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Spar good for 12% growth in sales

Posted On Thursday, 12 May 2005 02:00 Published by
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Robust consumer spending in the face of low inflation helped newly listed retail chain Spar Group grow sales 12,3% to R6,6bn in the six months to March.

Nicola Jenvey

KwaZulu-Natal Correspondent

DURBAN — Robust consumer spending in the face of low inflation helped newly listed retail chain Spar Group grow sales 12,3% to R6,6bn in the six months to March.

The group owns and operates six distribution centres that supply and service independently owned Spar food outlets, Tops liquor stores and Build-it building material outlets in southern Africa.

Food giant Tiger Brands unbundled Spar last September to unlock shareholder value.

Spar Group CEO Peter Hughes said yesterday against a backdrop of strong competition and inflation of 2%-3% that the group achieved "satisfactory growth", with Spar maintaining its 26% market share within the major food chains.

Build-it and Tops achieved substantial growth on the back of the group’s drive into these businesses.

Across the group, Spar said it expected to open 130 stores in the current financial year, of which 67 have been launched.

Coupled with the continued upgrading of existing establishments, Hughes said the initiative would underpin future growth.

Spar ended the period with a 25,8% increase in net profit to R182,9m, translating into headline earnings a share of 107,6c (2004: 88,8c). Contrary to prelisting expectations, the group declared a 30c interim dividend.

Hughes said the business remained strongly cash generative and had slashed R204,4m off its overdraft since September, ending the period with a R150,9m overdraft.

The margins benefited from the cessation in the Tiger management fees, the discontinuation of the amortisation of goodwill arising from the Nelspruit Wholesalers acquisition, and a lower depreciation charge.


Publisher: Business Day
Source: Business Day
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