Spar gets a boost from strong sales at Tops
Despite a tough local market, Spar saw strong liquor sales at its Tops chain.
Spar reported a profit increase of almost 10% (normalised diluted headline earnings per share), and its dividend per share was hiked 9.7% to 800c.
Its turnover rose 8% to R109.5bn, with almost a third now in foreign currencies. Spar SA owns businesses in Ireland and Switzerland.
In Southern African business saw turnover growth of 8% in a “tough market that remains highly competitive”.
Local turnover got a boost from strong growth of almost 18% in liquor sales. Spar owns the Tops chain. Its building materials business, Build It, saw turnover growth of almost 7%. Its gross profit margin in Southern Africa dipped slightly to 8.9%.
Prices at its local stores rose by 3.1% over the past year – compared to only 1.4% in the previous year.
In Southern Africa all indicators continue to suggest that consumers will remain under financial pressure, and Spar says construction plans for the previously announced distribution facilities have been placed on hold. It is also not planning any further property acquisitions in the regions.
Its Irish business grew turnover in 6% in euro, while SPAR Switzerland saw a decline of 1.5% in sales in the local currency.
The Irish outlook continues to be influenced by Brexit concerns, however this management team remains cautiously optimistic in both the Irish and South West England regions. The Swiss business remains confident that the identified strategic initiatives to improve the turnover performance are gaining momentum.