Spar Group delivers excellent performance despite challenging retail environment
Spar Group CFO Mark Godfrey: While we are optimistic, we acknowledge the market uncertainties.
The Spar Group has reported an “excellent performance” for the financial year ended 30 September 2019.
The group reported a turnover increase of 8.4 percent to R109.5 billion “against the backdrop of markets that remain tough in all regions of operations”.
Spar Group CFO Mark Godfrey said that the retail environment is clearly under pressure both in Southern Africa and Europe. He attributed the pressure in Southern Africa’s retail environment to unemployment, low economic growth, drought and a financially strapped consumer, among other things, and the European retail environment to the Brexit spectre hanging heavy in Ireland, while the Swiss market continues to be hampered by a concerning slow-down in food and hospitality spend.
“Against these backdrops, the group managed to report a very satisfactory set of results – with a solid increase in net profit, despite some positive variances in financial liability measurement,” Mark said.
The highlights reported for Southern Africa included:
- Increased operating profit by 7.2 percent to R3 billion.
- Diluted headline earnings per share increased by 9.9 percent to 1160.6 cents per share on a normalised basis.
- Spar Southern Africa delivered solid growth of 8 percent in wholesale turnover.
- The core Spar business grew turnover by 7 percent to R57.6 billion.
- The Tops liquor brand delivered a wholesale sales growth of 17.6 percent.
- Combined food and liquor wholesale turnover increased by 8.1 percent.
- Build It increased sales by 6.9 percent to R8 billion.
“We are confident that our retail model is well equipped to face the new year with positive expectation – but there are clearly additional risks entering the markets. So, while we are optimistic in our outlook, we acknowledge the market uncertainties with some caution.”