Advertise with

Spar Group reported a 3.3% rise in diluted headline earnings per share
Spar Group reported a 3.3% rise in diluted headline earnings per share

Spar Group reported a 3.3% rise in diluted headline earnings per share


Business Live - Nov 9th 2011, 16:00

South African grocery chain Spar Group on Wednesday reported a 3.3% rise in diluted headline earnings per share to 522.8 cents for the year ended September 2011 from 506.3 cents a year ago 

A final dividend of 235 cents per share was declared, for a total dividend of 377 cents per share, up from the previous year's 362 cents.

The group's turnover grew 10.4% to R38.459 billion, while operating profit was 7.8% higher at R1.404 billion.

The company said trading for the year under review continued to be challenging with consumer spending under pressure, low levels of food inflation for most of the period and a highly competitive retail environment.

Food inflation through its distribution centres averaged 3.3% and was impacted by a significant increase in the last quarter.

SPAR wholesale turnover increased by 8.6% to R31.9 billion, while liquor sales remained extremely strong with wholesale turnover in the group's TOPS division reaching R2.6 billion and showing growth of 19.9%.

Wholesale turnover grew by 18.2% to R3.9 billion in the retailer's Build it division.

The group's retail division added a further five SPAR retail stores during the year, bringing the total SPAR stores owned to 10, however, the trading performance of these stores was not satisfactory, with a loss of R29.9 million incurred for the year.

"Considerable effort and focus will ensure an improvement in this division's performance in the new year," the company said.

It added that the focus on its independent retailers' profitability continued to put pressure on gross margins and core margins declined slightly to 7.8% from 7.9% in 2010.

The impact of the retail division and the building materials wholesale operation positively countered this reduction and resulted in a net improvement in overall margin from 7.9% to 8.1%, it said.

Operating expenses were up by 17.4% and comparable group expenses increased by 9.6% - significantly impacted by high diesel prices which contributed to delivery costs increasing by 19.9%.

Retail trading space was up by 3% with the opening of 25 new stores. At year end the group serviced 859 SPAR stores.

Looking ahead the group said it expected 2012 to be a challenging year with consumer spending remaining under pressure and an increasingly competitive trading environment.

"We are, nevertheless, positive about the opportunities for the business and will continue to focus on improving the performance of the new business initiatives, driving retail growth and realising further cost savings through improved operating efficiencies," it added.

Spar said it was confident that capital expenditure in 2012 would not exceed R190 million.

Related News

British American tobacco to cut more than 2000 jobs
12/09/2019 - 10:28
British American Tobacco plans to cut 2 300 jobs around the world, the company announced.

Consumers drink while retailers keep the tills active and lights on
10/09/2019 - 11:19
One in five South Africans is unemployed and economic growth remains anaemic, but retailers manage to grow, demonstrating that they still have some defensive qualities.

Multi-million rand Rustenburg Mall underway
09/09/2019 - 11:07
Rustenburg shoppers can look forward to a brand new shopping centre – Rustenburg Mall – set to introduce its first phase in April 2021.

AVI earnings slip as consumer spending remains constrained
09/09/2019 - 09:33
Consumer goods group AVI, whose brands include footwear retailer Spitz and Five Roses tea, trimmed its final dividend 4% in the year to end-June as it continued to feel the pinch from a constrained consumer environment.

Lego's sales bounce back with the help of Marvel superheroes
04/09/2019 - 09:11
Models of superheroes and villains from Marvel’s Avengers movies helped lift first-half sales at Lego, as the Danish toymaker continued its turnaround drive with investments in China, India, the internet and new stores.