Latest news with #Spar
Daily Maverick
2 days ago
- Business
- Daily Maverick
The Finance Ghost: The retail lowdown on Lewis, Spar, Pick n Pay and Dis-Chem
There was a flurry of corporate activity in the past week as companies with February and March year-ends looked to get results out before the end of the month. Many companies manage to get results out within two months of the end of the reporting period, with others using the full three months that they are allowed by the JSE. Amongst all the noise, there were several retailers that released important results. As a major source of employment in South Africa and with businesses that everyone can relate to as you can easily visit the stores yourself, this sector is always deserving of attention. Lewis: the pick of the litter The narrative around furniture group Lewis is nothing like it used to be. For years, this was a story of tepid growth and a focus on cost control, with a capital allocation strategy that took full advantage of the benefits of share buybacks. Now, Lewis is behaving like a growth stock with double-digit revenue growth and a colossal jump in Heps of 60.3% for the year ended March 2025. Such has been the extent of share price growth that they didn't do any share buybacks at all in the second half of the financial year! advertisement Don't want to see this? Remove ads Can they keep it up? This is the question on everyone's lips. Somehow, they've managed to boost credit sales (up 12.1% versus cash sales up 3.4%) without sacrificing the quality of the debtors' book. This is a holy grail outcome, as retailers that sell on credit must always consider the benefit of additional sales against the risk of credit losses. So far, so good at Lewis. The market is still wary of how sustainable this growth path is, so investors will be paying a great deal of focus to the next interim period. Spar retreats from Europe – well, mostly With Spar having been through such a terrible time in recent years, it was always unlikely that the pain would end with the disposal of the business in Poland. Things got so bad there that Spar essentially paid someone to take that asset away, with the group incurring debt to recapitalise the business in Poland before selling it for next to nothing. It's the equivalent of begging someone to arrive with a trailer to drag your broken old car off your lawn. advertisement Don't want to see this? Remove ads To add to the headaches, the business in Switzerland had been showing some worrying signs for a while, as food is so expensive in that country that Swiss residents literally cross the border to buy their groceries instead of going to their local retailers like Spar. Risks like these are extremely hard for South Africans to foresee, which is why it's advisable to stick to familiar markets rather than doing business somewhere completely different. Unlike in the case of Poland where they waited until the very end to remove that tumour from the group, Spar has decided to sell the Swiss business. They are also letting go of AWG in southwest England, which came as a surprise as there weren't any obvious concerns around that business. This leaves them with only the businesses in Southern Africa and Ireland going forwards. Of course, there's a difference between simply deciding to sell something and actually getting it sold, so it will be a while until the group is so clean and simple. In the meantime, investors have to suffer through diluted Heps from total operations dropping by between -24% and -34% for the 26 weeks to 28 March 2025. If you look at only the continuing operations, it should be between 0% and -15% lower for the period – still a poor outcome. They have a lot of fixing to do at Spar. Pick n Pay is a reminder that turnarounds are hard Speaking of fixing, there's still a long way to go at Pick n Pay. In fact, with the results for the 53 weeks to 2 March 2025 now out in the wild, the group has noted that they only expect their core Pick n Pay segment to break even by 2028. CEO Sean Summers has agreed to extend his contract until then to help drive that outcome. advertisement Don't want to see this? Remove ads This leaves the group in a situation where the controlling stake in Boxer is doing the heavy lifting, with the plan being to stem the bleeding in Pick n Pay as quickly as they can. There are at last some encouraging signs, like an uptick in like-for-like sales, but Pick n Pay will have to fight every step of the way in a market that is a bloodbath of competition. advertisement Don't want to see this? Remove ads If you dig into the underlying earnings or read the company announcements, just be cautious of getting excited about the trading profit line. Due to silly accounting rules, lease costs (which are obviously substantial for retailers) are actually recognised in net finance costs, which come in below trading profit. In other words, trading profit ignores lease costs, so it's a very flattering view of profitability. This is why Pick n Pay clarifies that their breakeven goal for 2028 is based on trading profit net of lease costs, which is the correct way to look at things. Dis-Chem keeps delivering – but did the market want more? With Dis-Chem's share price closing 6.3% lower on Friday after the release of results for the year ended 28 February 2025, you would be forgiven for thinking that the numbers were weak. Instead, we find Heps growth of 20% and a similar increase in the total dividend for the year. Sure, Dis-Chem is now on a demanding Price:Earnings (P:E) ratio of 24.4x based on latest numbers, but could the market really have been expecting so much more than 20% growth in earnings? In such a case where the share price move isn't easily explained by the earnings, it's best to skip to the outlook section of the announcement to see if there are any clues there. Dis-Chem notes a constrained consumer environment, but we are hearing that story everywhere and it's not exactly anything new. Helpfully, they've also given a sales update for 1 March to 27 May (i.e. about the first quarter of the new financial year) that reflects 8.6% growth in group revenue. This is even better than the 8% full-year growth that they just reported! Comparable pharmacy store revenue has accelerated from 4.1% for FY25 to 4.6% for these past few months. Perhaps the worry was around growth in wholesale revenue to external customers, which slowed down significantly from 22.1% to 13.6%. Still, that really shouldn't be enough to drive a 6.3% drop in the share price. advertisement Don't want to see this? Remove ads advertisement Don't want to see this? Remove ads This share price dip comes after a strong 30-day performance in the market, so it may be due to profit-taking by punters in response to earnings. Regardless, the underlying business is strong and Dis-Chem has continued to deliver for investors despite the pressure on consumer spending. As local retail businesses go, this is one of the best. DM
The Citizen
5 days ago
- Business
- The Citizen
Spar bleeds billions: can the retailer be saved?
