Spar reports overall FY revenue growth of 16.8% to R42.5bn

Its results did not include figures from Spar Switzerland as that acquisition became effective on April 1, the first day of its new financial year.

Revenue from its South African stores grew 9% to R36.8bn, accounting for 87% of the group's total revenue.

Its aftertax profit grew a more moderate 5.3% to R825.4m after absorbing food inflation. Spar declared an interim dividend of R2.55, a 6.7% increase from the matching period's R2.39

Besides its flagship Spar grocery stores, the group also operates liquor chain Tops and hardware chain Build. Its South African Spar stores grew turnover 9.2% to R31bn, underpinned by liquor sales that were up 12.4%.

"Turnover growth significantly exceeded internally calculated food inflation of 4.5% for the period," CEO Graham O'Connor said.

While Spar Ireland's revenue jumped 44.7% in rand terms, in euros it grew 5.4%, which was "substantially higher than the reported internal deflation of -0.5% for food and nonalcoholic beverages and inflation of 0.4% for alcohol and tobacco products for the same period".

"Food inflation is showing signs of increasing substantially in the short term due to higher price pressures expected from agricultural outputs as the effects of the drought continue," O'Connor said.

The past financial year's results were boosted by Easter falling in March this year, but O'Connor said the group's overall turnover growth for the first seven weeks of the current financial year made him confident the group "is positioned to maintain this growth in the second half of the year".

Source: BDpro