DURBAN - RETAILER Spar Group expects its half-year earnings to surge as much as 57 percent, partly boosted by strong underlying performance in the Swiss and Irish businesses and reduced operating losses in the Polish operations.
Spar said yesterday that its headline earnings per share was likely to increase by between 47 and 57 percent for the six months to end March, to be between 599.8 cents a share and 640.6c, up from last year’s 408c.
Its earnings per share are expected to increase by between 53 and 63 percent, to be between 596.7c and 635.7c, up from 390c reported a year earlier.
“Group earnings were fundamentally driven by an exceptionally strong underlying performance in the Swiss and Irish businesses, together with the reduction in operating losses for the Polish operations,” Spar said.
In addition the earnings were also driven by the final minority purchases in both the Irish and Swiss businesses having been fully settled during the period and this removed the need for further fair value adjustments previously arising on the financial liabilities, which had a material impact on earnings in the prior period.
In the overall results, the group increased its turnover by 7.5 percent to R64.2 billion.
The Spar Southern Africa reported a 3.1 percent increase in total wholesale turnover, which continued to reflect the weaker consumer spend and disruptions to the liquor business.
The core Spar grocery business reported turnover growth of 0.8 percent as the business slowed significantly in March 2021 compared to March 2020 when consumers stocked up in advance of the Covid-19 pandemic lockdown regulations.
The wholesale liquor business Tops continued to be negatively impacted by the reduced retail hours and lost trading days. Tops retailers lost 72 trading days, approximately 40 percent of available trading days.
“The liquor business has started to recover in the last quarter, with wholesale liquor sales declining by 7.8 percent for the six month period, against a decline of 17.9 percent for the 18 weeks to January 29.
“In a related category, the cigarette business was severely impacted by the initial restrictions on the sale of cigarettes.
“This business has not seen a full recovery since restrictions were lifted and turnover was down 13.1 percent for the period,” the group said.
However, Build It continued to outperform expectations with sales of building materials increasing by 26.2 percent.
Spar will release its half-year results on May 25.
Spar shares traded 1.63 percent lower at R188.50 before the close of the markets. The shares ended the day at R188.34 on the JSE.
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