Spar full-year profit lags consensus
Fin24 - Nov 22nd 2011, 07:57
Johannesburg - Grocery retailer Spar Group [JSE:SPP] missed forecasts with a 3.3% rise in full-year profit as tough competition, weak selling prices and fragile consumer demand weighed on its margins.
Spar, which also operates liquor and building materials stores, said on Wednesday diluted headline earnings totalled 522.8 cents in the year to end-September, well below a consensus estimate of 537.6c by 12 analysts polled by Reuters.
While consumers gradually spend again thanks to decades-low interest rates and lower food inflation, increased competition after Walmart’s entry has weighed on retailers seeking to protect their market share.
Spar said sales rose 10.4% to R38.8bn.
The company, which raised its annual dividend by 4.1% to 377c, said it would consider using surplus cash to buy back shares as it targets capital expenditure of not more than R190m for the next fiscal year.
Shares in Spar are virtually unchanged so far this year, but the general retailers index has dropped more than 12% in the year to date.
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