Latest news with #SparSwitzerland
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.
