Spar reports 52.1% jump in H1 HEPS
Spar has reported a 52.1 per cent increase in headline earnings per share for the half year ended March and a 7.5 per cent jump in revenue from the sale of its merchandise. The retailer has also declared a dividend saying in the wake of a Covid-19 third wave, they anticipate a boom in turnover due to a surge in home consumption. Spar CEO, Brett Botten joins CNBC Africa for more.
Tue, 25 May 2021 10:43:01 GMT
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AI Generated Summary
- Spar reports a 52.1% increase in H1 headline earnings per share, driven by strong performance in offshore markets.
- The company sees growth potential in the upgraded budget stores and non-core division, Build it, despite softer performance in South Africa.
- Spar expects sustained growth in foreign regions as economies reopen, with a focus on local community shopping and food service channels.
Spar, the international retail giant, has reported an impressive 52.1% increase in headline earnings per share (HEPS) for the first half of the financial year ending in March. The retailer also announced a 7.5% jump in revenue from merchandise sales, exceeding market expectations. Spar CEO, Brett Botten, joined CNBC Africa to discuss the company's strong performance and future outlook. Botten attributed the robust results to the outstanding performance of the company's offshore businesses in Switzerland, Ireland, and the UK. Despite facing harsh lockdowns due to the third wave of the pandemic, Spar's businesses in these regions thrived due to a strong focus on neighborhood convenience shopping and food service. The acquisition of Store Service AG in Switzerland further bolstered revenue growth and operational profits in the region. However, Spar's performance in its home market, South Africa, was slightly softer, with an 8% growth in the core grocery business. Botten highlighted the significant growth in the budget division, which saw a remarkable 26% increase. He expressed optimism about sustaining this growth, particularly in the upgraded budget stores under Project B. The CEO acknowledged the impact of last year's lockdowns on consumer behavior, leading to a shift from malls to local community shopping. As restrictions ease and consumer behavior normalizes, Spar expects a gradual recovery in its South African operations. Looking ahead, Botten addressed concerns about the sustainability of performance in foreign regions as economies reopen and people return to restaurants and malls. In Ireland, Spar anticipates a boost in demand as people opt for staycations, driving business in retail stores and food service channels. The CEO also discussed the challenges faced in Poland, where the company is on track to break even by the first quarter of 2022. Despite being primarily a food retailer, Spar's success in the non-core division, Build it, has been remarkable. Botten emphasized the significant growth and profitability in the home-building sector, driven by the structural nature of sales. He hinted at further expansion opportunities in non-core areas, with new stores in the pipeline and ongoing store upgrades. Spar's impressive performance and strategic positioning have garnered positive investor sentiment, resulting in a surge in the company's share price. With a strong foundation in both local and international markets, Spar is well-positioned for sustained growth and profitability in the coming quarters.