Build it delivered solid top-line growth of 7.3% with similar growth experienced at retail.
• The pharmaceutical business delivered strong turnover growth of 13.3%, attributable
to a strong performance in Wholesaler and Scriptwise sales.
• Through targeted interventions, SAP architectural modifications and a comprehensive
understanding of the system, KwaZulu-Natal ("KZN") has experienced a positive
recovery. Loyalty levels continue to improve and both gross profit and trading profit
margins have seen a recovery, achieving four consecutive months of profitability.
• Despite the disappointing topline growth for South Africa, lower promotional activity,
improvements in KZN, and a strong focus on cost control are contributing to margin
recovery for the business.
BWG Group (Ireland and South West England)
• BWG Group reported a sales decrease of 1.6% in EUR terms, primarily impacted by
decreased consumer spending in response to increased costs of living. In the UK,
consumers are shifting their spending to larger supermarket formats.
• Operating expenses were well managed in the period, with margin improvement driven
by a better sales mix and strong performance in certain categories.
• While inflation in Ireland has moderated, consumers are still highly price-sensitive and
value-driven. The increase in the minimum wage from 1 January 2025 supports
consumer spending but requires independent retailers to reassess the impact of cost
inflation. The BWG Group's strategic efforts, which include cost management, sales
initiatives, and new store developments, have helped address the impacts of
challenging consumer and trading conditions.
SPAR Switzerland
• Performance in SPAR Switzerland was affected by increased living costs and
intensifying competition, resulting in a decrease in turnover of 5.2% in CHF terms.
• SPAR's private-label range remains a strength, addressing the growing demand for
affordability and competitive pricing.
STRATEGIC UPDATE
The Group has successfully achieved critical milestones in its strategic priorities, optimizing
operations and driving growth. The finalisation of the SPAR Poland disposal on January 31, 2025,
marked a significant achievement. Our European strategic review, which we aim to complete by
June 2025, is progressing well and aligns with our refined capital allocation framework designed
to create sustainable value for stakeholders.
We have effectively resolved the SAP system issues in KZN, yielding notable improvements,
particularly in pricing visibility. The next phase of the full system rollout will focus on Build it
Imports Warehouse and the Eastern Cape distribution centre ("DC") in the first half of 2026.
Strengthening our balance sheet remains a priority. We have engaged productively with our
supportive lenders and have multiple levers to reduce debt, including effective working capital
management, prudent capital expenditure, and the disposal of non-core properties.
Our Southern Africa margin recovery will be supported by the improved performance of the KZN
DC, the ongoing disposal of non-performing corporate stores, and enhanced operational
efficiencies.
INTERIM RESULTS
The financial results for the six months ending 31 March 2025 will be published on SENS on or
about Wednesday, 4 June 2025.
SPAR shareholders are advised that the financial information contained in this announcement is
the responsibility of the directors and has not been audited, reviewed or reported on by the
Group's auditors.
By order of the Board
Umhlanga
27 February 2025
Sponsor One
Capital
Corporate Broker
Rand Merchant Bank, a division of FirstRand Bank Ltd
Date: 27-02-2025 11:54:00
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