Spar said the value of its struggling Swiss and English assets had fallen by R4.2 billion. One of South Africa's biggest grocery retailers, Spar, has been navigating a challenging economic climate for some time. It began with closing stores because consumers were not buying enough food. But now the retailer is taking bigger steps, as it offloads its Spar Switzerland and Appleby Westward Group (AWG) business. 'Shareholders are advised that, following this strategic review, the group is exploring divestment options for Spar Switzerland and AWG,' said the retailer in its SENS announcement on Thursday. That was the beginning of outlining the pain the retailer experienced during the 26 weeks ended 28 March 2025. The retailer stated that the value of its struggling Swiss and English assets had decreased by R4.2 billion. ALSO READ: Is Spar in trouble? Retailer closes stores as sales decrease Tough times for Spar The retailer has warned shareholders that headline earnings per share could decline by 24% and 34%. The warning is released ahead of the publishing of financial results on 4 June 2025. According to the Johannesburg Stock Exchange (JSE) listings requirements, companies are required to publish a trading statement as soon as they are satisfied that a reasonable degree of certainty exists that the financial results for the period to be reported on will differ by at least 20% from the financial results for the previous corresponding period. Spar said it is in talks with a UK-based business that is well-positioned to develop and grow AWG in South West England. In Switzerland, it has been in talks with parties with extensive business interests in the region and experience in European food retailing and distribution. Spar Swiss and AWG 'Total impairments of approximately R4.2 billion were recognised, including R3 billion in Switzerland and R1.2 billion in AWG. The impairments take into account the fair value of the disposal groups less costs to sell,' said the retailer. Delivering further financial losses, Spar said that the divestment of its Polish business resulted in a loss on disposal of R531 million during the interim period. 'This loss has been recognised in relation to the sale of the Polish operation and takes into account the satisfaction of certain suspensive conditions that were pending at the reporting date but have since been fulfilled, enabling completion of the disposal. 'The fulfilment of these conditions resulted in the final adjustments to the disposal proceeds and associated costs, and there have been no further cash outflows since the disposal became wholly unconditional and was implemented on 31 January 2025.' ALSO READ: Spar Group agrees to end long-term exclusive leases in malls South Africa performance The Sens announcement further details that in southern Africa, the groceries and liquor segment is expected to deliver modest top-line growth on a comparable basis, while operating profit is expected to maintain solid momentum. 'The KwaZulu-Natal distribution centre continued its positive trajectory, reflecting improved profitability. This performance, together with continued focus on cost discipline, translated into modest operating margin expansion on a comparable basis.' Spar said that Ireland delivered a resilient performance in a challenging 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 gains were partially offset by adverse foreign currency translation effects on consolidation.' Strengthening the balance sheet Spar said it had made substantial progress in strengthening the balance sheet, with the successful refinancing of its South African and Swiss facilities, improving liquidity and reducing funding costs. 'The group anticipates that the successful completion of the aforementioned divestments will materially deleverage and strengthen the balance sheet further.' NOW READ: Here's how much the CEOs of SA's largest retailers are paid
IOL News
5 days ago
- Business
- IOL News
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.
