Wrap Text
Unaudited condensed consolidated interim financial results for the 26 weeks ended 28 March 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" or the "Company")
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL RESULTS FOR THE 26 WEEKS ENDED 28 MARCH 2025
Financial overview (continuing operations on a comparable basis#)
• Group revenue at R66.1 billion (H1 2024: R66.2 billion)
• Constant currency Group revenue up 1.1%
• Gross profit margin expansion to 10.7% (H1 2024: 10.6%)
• Operating profit before extraordinary items up 1.6% to R1.46 billion
• Earnings before interest, tax, depreciation and amortisation (EBITDA) up 1.7% to R1.72 billion
• Headline earnings per share (HEPS) down 0.4% to 450.1 cents
• Cash generated from total operations up 50.1% to R1.9 billion
• Improved Net debt/EBITDA ratio: SA 2.1x; Ireland 1.9x
R million 26 weeks 26 weeks % change
ended ended
28 March 28 March
2025# 2024#*
Turnover¹ 66 079 66 236 (0.2)
Operating profit (before extraordinary items) 1 464 1 441 1.6
Earnings per share (cents) 415.1 438.9 (5.4)
Headline earnings per share (cents) 450.1 451.9 (0.4)
Diluted headline earnings per share (cents) 449.5 451.8 (0.5)
1 Turnover represents revenue from the sale of merchandise.
* Re-presented for discontinued operations (SPAR Switzerland and Appleby Westward Group (AWG)) in accordance with International
Financial Reporting Standards (IFRS 5).
# Continuing operations earnings adjusted to allow for comparability after taking into account the impact of the adoption of the 52/26 week
reporting framework.
Summary segment analysis
Continuing operations Discontinued operations
The SPAR Group Southern Africa Ireland AWG* Switzerland*
Ltd
R million R million EUR million EUR million CHF million
Profit/(loss)
Turnover¹ 66 079 49 935 837 125 353
Gross profit 7 089 4 913 113 33 66
Gross profit 10.7% 9.8% 13.5% 26.4% 18.7%
margin (%)
Operating profit / 1 464 989 25 (3) (2)
(loss) - before
extraordinary
items
Operating margin 2.2% 2.0% 3.0% (2.4%) (0.7%)
(%)
Profit / (loss) 1 039 641 21 (5) (5)
before taxation
Pre IFRS 16 - 1 719 1 113 31 (1) 2
EBITDA
Financial
position
Net Borrowings 6 637 3 783 143 147
Net debt/EBITDA 2.1x 1.9x
1 Turnover represents revenue from the sale of merchandise.
* Excludes IFRS 5 impairments.
As reported in the announcement published by the Company on SENS on 13 May 2025, SPAR
adopted a 52/26 week reporting period to align with the retail industry best practice. Unless otherwise
stated, commentary reflects comparable results from continuing operations and has been adjusted to
align trading days across periods.
Performance overview
Continuing operations
The Group navigated a challenging environment while making tangible progress on its strategic
priorities. As part of its broader intent to stabilise the business and lay the foundation for future growth,
SPAR identified five key focus areas: 1) the exit from Poland, 2) the restructuring of Group debt, 3)
the completion of a strategic review of the European operations, 4) the further rollout of the SAP
system, and 5) the improvement of the Southern Africa EBIT margin to 3% and attain a leverage ratio
of 1.5 to 2.0 times by the end of FY2026.
Three of these milestones have been achieved in H1 2025 — the disposal of SPAR Poland was
concluded in January 2025, the Group's debt restructure was completed in March 2025, and in May
2025 the Group announced its intention to dispose of its operations in Switzerland as well as AWG in
the United Kingdom. This decision follows a comprehensive assessment of the Group's capital
allocation priorities, long-term strategic focus and the structural and operational dynamics of these
businesses. The board of directors of the Company (Board) believes that divestment aligns with
SPAR's strategy to focus on its core Southern African and Irish operations.
Group performance for the 26 weeks demonstrated varying operational momentum across
regionsGroup revenue from continuing operations remained steady at R66.1 billion, while gross profit
increased to R7.1 billion. Operating profit grew by 1.6% to R1.5 billion supported by improved cost
discipline, with the Group reporting EBITDA of R1.7 billion, up 1.7% from the prior period.
Headline earnings per share from continuing operations was 450.1 cents, a marginal decrease of 0.4%
from 451.9 cents in the prior comparable period.
In Southern Africa, wholesale turnover increased by 1.7%. Combined grocery and liquor wholesale
revenue rose by 1.1%, while retail revenue increased by 1.9% (like for like (LFL) up 1.6%) in a difficult
trading environment affected predominantly by lower food inflation, Mozambique post-election unrest,
the timing of Easter falling in the second half of the current year and store closures in Gauteng. Growth
remained strong in the lower income customer segments, while the middle and upper segments'
performance lagged the market. The Group's on-demand shopping app, SPAR2U, demonstrated
significant progress with a 174% increase in delivery volumes and broad network coverage driving
improved customer convenience. Our partnership with Uber Eats, launched in Q1 2025, is live in 130
stores enabling us to reach new customers with no physical footprint expansion.
Ongoing cost and margin improvements contributed to the EBIT margin expansion in Southern Africa,
with significant advancements noted at the KwaZulu-Natal distribution center. Furthermore, reductions
in warehouse and distribution costs supported overall profitability, leading to a solid improvement in
operating profit margin for grocery and liquor segments – maintaining the Group's trajectory towards
its medium-term goal of achieving a 3% margin.
