SPAR selling two businesses in Europe

SPAR is also progressing with the proposed sale of its businesses in the UK and Switzerland. 

As per its annual results presentation in November 2024, the group announced its intention to conduct a strategic review of its European operations following the disposal of its Polish business.

The group is now exploring divestment options for SPAR Switzerland and AWG in South West England.

The group is in exclusive negotiations with an established UK-based business, which it says will be well-positioned to develop and grow AWG in South West England.

In Switzerland, the group has been engaging with established parties with extensive business interests in the region and experience in the European food retail and distribution. 

The group said that its approach has been to speak with parties whose interests align with the growth ambitions of the local management teams, retailer partners and customers. 

Due to this, SPAR Switzerland and AWG are now classified as assets held for sale and discontinued operations. 

The company said it would keep shareholders informed of any material development arising from the discussions. 

In South Africa, the group said that its groceries and liquor segment delivered modest top-line growth on a comparable basis, while operating profit delivered solid momentum. 

The KZN distribution centre also continued its positive trajectory, reflecting improved profitability.

“This performance, together with continued focus on cost discipline, translated into modest operating margin expansion on a comparable basis,” said the group. 

The group added that Ireland delivered a strong performance in a challenging trading environment, supported by improving gross profit and operating margins in local currency terms and lower interest expenses. 

Adverse foreign currency translation effects on consolidation partially offset these gains. 

The group’s total impairments stood at R4.2 billion, including R3 billion in Switzerland and R1.2 billion in AWG. These impairments take into account the disposal groups with less cost to sell. 

Moreover, the sale of the Polish business resulted in a loss on disposal of R531 million in the interim period. 

The group, however, noted that it has made substantial progress in strengthening its balance sheet, with the successful refinancing of its South African and Swiss facilities. 

This improves liquidity and reduces funding costs. The group anticipates that the successful completion of divestments above will materially deliver and strengthen its balance sheet further. 

Huge loss incoming 

Nevertheless, the group still expects a massive drop in earnings for the period, forecasting its earnings per share to decrease by over 1,000% to a loss of -2,100.5 to -2,321.7 cents per share. 

Headline earnings per share are also expected to decrease between 34.0% and 24.0% to 276.1 and 317.9 cents per share. 

The results look slightly better when not including discontinued operations, where earnings per share are expected to decrease by between -15.0% and -5.0% to a positive 375.7 to 419.

The group’s interim results for the period will be released on Wednesday, 4 June 2025.