Spar Group explores sale of Spar Switzerland and Appleby Westward Group
The entrance to a Spar grocery shop. The group has predicted flat to slightly lower earnings growth of its continuing operations for the 26 weeks to March 28, 2025
Image: Africa News Agency (ANA)
The Spar Group said Thursday it is exploring the sale of Spar Switzerland and Appleby Westward Group (AWG), the regional distribution business in the southwest of England.
The group announced in a trading statement for the 26 weeks ended March 28, 2025, in which flat to lower interim earnings growth was forecasted, that the decision to divest from the businesses had followed a strategic review of its European operations.
Consequently, Spar Switzerland and AWG would be classified as discontinued operations in the financial statements.
Regarding AWG, Spar's board said they were in talks with a UK-based business regarding AWG, which was well positioned to develop and grow AWG in South West England.
In Switzerland, "established parties with business interests in the region and experience in European food retail and distribution," were being engaged with, the board said.
'The group approach has been to engage parties whose interests align with the growth ambitions of the local management teams and retailer partners, and will ensure continuity for employees, suppliers and customers,' Spar's directors said.
Interim diluted headline earnings per share (Heps) for Spar Southern Africa and Spar Ireland, excluding the results of Spar Switzerland and AWG, were expected to decline between 0% and 10%, to between 409.4 cents to 454.9 cents, compared with 454.9 cents previously.
Diluted Heps for group total operations were expected to decline by between 34% to 24%, to between 275.9 cents to 317.8 cents a share.
The board said the Southern Africa groceries and liquor segment delivered modest top-line growth, while operating profit maintained solid momentum.
The KwaZulu-Natal distribution centre continued a positive trajectory, with improved profitability. This, with a focus on cost discipline, translated into modest operating margin expansion on a comparable basis.
Ireland delivered a resilient performance in a tough trading environment, supported by improved gross profit and operating margins in local currency terms, as well as reduced interest expenses driven by lower gearing. These were partially offset by adverse foreign currency translation effects.
Total impairments of about R4.2 billion were recognised, including R3bn in Switzerland and R1.2bn in AWG. The impairments take into account the fair value of the disposal groups, less costs to sell.
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