Spar turns its problem Swiss acquisition profitable
By Robert Laing - May 30th 2018, 08:43
South African sales would have been higher were it not for the listeriosis outbreak, CEO Graham O’Connor says.
Spar managed to turn its problem Swiss acquisition profitable during the six months to end-March.
That helped it increase its interim dividend again, after a cut in the first half of the 2017 financial year.
Overall sales from Southern Africa, Ireland and Switzerland grew 5% to R50.9bn during the first half of the 2018 financial year, the retail group reported on Wednesday morning.
Its Southern African operations contributed 69% of the total, growing 7% to R35bn.
Local sales would have been higher were it not for the listeriosis outbreak, CEO Graham O’Connor said in the results statement.
"Sales in the chilled processed meat category were significantly affected, without a clear trend in substitute product sales becoming evident."
Spar’s sales in its home market were boosted by its acquisition of pharmaceutical wholesaler S Buys. At the end of the period, there were 94 pharmacies within Spar stores.
"Excluding this new turnover, the comparable business grew by 5.4%, from 4.9% in 2017, reflecting the continued tough retail market, which remains underpinned by weak consumer spending," O’Connor said.
The group’s Irish division grew sales by 9% to R10.7bn, contributing 21% of total sales.
Its Swiss division suffered a 9.6% decline in sales to R5.2bn but turned from a R27m pretax loss in the first half of the 2017 financial year to a R40m profit during the reporting period.
Spar’s net profit grew 13% to more than R1bn.
It declared a R2.70 interim dividend, a 12.5% rebound from R2.40 in the matching period in 2017, which was cut from R2.55 in the first half of its 2016 financial year as it struggled to pay for its geographical expansion.
Its Southern African operations comprised 2,184 stores at March 31, 115 more than the 2,069 at the end of its 2017 interim period.
Spar Ireland’s store network remained level at 1,330, while its Swiss store network was cut to 289 from 301.
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