Listed South African retailer Spar Group has reported a 16,8% increase in headline earnings per share to 121,7 cents for the six months ended March from a restated 104,2 cents at the interim stage last year.
Revenue rose by 22,6% to R8,2-billion from a restated R6,7-billion.
A dividend of 48 cents per share was declared, representing a 60% increase in the dividend paid at the interim stage last year.
On a like-for-like basis, the group’s turnover increased by 17,4%, while total turnover grew by 22,7%.
Spar said that turnover growth of its retail stores was also ahead of the average national retail industry sales growth of 12% (calculated at the end of February), resulting in an increased market share.
Its gross margins were marginally down at 8,58% due to a change in the sales mix and a move in the traditional nature of business from a commission basis to a drop-shipment supply.
The group’s operating profit before interest and tax came in at R310-million, up 18,3% from the comparative period’s R262,2-million, while pre-tax profit jumped by 21,2% to R315,4-million from a previous R260,2-million.
“A 21,2% increase in profit before taxation is a substantial increase. It’s really busy out there and the economy is pumping. Indications are that turnovers will remain buoyant for the remainder of the financial year, although inflation is expected to pick up marginally,” commented Spar Group CEO Peter Hughes.
He said a combination of factors contributed to the group’s strong performance, including the current momentum in the sustained retail spending boom, the noticeable shift in national demographics with more people moving into higher earnings brackets, and a sustained programme of store upgrades and new store openings.
In the period under review, Spar opened 18 new stores — one Superspar, 11 Spars and six Kwikspars — taking the total number of stores supplied to 789. Taking into account store closures, total trading space grew by 2,5% to 704 583 square metres.
Spar said that as it remains strongly cash generative and largely debt free, a share buy-back programme will be implemented in order to utilise its cash resources more efficiently.
It was also announced on Wednesday that Hughes (60), who has been the group’s CEO for the past 15 years, will be retiring at the end of the year.
He will be replaced by the current MD of the Spar Group’s KwaZulu-Natal division, Wayne Hook (49), who has been with the group for the past 21 years. — I-Net Bridge