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A company logo for the South African supermarket chain SPAR Group is seen on a trolley outside a store in Johannesburg, South Africa, June 7, 2022.
Retailer Spar reported a rise in annual profit, amid a trading environment marred by inflationary pressures.
The retailer says the trading environment across its territories continues to be challenging with high inflation in food, fuel and energy.
However, the group says these pressures are starting to show signs of easing in some areas.
Spar Group has operations in South Africa, Ireland and South-West England as well as Switzerland.
In its South African operations the group reported a 3.7 percent increase in turnover. This is despite the country’s trading environment characterised by high inflation, high interest rates and low GDP growth.
Spar CEO Angelo Swartz elaborates, “I think generally the economic environment across the globe has been challenging for all of us, South Africa obviously looking a lot more positive. Our financial year runs from October to September so really the South African business saw the benefit of that towards the tail end of the year.”
Earlier this month, the group announced it sale of its Poland operations. The disposal of the Polish business is expected to be finalised by the end of this year.
Swartz say that business has been challenging.
“So, as you know we’ve had an investment into Poland some 5 years ago. It has been a challenging market for us, obviously the timing of going to Switzerland was also quite challenging, taking ownership of that business few days before COVID lockdown in Europe so the first 2 years were challenging for reasons outside of our control.”
Sasfin Securities Portfolio Manager, Muhammed Wagley says the company’s performance was overall disappointing.
“I think initially the market reacted relatively negatively to that and I think the dividend was probably a big reason as to why that was the case. I think performance wise; it was a little bit disappointing, I think they’re still seeing some headwinds from failing to fully recover from the SAP implementation thing which was one of the big stories of last year.”
At the same time, Spar Group says its IT system, SAP has made significant progress in resolving its integration issues.
