The SPAR Group (SPP) Investor Update summary

Strategic reset and business focus

• Announced the disposal of the Swiss business to exit a non-core, value-destructive investment and sharpen capital allocation on proven markets, especially Southern Africa and Ireland.

• Strategic review in 2024 led to the decision to dispose of Swiss assets to optimize returns and focus on core geographies.

• Future international expansion will be considered only with strong partner alignment and clear fit for the operating model.

• Management is now focused on growing operating margin, sales, and market share in Southern Africa.

• Upcoming trading update and results announcement scheduled for September and December, respectively.

Transaction details and financial impact

• Disposed entire shareholding in Swiss subsidiary for CHF 46.5 million (approx. R1,025 million), with potential earn-out payments up to CHF 30 million (R660 million) based on future EBITDA.

• Buyer assumed all outstanding debt of the Swiss business, reducing group debt by ZAR 3.2 billion and improving overall group gearing.

• Transaction resulted in a cash outflow of CHF 31 million (R683 million), including CHF 11.5 million (R253 million) reserved for a Swiss Competition Commission fine.

• All cross-guarantees and refinancing exposure to Switzerland are removed, strengthening the balance sheet.

• No further cross-guarantees exist for international subsidiaries, and the Irish business remains ring-fenced.

Earn-out structure and operational involvement

• Earn-out is based on Swiss business EBITDA targets for 2026 and 2027, with a maximum of CHF 30 million if both years exceed CHF 23 million EBITDA.

• Any future earn-out proceeds will be used to further reduce group leverage.

• No operational involvement in the Swiss business post-sale, but access to management accounts and budgets is retained for monitoring.