SPAR : Unaudited interim results for the six months ended 31 March 2022 and cash dividend declaration

THE SPAR GROUP LTD

Unaudited interim results for the six months ended 31 March 2022 and cash dividend declaration

+5.2%	+7.1%
Group	Operating
turnover	profit
+3.7%	175.0 cents
Diluted headline	Interim dividend
earnings per share	per share
+10.4%	+55
Net asset value	Net new
per share	stores

OUR PURPOSE

to inspire people to

do and be more

SALIENT FEATURES

SPAR Switzerland reported a decrease in turnover of 1.6% in CHF-

Unaudited

Unaudited

six months

six months

denominated currency and

has seen a decline in trading against the

ended

ended

extraordinary levels of growth in the prior period. As expected, the elimination

31 March

31 March

%

of pandemic-related restrictions in the current period significantly reduced

Rmillion

2022

2021 change

Turnover1

67 605.2

64 240.5

5.2

the level of neighbourhood store support which the business benefitted from

Operating profit

1 832.0

1 710.2

7.1

during the height of COVID-19 restrictions. Increased electricity and fuel costs

Earnings per share

(cents)

605.5

616.4

(1.8)

impacted overall profitability for this business.

The

SSAG

petro-convenience

Headline earnings per share

(cents)

642.6

620.7

3.5

stores have contributed positively for the full

six

months

against only one

Diluted headline earnings

641.1

month in the prior period. The TopCC cash and carry business has returned

per share

(cents)

618.5

3.7

to growth, supported by the reopening of restaurants and hospitality. On a net

Dividend per share2

(cents)

175.0

280.0

(37.5)

Net asset value per share

(cents)

4 373.9

3 961.1

10.4

basis, SPAR Switzerland closed five stores, taking the total store network to

1

Turnover represents revenue from the sale of merchandise.

381 stores at the end of the period.

2

On 16 February 2022, the board announced a change in the dividend policy for a period of

SPAR Poland reported turnover growth of 6.5% in PLN-denominated terms.

two years to fund inter alia the strategic SAP implementation.

The further strategic closure of selected loss-making stores during the period

SUMMARY SEGMENT ANALYSIS

impacted sales growth. Retailer loyalty for the independent retailers in the

south of the country improved marginally to 31% at the end of March 2022

and further work to improve this level is in progress, which will drive growth for

Southern

The SPAR

this business. The store closures resulted in a reduction in the store network of

Switzer-

Group

19 stores to 208 stores at period end.

Rmillion

Africa

Ireland

land

Poland

Ltd

Profit/(loss)

OUTLOOK

DECLARATION OF ORDINARY DIVIDEND

Turnover

44 621.4

14 853.3

6 864.7

1 265.8

67 605.2

In South Africa, inflationary pressures will continue to persist, with the consumer

Notice is hereby given that an interim gross cash dividend of 175.0 cents

Gross profit

4 420.6

2 096.8

1 279.0

230.4

8 026.8

expected to remain under

pressure. SPAR has

increased its promotional

Operating profit/(loss)

1 420.0

390.0

187.9

(165.9)

1 832.0

(2021: 280.0 cents) per share has been declared by the board in respect of

calendar for the period ahead to continue to attract cash-strapped consumers

Profit/(loss) before

the six months ended 31 March 2022. The dividend has been declared out

1 355.8

314.7

158.4

(187.5)

1 641.4

and is focused on providing a renewed SPAR-brand fresh offering, including

taxation

of income reserves.

fresh produce, butchery, bakery and home meal replacement. There is great

Financial position

The salient dates for the payment of the interim dividend are detailed below:

26 601.4

13 862.1

10 204.2

2 053.7

52 721.4

enthusiasm from our independent retailers to implement SPAR's new online

Total assets

shopping platform, SPAR2U. Our online platform is receiving positive reviews

Declaration date

Wednesday, 8 June 2022

Total liabilities

21 603.2

11 433.5

8 374.7

2 892.8

44 304.2

and a large number of stores are preparing to launch online within their

Last day for shares to trade cum-dividend

Tuesday, 28 June 2022

communities in the coming months. Liquor sales should continue to rebound in

Shares to commence trading ex-dividend

Wednesday, 29 June 2022

PERFORMANCE OVERVIEW

the absence of further pandemic-related liquor trading restrictions. Post period

Record date

Friday, 1 July 2022

end, KwaZulu-Natal experienced devastating

floods. The damage to our

Payment of dividend

Monday, 4 July 2022

The group delivered robust turnover growth, increasing turnover by 5.2%

SPAR stores was fortunately minimal and most of these retailers were trading

Shareholders will not be permitted to dematerialise or rematerialise their shares

to R67.6 billion. Group operating profit increased by 7.1% to R1.8 billion.

again within 24 hours. Our Build it business has been negatively impacted by

between Wednesday, 29 June 2022 and Friday, 1 July 2022, both days inclusive.

SPAR Southern Africa delivered a strong performance. Profits in the foreign

heavy rainfall, but remains well placed to assist with rebuilds, given the level of

In

terms of South African taxation legislation effective from 1 April 2012, the

businesses have come under pressure due to increased labour and energy

damage experienced within the region.

following additional information is disclosed:

costs. Whilst loss making, the Polish business is showing improvement.