RTÉ News
26-05-2025
- RTÉ News
'Off the scale' - Retailers share stories amid rise in shop theft
Shop thefts have risen by nearly 47% over the past decade, figures from the Central Statistics Office show, with significant increases recorded in almost every garda division across the country. The only divisions to see a decrease over that period were Cork West and Dublin's North-Central region, which includes Mountjoy, Store Street and Bridewell garda stations. Areas with the largest increases in the same period include Meath (138%), Sligo/Leitrim (111%) and Galway (96%). Gardaí say that reporting of shoplifting increased significantly during 2024 and has remained at that higher level into 2025. In the first three months of this year alone, more than 8,000 incidents of theft from shop were reported, with nearly 2,000 arrests and more than 4,750 charges or summonses issued. Gardaí say many of those charges relate to offences committed last year. Tonight, Upfront with Katie Hannon hears from those directly affected, as theft, intimidation and violence become a daily reality for many in the retail sector. Among them is retail worker Himanshu Kumar, who made headlines last October when CCTV footage emerged of him being robbed with a large knife at a shop in Dundrum, Co Dublin. He says it all happened very fast. "Two guys came with their faces covered," Mr Kumar said in an interview prior to the programme. "My colleague was cleaning the coffee machine, and I was counting the till. The other guy came in over to the till - he flashed the knife at me and told me to just open the till," Mr Kumar added. "I thought he could do anything to me, so I just waited and turned the key on the till". Mr Kumar says the man took "around €1,500". "We were terrified," he said. "I was thinking I could do something, but my sixth sense was not to as they could do anything with the knife. "The knife was bigger than the knife we use in the deli," he says. Mr Kumar believes there should be a stronger garda presence in the area. "There has to be more patrolling in this area. Teenagers are taking advantage of the law here. "They know guards can't do anything - they know the law favours them because they're under 18". Calls for change Mike Gleeson, who runs five Spar shops in Limerick, including two with filling stations, says losses from theft last year were "in the hundreds of thousands". "Since about 2019, things went off the Richter scale," he said ahead of the programme. "The biggest problem is the system for penalising [people who steal] has broken down. "The guards do catch them left, and right and centre - but it falls apart once it enters the courts system. "We don't have enough prison spaces and we're not going to have, so we have to bring out a system where people are sanctioned in a different way." Mr Gleeson would like to see compensation paid directly by those who steal. "They have to be penalised through their pockets from source," he explains. "We're looking for payback legislation to be introduced. If you commit a crime, you get a fine like a parking fine. "If you stole €50 you should pay a €50 fine and €50 as compensation too - we should double it just to have a deterrent. "It should be taken from source of income - it's the only way to hit them in the pocket." Mr Gleeson also says fines for those under 18 should be paid by their parents or guardians. In response to growing concerns from the retail sector, a bill aimed at creating specific offences for assaulting, threatening, harassing or abusing retail workers is currently at second stage in the Seanad. An Garda Síochána has also launched Operation Táirge, a national initiative targeting shop theft and related offences. Meanwhile, the Irish Small and Medium Enterprises Association estimates that retail crime is now costing businesses more than €1.62 billion annually.
The Courier
20-05-2025
- Business
- The Courier
Perthshire couple sell post office and village store after 21 years to begin 'next adventure'
A Perthshire couple have sold their post office and shop after 21 years to start a 'new adventure.' Simon and Alison Gray have owned Strathtay Stores and Post Office for 21 years. The couple have sold the business and will celebrate their final day of trading on May 31. The store will reopen in late June under new ownership and will remain as a post office and shop. Simon said locals will be pleased the Spar shop is continuing, with the post office also being transferred to the new owner. The Strathtay community is planning a farewell party for Simon and Alison on Friday May 30. Simon, 54, told The Courier what the local support has meant to them. 'It's a really nice touch for them to do that for us. 'We have loved being part of the community. 'We've seen lots of people come and go and we've loved taking part in various committees. 'We ran the shop during Covid, when the supermarkets were closed, and there was a queue outside the shop every day for weeks, so we met lots of people we didn't know and made new friends.' The couple are planning a move to the Borders as one of their daughters is starting a new job in Northumberland. Simon added: 'It's been a lovely area to bring up our two girls, Rachel's 22 and Erin's 19, it's been a lovely community. 'We're sorry to go, but we feel the time is right. 'We're not getting any younger and we'd rather do it while we can, rather than later on when we have to sell it. 'That's one of the reasons. 'We're sad to be leaving but happy that it's been sold. 'Off to our next adventure – wherever that may be!' Elsewhere in Strathtay, a 71-year-old B&B owner has revealed how she became an Instagram gardening guru with 50,000+ followers.
