Operating Profit Up 7.9% At Spar South Africa, Driven By Europe Sales
Spar Group, with operations in South Africa as well as Ireland and Switzerland, has posted a 7.9% increase in operating profit in its full-year earnings, of R2.8 billion (€170 million).
Turnover at the business rose by 5.9%, to R101 billion (€6.2 billion), for the full-year period.
Announcing its results, Spar Group noted that its performance was 'positively impacted by improving contributions' from its European operations, despite what it described as 'challenging trading conditions'.
In its Southern African operations, wholesale turnover was up 6.7%, boosted by the acquisition of pharmacy business S Buys earlier this year. The group's TOPS liquor store banner saw wholesale growth of 13.0%, while Build It, the group's building materials arm, was up 7.5%.
In Ireland, its BWG Group operation saw a 4.2% increase in sales, in euro terms, to €1.5 billion, with its BWG Foodservice arm seeing turnover rise by 14.7%.
According to The Irish Times, the three directors that operate BWG Group, chief executive Leo Crawford, property director John Clohisey and its finance director John O’Donnell, are in line to share a windfall of around €75 million when Spar Group acquires full control of the business next year.
The South African operator currently holds 80% of the Dublin-based business.
In Switzerland, Spar Group business posted a turnover of R9.8 billion (€600 million), while operating profits were up 80.6%.
'Against the backdrop of subdued consumer and business confidence in Southern Africa, the trading environment is expected to remain largely unchanged in the medium term,' Spar Group noted in a statement.
'While food price inflation has recently dropped to extremely low levels, there are discernible signs that the cycle will start to turn. Recent record movements in fuel prices and continued foreign currency weakness also indicate that consumers will remain under pressure, with a constrained spending outlook,' it added.
Spar Group noted that its 'extensive distribution capability and market-leading brands are well positioned to deliver exceptional value to consumers and to also ensure that its independent retailers remain suitably positioned to meet these economic challenges'.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.