In the European regions, with the pandemic-related regulations set aside,

• The South African local dividend tax rate is 20%;

Diluted headline earnings per share increased by 3.7% to 641.1 cents. The

board has declared an interim dividend of 175.0 cents per share, in line with

management teams are optimistic ahead of the summer months, which are

•

The net local dividend amount is 140.0 cents per share for shareholders

traditionally good for retail trading, and hospitality sector growth. BWG Group

liable to pay tax on dividends and 175.0 cents per share for shareholders

the temporarily adjusted dividend policy.

exempt from such dividend tax;

has several focus areas including the EUROSPAR supermarket strategy.

•

The issued share capital of The SPAR Group Limited is 192 602 355

SPAR South Africa

reported

solid growth, with

wholesale

turnover

Growth of the existing business remains the key area of focus for the Swiss

ordinary shares; and

increasing by 7.7% to R43.8 billion. The core SPAR wholesale grocery

team, along with converting the remaining SSAG stores to the SPAR Express

•

The SPAR Group Limited's tax reference number is 9285/168/20/0.

business reported a meaningful recovery in sales growth of 4.6%, assisted

brand and strategically transferring these stores to independent retailers. The

By order of the board

by increased marketing initiatives at retail, and unrestricted liquor trading,

next six months will be a crucial period for the Polish business and management

which drove increased footfall to SPAR stores. Internally measured wholesale

are heavily focused on retailer loyalty growth and new business development.

Kevin O'Brien

Pinetown

price inflation for the

period was

5.0%. Core business trading continued

The partnership with Avia fuel courts continues to grow in line with the plan

Company Secretary

8 June 2022

for the SPAR brand to gain traction in petro-convenience in Switzerland and

to be impacted by the stores which were closed due to the civil unrest in

Poland going forward.

ABOUT THIS ANNOUNCEMENT

July 2021. At the end of the period, 13 SPAR format stores and nine TOPS

at

SPAR stores remained

closed. Following the lifting of the COVID-19

The group continues to benefit from its diversity in terms of geographies and

This short-form announcement is the responsibility of the directors and is only

nationwide liquor trading bans in September 2021, TOPS at SPAR made

a summary of the information in the full announcement and does not contain

business segments and remains resilient in the face of ongoing challenges.

a

strong recovery, increasing turnover by 41.6% for the period. On a

full or complete details.

Considering the inflationary

pressures, greater

collaboration, cost reduction

combined basis, wholesale grocery and liquor turnover increased by 8.5%

The full announcement can be found on SENS at

and driving efficiencies across all our businesses are key areas of focus for the

for the period. While Build it experienced a slowdown against the backdrop

https://senspdf.jse.co.za/documents/2022/JSE/ISSE/SPP/Interim_22.pdf.

second half of the financial year. We remain well positioned to offer exceptional

of extraordinary levels of home improvement seen during the pandemic,

value to consumers through our SPAR house brand offerings. The return to more

The full announcement is also available on the company's website at

this business continues to deliver growth with turnover increasing by 1.4%.

normal activity, as COVID-19 restrictions are lifted is widely welcomed. SPAR

https://thespargroup.com/ and copies may also be requested from the

Build it trading was hampered by heavy rainfall in various regions across the

is a people business - freedom of movement and socialisation are essential

company's registered office and at the office of the

JSE sponsor at no charge,

country, as well as the impact of seven stores which have remained closed

for relationship building across our communities, and with new and existing

during office hours. Any investment decision by investors and/or shareholders

following the civil unrest. The total Southern African store network increased

stakeholders. The SPAR brand is embedded within the heart of its communities.

in relation to the company's shares should be based on the full announcement.

The information contained in this short-form announcement has neither been

to 2 493 stores, with 53 net new stores across all formats.

We will continue to provide an excellent service to our independent retailers and

audited nor reviewed by the company's external auditors.

to make a difference within the communities we serve.

BWG Group (Ireland and South West England) delivered excellent turnover

www.thespargroup.com

growth of 8.3% in EUR-denominated terms. As consumers started to switch

Graham O'Connor

Brett Botten

spend to out-of-home channels with the easing of COVID-19 restrictions, the

Chairman

Chief Executive Officer

retail brands have managed to deliver an overall robust performance. Sales

CORPORATE INFORMATION

in

foodservices rebounded

strongly with

the reopening of the hospitality

industry. Appleby Westward in South West England has continued to benefit

Directors: GO O'Connor** (Chairman), BW Botten (Chief Executive Officer), JA Canny*, MW Godfrey, LM Koyana*, M Mashologu*, P Mnganga*, ST Naran*, AG Waller* (Lead independent)

(* Independent non-executive) (** Non-executive)

from the growth of corporate stores. Despite many cost pressures the

Company Secretary: KJ O'Brien THE SPAR GROUP LTD: (SPAR) or (the company) or (the group) Registration number: 1967/001572/06 ISIN: ZAE000058517

business has performed strongly and has again reported a solid profit result.

JSE share code: SPP Registered office: 22 Chancery Lane, PO Box 1589, Pinetown, 3600

During the period, there were a significant

number of

new store openings,

Transfer secretaries: JSE Investor Services (Pty) Ltd, PO Box 4844, Johannesburg, 2000

Auditors: PricewaterhouseCoopers Inc., Waterfall City Heliport, 4 Lisbon Ln, Jukskei View, Midrand, 2090 Sponsor: One Capital, 17 Fricker Road, Illovo, 2196

increasing the store portfolio for the combined business to 1 432 stores

Bankers and corporate brokers: Rand Merchant Bank, a division of FirstRand Bank Ltd, PO Box 4130, The Square, Umhlanga Rocks, 4021

(26 net new stores).

Attorneys: Garlicke & Bousfield,

PO Box 1219, Umhlanga Rocks, 4320

GREYMATTERFINCH # 15864