The SPAR Group (SPP) investor relations material

Leadership transition and strategic focus

• Group CEO steps down after 19 years, citing personal reasons and alignment with board and new leadership team.

• Incoming leaders have been integral to portfolio simplification, balance sheet stabilization, and margin recovery planning.

• Appointment of a dedicated MD for Grocery and Liquor and a Chief Marketing Officer planned to reinforce execution.

• Leadership emphasizes a federated model with national engagement and accountability.

• Structured handover and focus on stabilizing KZN and optimizing corporate store portfolio over the next three months.

Trading environment and operational performance

• Group wholesale turnover up 2.1% for 18 weeks ended 30 January 2026; Southern Africa grew 0.9%.

• Retail sales in South Africa increased 1.9% (like-for-like: +2.25%), with retailer loyalty at 80.9%.

• Liquor sales in Southern Africa up 2.9%, with internal selling price inflation at 2.6% versus official food inflation of 4.3%.

• BWG Group in Ireland achieved 3.1% sales growth in local currency, supported by non-tobacco categories and food services.

• KZN underperformance driven by volume overshoot and logistics inefficiencies; 120-day stabilization plan underway.

Margin and cost management

• Margins reflect promotional intensity, cost inflation, and investment in systems transformation, with gross profit margins in Southern Africa declining.

• Cost base reset includes optimizing distribution, centralizing procurement, and enhancing logistics productivity.

• Margin recovery expected to be gradual and weighted to the second half as cost initiatives embed.

• Rising operating and wage costs, system transformation, and SAP rollout continue to pressure margins.

• Leverage remains aligned to 1.5x target; no covenant concerns.