The SPAR Group is undergoing significant restructuring following a reported R4 billion loss in its interim results. The company is actively pursuing the sale of its British and Swiss business operations as part of a strategic reset.

Discontinued Operations lead to significant Losses

For the six months ending March 28, 2025, SPAR group classified SPAR Switzerland and its British business, AWG, as discontinued operations. These units contributed significantly to the group’s financial woes.

• Aggregated post-tax losses from these businesses totaled R4.4 billion.
• This figure includes impairments of R4.2 billion.
• SPAR Poland was already disposed of in January 2025.

The total loss from these discontinued operations,as reflected on the income statement,reached R5 billion. These sales are part of a broader effort to realise value and ensure business continuity in these regions.

Performance of continuing Operations

While the discontinued operations heavily impacted the overall results, the performance of SPAR’s continuing operations also faced challenges.

• South Africa experienced revenue growth of only 1.7%.
• Ireland saw a 0.6% decrease in local currency.

The company attributed this to ongoing pressure on consumer spending, compounded by low food inflation and the timing of easter, which fell in the second half of the financial year. Despite these headwinds, revenue growth in South Africa was supported by strong performance in the lower-income customer segment.

The Build It and SPAR Health businesses showed positive momentum, driven by strong retailer engagement and category performance.

Financial Impact and Shareholder Implications

The profit of R768 million from South Africa and Ireland was insufficient to offset the losses from discontinued operations, resulting in a substantial overall loss.

• The group’s total loss attributable to shareholders was R4 billion, including gains from exchange rate differences of R300 million.
• Earnings per share plummeted by over 7,500% to a loss of 2,211.1 cents per share.
• No interim dividend was declared due to the group’s capital allocation priorities and ongoing restructuring.

Future dividend decisions will depend on macroeconomic and operating conditions.

Strategic Outlook and Future Plans

SPAR Group CEO, Angelo Swartz, emphasized the progress made in simplifying and optimizing the company’s portfolio. He stated:

Over the period, we made deliberate progress against the milestones we set to simplify and optimise our portfolio and strengthen our balance sheet. This positions us well to harness future opportunities. Looking ahead, our focus remains on driving continued margin improvement, executing effectively in our core markets and delivering on the remaining elements of our strategic reset.

Angelo Swartz, SPAR Group CEO

the group is focused on driving profitability through category mix optimization, private label growth, and improved operational efficiency.Continued margin improvement is expected in the second half of the year as operational efficiency initiatives gain traction.

Growth Initiatives in Southern Africa

In Southern Africa, SPAR’s growth prospects are based on engaging various retail segments, leveraging its strategic partnerships with Uber Eats and Vida e Caffè, and increasing private label product penetration.

• The group is increasing its investment in customer convenience with the continued rollout of its demand digital platforms,SPAR2U and Build it 2U.
• The partnership with Uber Eats is now live in 130 stores, enhancing customer access and experience.
• Investment in pharmacist training facilities is underway to support the growth of SPAR Health, with the goal of doubling its pharmacy network by 2028.