Build it, South Africa's largest building materials retail brand, recorded solid growth, increasing sales
by 4.1% and retail LFL growth of 5.4%, despite a difficult economic environment and unseasonal
rainfall. This growth was supported by an improved gross margin due to effective product mix
management.
SPAR Health revenue grew 13.7%, primarily driven by strong gains in Wholesale and Scriptwise.
Loyalty improved to 58.0%, up from 53.2% in the financial year ended 30 September 2024,
demonstrating increased relevance and retailer trust. SPAR Health experienced continued momentum
in the performance of its Own Brand, which supported margin and strengthened customer loyalty.
Ireland reported local currency revenue marginally down by 0.6%, in an environment where inflation
is challenging volumes in the retail convenience sector. Notwithstanding this, gross margin was
positively impacted by product mix with local performance bolstered by lower gearing and cost savings
partially offset by increased labour costs due to the minimum wage increase.
Balance Sheet and Liquidity
The Group made progress in strengthening its balance sheet, with a clear focus on improving gearing.
Net borrowings for continuing operations stood at R6.6 billion. The successful refinancing in
South Africa and Switzerland improved liquidity and balance sheet stability with an improved debt
maturity profile. The Group anticipates that the successful completion of the divestments of
SPAR Switzerland and AWG will materially deleverage and strengthen the balance sheet.
Cash flow performance improved materially, driven by tighter working capital management and
reduced capital expenditure. CapEx was strategically moderated to prioritise critical projects, and the
Group remains committed to disciplined, needs-based investment aligned with long-term strategy.
Discontinued Operations
As part of its strategic review, the Group has classified SPAR Switzerland and AWG as
discontinued operations. These businesses recorded aggregate post-tax losses of R4.4 billion,
including impairments of R4.2 billion. As stated above, the disposal of SPAR Poland was concluded
in January 2025. These efforts aim to realise value and ensure business continuity in these regions.
Dividend
In line with the Group's capital allocation priorities and ongoing restructuring, no interim dividend for
the 26 weeks ended 28 March 2025 has been declared (2024: 0.0 cents per share). This decision will
be reconsidered based on future macro-economic and operating conditions.
Outlook
Looking ahead, SPAR's focus is on continued margin improvement, operational execution in its core
markets, a disciplined approach to capital allocation and delivering the remaining elements of its
strategic reset. Encouragingly, post-period trade has shown positive momentum across key regions.
The intended divestments of SPAR Switzerland and AWG are aligned with the SPAR Group's
broader portfolio optimisation objectives and represent a meaningful opportunity to unlock value by
transitioning the businesses to owners with strong local knowledge and relevant experience in the
European retail sector.
The Group is presently engaged in advanced negotiations with entities capable of acquiring these
businesses and realising their long-term potential. Regarding AWG, the Group has entered into
exclusive discussions with a reputable UK-based business, well-positioned to develop and expand
AWG in South West England. In Switzerland, the Group is negotiating with a well-established local
investment house, renowned for its extensive market knowledge and strong track record in asset and
business management.
SPAR's Southern African operations' growth prospects are grounded in a multifaceted approach that
aims to enhance its various retail segments and operational efficiencies. Initiatives include enhancing
the category mix, leveraging off the strategic partnerships with Uber Eats and Vida e Caffè, and
expanding on-demand services including Build it 2U. Increasing pharmacist training facilities together
with establishing distribution centres in the Western Cape and KwaZulu-Natal will support the growth
of SPAR Health as we work towards doubling the pharmacy network by 2028. Additionally, increasing
private label product penetration in response to evolving consumer needs will also bolster loyalty
improvements. Emphasis is placed on improving distribution centre efficiency and developing
customer insight platforms such as Spar Mobile and Flex, a communications portal allowing the brand
and retailers alike to personalise communication to Rewards users. Through these strategies, SPAR
aims to leverage its innovative approaches to drive top-line growth and enhance overall market
execution.
BWG Group's growth prospects are centred on enhancing Ireland's leading convenience retail brands
by increasing the own brand range and driving everyday value and growing their food services
business. The appointment of a Food & Beverage Innovation Director will support the development of
key categories, while range and pricing optimisation will focus on new and high-margin categories.
Additionally, the BWG Group plans to increase warehouse and logistics capacity, implement cutting-
edge store designs and explore acquisition opportunities, all of which contribute to their growth
strategy.
The Group expects continued margin improvement in the second half of the financial year ending 26
September 2025 as operational efficiency initiatives mature. While macroeconomic challenges
remain, including pressure on consumer wallets and uncertainty from global trade tensions, SPAR
remains focused on delivering the remaining key priorities which includes the further SAP roll-out,
margin expansion and reducing debt. The focus will be on core market execution, top-line growth, cost
discipline and unlocking value through strategic portfolio decisions.
About this announcement
This announcement is the responsibility of the directors of SPAR.
As the information in this announcement does not provide all of the details, any investment decisions
should be based on the unaudited condensed consolidated interim financial results for the 26 weeks
ended 28 March 2025, available through the following JSE cloudlink:
https://senspdf.jse.co.za/documents/2025/JSE/ISSE/SPP/Interim_25.pdf.
The full announcement is also available on the Company's website at
https://thespargroup.com/investors/.
By order of the Board
Umhlanga
4 June 2025
Sponsor
One Capital
Corporate Broker
Rand Merchant Bank, a division of FirstRand Bank Limited
Date: 04-06-2025 07:30:00
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