South African retailer and wholesaler Spar Group has said in a trading update that its half-year results will be at least 20% lower from a year ago, due to restructuring of its Polish business.
Spar Group completed the acquisition of the Polish business, Piotr i Pawel, and obtained the rights to the Spar license to trade in Poland, in this period.
Restructuring And Reorganisation
However, delay in the restructuring and reorganisation process has obstructed the commencement of normal trading operations in the country.
The finalisation of the legal administration of Piotr i Pawel was further impacted by the COVID-19 pandemic due to the suspension of court activity.
The adoption of IFRS 16 and a foreign exchange loss incurred on the Euro-denominated funding also adversely impacted the Polish business’ result, the update stated.
The group said that it remains positive about its medium to long-term prospects in this region despite the setback in Poland.
Overall, the retailer saw a 10.1% revenue growth for the six months ended 31 March 2020 with strong trading in all geographies.
The grocery chain, which also sells building materials and medicines in southern Africa, said headline earnings per share, the main profit measure in South Africa, was expected to be 17% to 27% lower between 434.6 cents and 382.2 cents per share for the six months to 31 March.
The retail group is likely to publish its first-half results on 21 May 2020, according to the update.