Spar full-year profits up, sees challenging 2010

The Spar Group reported a 19,5% rise in full-year headline earnings per share, excluding its black economic empowerment deal, and said it expects 2010 to be tough.

The group said headline EPS for the year to end-September increased by 19,5% to 484,8 cents, when excluding its black economic empowerment transaction in which it transferred 10% of its equity to two trusts to benefit employees.

Diluted headline EPS stood at 392,1 cents, up from 389,8 cents the previous year.

Spar declared a final dividend of 200 cents per share, up 29% on the previous year, while turnover rose 19,5% to R31,96-billion.

The company said it expects 2010 to be another challenging yet, but is positive about the opportunities for the business.

“It is anticipated that the current relatively low levels of trading activity will continue for at least the first half of the 2010 financial year, whereafter it is likely that volumes will increase,” it said in a statement.

Spar said it would focus on driving new business opportunities, to grow organically and to cut costs.

“Cash generation is forecast to improve as capital expenditure reduces and the dividend cover is maintained,” it said, adding that where appropriate, surplus cash would be utilised to buy back shares.

South African retailers have faced tough trading conditions as consumers rein in spending due to a recession in Africa’s biggest economy. - Reuters

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