SPAR Group Reports 4% Turnover Growth in FY24, Plans to Launch Premium Grocery Store

SPAR Group reported a 4% increase in turnover for FY24, reaching R152.33bn ($8.43bn). The retailer's growth slowed in the second half due to currency translation impacts and decelerating food inflation. SPAR Southern Africa saw a 3.7% increase in turnover, while BWG Group reported a 2.8% increase in EUR terms and a 6.7% increase in ZAR terms. SPAR Switzerland faced a 6.2% decline in CHF terms but a marginal 0.3% decrease in ZAR terms. Earnings per share improved significantly to 855.9 cents, a 24.5% increase from the previous year.

The South African retail conglomerate, SPAR Group (JSE:SPP), reported a robust financial performance for the full year ending 2024, with a 4% increase in turnover to R152.33 billion ($8.43 billion) [1]. This growth was driven by strong performances in Southern Africa and Ireland, despite challenges posed by currency translation impacts and decelerating food inflation.

SPAR Southern Africa, contributing 69% of the group's turnover, reported a 3.7% increase to R104.5 billion ($6.05 billion) [1]. Meanwhile, BWG Group, SPAR's European subsidiary, reported a 2.8% increase in EUR terms and a 6.7% increase in ZAR terms to R47.8 billion ($2.83 billion) [1].

Despite a 6.2% decline in CHF terms, SPAR Switzerland's financial performance remained stable, with a marginal 0.3% decrease in ZAR terms to R1.8 billion ($102 million) [1]. The company's earnings per share improved significantly, rising by 24.5% to 855.9 cents [1].

The retailer's growth was supported by successful cost control initiatives, particularly in Southern Africa and Switzerland, as well as the expansion of its retail footprint with 179 new stores [1]. The company also generated ZAR5.4 billion in cash, up 7.8% from the prior period, indicating strong cash flow management [1].

However, retailer loyalty declined by 1.2 percentage points to 78.7%, indicating challenges in maintaining retailer relationships [1]. The Swiss business faced a tough macroeconomic environment, with declines in core convenience departments and cross-border shopping impacting volumes [1]. The UK operations reported a significant decline in performance due to macroeconomic pressures and poor summer trading conditions [1].

In response to questions from investors, the company clarified that the Swiss business was under investigation by Swiss authorities regarding their involvement with a service and trading cooperative [1]. The company also emphasized that of the ZAR900 million in business acquisitions, ZAR400 million was identified in South Africa for upgrades and revamps of existing corporate stores [1].

Sources:

[1] Gurufocus. (2024, November 28). Spar Group Ltd (JSE:SPP) Full-Year 2024 Earnings Call Highlights Strong Turnover and Profit Growth Amidst Retail Expansion. Retrieved from https://www.gurufocus.com/news/2618686/spar-group-ltd-jsespp-full-year-2024-earnings-call-highlights-strong-turnover-and-profit-growth-amidst-retail-expansion