The SPAR Group Limited (“SPAR” or “the Group”) has reported a solid financial outcome for its 2025 financial year, supported by stronger trading in the latter months, tight cost control, and improved operational focus. The company says the year marked a crucial turning point as it streamlined its operations and rebuilt its balance sheet.

CEO Angelo Swartz described the period as a year of renewal for the organisation. “We have deliberately simplified the business, reduced debt, enhanced efficiency and bolstered our resilience. The improved momentum in the second half, together with stronger cash generation and lower gearing, underpins our confidence in delivering sustainable value while investing responsibly,” he said during the release of results for the 52 weeks to 26 September 2025.

A stronger financial position was one of the standout achievements. Group net debt fell sharply — down 40% from R9.1 billion to R5.4 billion — assisted by the sale of the Group’s operations in Switzerland and Poland as well as better working capital discipline. Cash generation rose to R5.4 billion, from R4.8 billion in the prior year, while leverage improved to 1.74x.

Comparable Group revenue rose 1.6% for the year, accelerating to 3.5% growth in the second half. Gross profit from continuing operations increased by 3.3%, with margins improving by 20 basis points to 10.8%. Operating expenses remained closely controlled, helped by lower fuel costs. As a result, operating profit before extraordinary items increased to R2.8 billion, with operating margin holding steady at 2.1%.

SPAR’s Irish business, the BWG Group, continued to perform well, achieving an operating margin above 3% despite inflationary pressures on wages and other costs. Stronger trading in the latter part of the year demonstrated the value of its established brands and retailer partnerships.

In Southern Africa, sales grew 2.3% for the year in a challenging consumer environment, with a notable step-up to 2.9% in the second half. Operating profit in the region climbed 6.8%, driven by improved wholesale performance, disciplined promotions and enhanced supply chain efficiencies. Retailer loyalty remained strong at 78.6%. On-demand services experienced rapid growth, with volumes surging 136% year-on-year, boosted by a partnership with Uber Eats launched in March 2025.

The Group’s expansion into adjacent categories also continued to show positive momentum. SPAR Health delivered 13.2% growth, supported by wholesale channel gains and a 20% increase in Scriptwise driven by chronic medicine initiatives. Pet Storey, SPAR’s new franchise concept in pet retail, has seen encouraging early engagement. Build it reported stable growth of 2.4% with loyalty at 67.8%, and continued to benefit from ongoing access to consumer microloans — particularly those provided through Capitec.

With consumers under pressure from rising living costs, SPAR emphasised the importance of value-focused initiatives. The introduction of “Super Savings” and enhancements to the SaveMor store format were designed to help households stretch grocery budgets further without compromising quality. Swartz credited the Group’s independent retailer network for keeping the business closely aligned with customer needs.

The company continues to invest in new retail formats. A recent example is the first SPAR Gourmet store opened in Zimbali Oasis, showcasing a partnership-led approach to delivering premium experiences while supporting local entrepreneurship. SPAR aims to offer convenience and quality to diverse communities nationwide.

Swartz pointed to the success of the Black Friday campaign as evidence of SPAR’s commitment to affordability. The promotion prioritised staple items and enabled customers to assemble a grocery basket for under R375 — an approach he said demonstrated the strength of SPAR’s data insights and expanding digital ecosystem.

Although the Group did not declare a distribution for the year, the Board reaffirmed its intention to restore shareholder payouts over the short to medium term as leverage continues to decline.

Looking forward, SPAR plans to accelerate its technology rollout to support smarter retail, rebuild margins in Southern Africa, maintain debt reduction progress, and allocate capital with discipline. The Group also highlighted its role in improving access to goods and services in township and rural communities, where it sees both significant social impact and growth opportunities.

“Every initiative — from pricing decisions to investment choices — is focused on responsible progress,” Swartz concluded. “With a simplified business, improving trading trajectory and stronger balance sheet, we are committed to consistently enhancing earnings and reinstating returns. Our focus remains on empowering our independent retailers, uplifting communities and supporting long-term retail development.”

For full results and webcast replay: www.thespargroup.com/investors

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