JOHANNEBSURG – SPAR Group yesterday declared an interim gross cash dividend of 280 cents per share out of income reserves after swinging into a R1.7 billion profit for six months ended March 31, 2021.
The multinational grocery chain’s dividend rose from 200c last year as it saw its interim profits climbing by 28.1 percent following strong performances from its operations abroad. This as Spar delivered strong growth, increasing group turnover by 7.5 percent to R64.2bn.
Spar said the turnover in its operations in Switzerland rose by 11.1 percent to 21.6 percent for the six-month period, in spite of the region continuing to experience the impact of the Covid-19 pandemic with ongoing lockdown regulations.
Spar Poland’s turnover during the period grew by 32.2 percent from 26.9 percent though the mall-based stores have been significantly impacted by the closure of malls.
The group’s BWG Foods in Ireland and South West England also delivered strong turnover growth of 13.3 percent as consumers supported their local community stores during the extended lockdown.
However, Spar continued to reflect the weaker consumer spend and disruptions to the liquor business in the Southern Africa region, with a wholesale turnover growth of 3.1 percent.
Spar chief executive Brett Botten said turnover growth slowed significantly in the month of March 2021, as it lapped the extraordinary performance recorded in March 2020, when consumers stocked up in advance of the Covid-19 lockdown.
“Tops at SPAR continued to be negatively impacted by the reduced retail hours and lost trading days, effectively losing 72 trading days, approximately 40 percent of available trading days during this period,” Botten said.
“Although the liquor business has started to recover in the last quarter, the impact of the lost trading days saw wholesale liquor sales decline by 7.8 percent for the period.”
In a related category, Spar said the cigarette business was severely impacted by the initial restrictions on the sale of cigarettes. “This business has not seen any meaningful recovery since restrictions were lifted and turnover was down 13.1 percent,” Spar said.
Spar said the impact of Covid-19 in the short to medium term remained uncertain and trading conditions were expected to remain challenging.
It warned that the third quarter of the financial year will be impacted by the base effect of the prior year across all regions.
However, Southern Africa and revenue streams in the foreign regions are expected to benefit from the effect of a low base. “In South Africa, consumer spending is expected to remain constrained,” Spar chairperson Graham O’Connor said.
“The business will focus on supporting the independent retailers through focused promotional and marketing initiatives, as well as growing the house brands offering, thereby securing better value for consumers.”
Spar shares closed 0.33 percent higher at R185.05 on the JSE yesterday.