Business
SPAR Shifts Focus Back Home as It Looks to Sell UK and Swiss Operations
SPAR Group is continuing to streamline its international footprint, confirming it’s in advanced talks to sell its businesses in the United Kingdom and Switzerland. This move follows the recent sale of its Polish operation and marks a significant pivot towards stabilising its core operations.
The South African-based retailer said it’s in exclusive negotiations with a UK firm that has the resources and market knowledge to take over the Appleby Westward Group (AWG), which operates in South West England. In Switzerland, SPAR is engaging with seasoned players who have strong ties to the region’s food retail and logistics sectors.
Both businesses are now officially classified as “held for sale” and considered discontinued operations in the group’s reporting.
“We’re focused on ensuring that future owners align with the ambitions of our local teams and customers,” said SPAR.
Focus Shifts to South Africa and Ireland
While offloading these European operations, SPAR has turned its attention to markets where it’s seeing more stable returns. In South Africa, the grocery and liquor divisions showed modest but steady growth, with a positive performance from the KwaZulu-Natal distribution centre helping boost operating margins.
SPAR Ireland also contributed positively, posting solid gross and operating profits despite tough economic conditions. Gains there were tempered slightly by currency exchange fluctuations.
Heavy Impairments and a Bleak Earnings Forecast
Despite operational improvements at home, SPAR’s bottom line has taken a substantial hit. The group reported impairments totalling R4.2 billion — with R3 billion linked to its Swiss operations and R1.2 billion from AWG in the UK.
The sale of the Polish business earlier this year also came at a loss of R531 million.
Looking ahead, the group has warned shareholders of a dramatic drop in earnings. For the six months ending March 2025, earnings per share (EPS) are forecast to plunge by over 1,000%, landing deep in negative territory between -2,100.5 and -2,321.7 cents per share.
However, excluding the discontinued operations, the results are slightly more favourable. EPS is expected to decline between 5% and 15%, which may indicate that the core business is more resilient than the headline numbers suggest.
Balance Sheet Gets a Lifeline
On a more positive note, SPAR reported progress in shoring up its financial foundations. The group has successfully refinanced its debt in both South Africa and Switzerland, reducing funding costs and improving liquidity. The anticipated proceeds from the UK and Swiss divestments are expected to significantly strengthen the balance sheet.
What’s Next for SPAR?
The group will release its full interim results on Wednesday, 4 June 2025, where investors and analysts will be watching closely to assess how well SPAR is navigating its transition and whether the planned exits will restore long-term value.
| Total Operations | 26 Weeks Ended 28 March 2025 Expected Range (%) | 26 Weeks Ended 28 March 2025 Expected Range (cents per share) | Interim Period Ended 31 March 2024 As Reported (cents per share) |
|---|---|---|---|
| HEPS | (34%) to (24%) | 276.1 to 317.9 | 418.3 |
| Diluted HEPS | (34%) to (24.0) | 275.9 to 317.8 | 418.1 |
| EPS | (>1,000%) | (2,100.5) to (2,321.7) | 29.5 |
| Diluted EPS | (>1,000%) | (2,097.9) to (2,318.7) | 29.5 |
| Continuing Operations | 26 Weeks Ended 28 March 2025 Expected Range (%) | 26 Weeks Ended 28 March 2025 Expected Range (cents per share) | 31 March 2024 As Reported (cents per share) |
|---|---|---|---|
| HEPS | (10%) to 0% | 409.5 to 455.0 | 465.0 |
| Diluted HEPS | (10%) to 0% | 409.4 to 454.9 | 464.8 |
| EPS | (15%) to (5%) | 375.7 to 419.9 | 451.7 |
| Diluted EPS | (15% to (5%) | 375.6 to 419.8 | 451.6 |
{Source: BusinessTech}
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