The SPAR Group (SPP) H1 2025 earnings summary

Executive summary

• Completed exit from Poland, initiated disposals of Switzerland and AWG, and restructured group debt to focus on core Southern African and Irish markets.

• Achieved profit and margin growth despite muted sales, supported by cost discipline and operational focus.

• SAP rollout and debt restructuring are foundational for future efficiency and margin improvement.

• Discontinued operations (Switzerland and AWG) recorded post-tax losses of R4.4 billion, including R4.2 billion in impairments.

• Improved sales momentum post-H1, supported by Easter trade and cost-saving initiatives.

Financial highlights

• Group revenue from continuing operations was R66.1 billion, down 0.2% year-over-year; constant currency revenue up 1.1%.

• Group operating profit from continuing operations up 1.6% year-over-year; Southern Africa up 5.5%.

• Gross margin improved to 10.7% from 10.6% last year.

• Cash generated from operations at R1.9 billion for six months; net debt decreased.

• Free cash flow improved due to better working capital and lower capex.

Outlook and guidance

• Full-year SA operating margin expected at 2.1%-2.3%, likely at the lower end.

• Targeting 3% EBIT margin in Southern Africa by H2/FY26, with acceleration in sales required.

• SAP rollout to two more DCs by 2026, expected to drive further margin and working capital gains.

• Dividend resumption likely within 18 months, subject to gearing and cash flow.

• Encouraging sales and operating profit momentum post-period end.