Yesterday Spar released interim results for the six months to 31 March 2017. The group recorded a 12.6% increase in turnover to R47.4bn, up from R42.1bn previously. This increase was partly attributed to Spar Switzerland, which contributed turnover of R5.2bn. Turnover from the BWG group increased by 1.6% in constant euro-currency terms, but due to significant appreciation in the R/€ exchange rate BWG recorded a 13.1% decline in turnover to R9.6bn. During the period, Spar’s gross margin increased to 9.6%, up from 8.7% previously, boosted by its international operations which operate in the higher margin convenience sector. Group operating expenses surged by 54.5%, although this large uptick was due to the inclusion of Spar Switzerland which was acquired with effect from the 1st of April 2016.On a comparable basis, operating expenses only increased by 8.3%. As a result, profit before tax rose by 7.8% to R1.2bn, while profit after tax increased by 10% to R908mn. Despite the increase, headline earnings per share declined by 0.9% to come in at 475.5 cents, down from 480 cents a year ago, mainly due to an increase in the weighted number of shares in issue. Lastly, the board declared a gross interim dividend of 240 cents, 5.9% lower than the 255 cents reported in the previous corresponding period.
On Tuesday, Spar (SPP) released a trading update for the 13 weeks to 31 December 2016. During the period, the group recorded a 16.9% increase in sales to R25.6bn, up from the R21.9bn reported in 2015. While you might think this looks positive, it was a miss on expectations and far too little for a stock trading on a historic PE of around 19x.
In its results for the year ended 30 September 2015, Spar saw turnover grow by 34.5% to R73.3bn, up from R54.5bn in the previous year. This was mainly due to the inclusion of the BWG Group, as the new Irish acquisition contributed 23%. Meanwhile, the operating profit increased by 23% to R2.3bn, from R1.9bn previously, while the group’s gross profit margin increased from 8.3% to 8.7%. During the period, new store openings brought the total local footprint to 1,935 stores, up from 1,864 stores in 2014. In addition, the total global footprint now stands at 3,267 stores, including those in Ireland and the South West of England. Spar grew headline earnings by 7% to R1.4bn during the period, translating into headline earnings per share growth of 6.9% to 835.5 cents. However, normalised headline earnings per share increased by 20.5% to 940 cents. Lastly, the board declared a final dividend of 393 cents per share, up from 345 cents previously. This brings the full year dividend to 632 cents, a 17% increase over the previous corresponding period.
Continue reading Spar: BWG boosts turnover