SPAR reported a significant drop in earnings and profit for the 2023 financial year, pushing the retailer to declare no dividend for the year.
SPAR released its results for the year ended 30 September 2023 today, which revealed a significantly weaker performance from the retailer compared to 2022.
The company delivered turnover growth of 10.1%, increasing turnover to R149.3 billion.
“This is a commendable trading performance amid challenging markets with consumers under persistent financial pressure,” the retailer said.
“All geographies experienced the challenges brought on by consumers dealing with higher costs of living, driven by ongoing food price inflation, higher interest rates, fuel and energy costs during the reporting period.”
In addition, SPAR’s SAP implementation challenges at its KwaZulu-Natal distribution centre and the impairment of goodwill and intangible assets associated with SPAR Poland significantly impacted the retailer’s profitability for the period.
SPAR delivered an operating profit of R1.8 billion in 2023 – a 47% decrease from the R3.4 billion reported in 2022.
However, SPAR specified that, of the factors negatively impacting operating profit, approximately R1.4 billion is considered non-recurring.
SPAR’s earnings for the period also declined significantly in 2023.
Headline earnings per share fell by 47.7% to 606.6 cents per share, while earnings per share dropped by 81.3% to 208.6 cents.
In its Southern Africa market, SPAR reported an increase in turnover of 5.1%.
The retailer said trading in this segment was negatively impacted by the general consumer environment as well as continued electricity load-shedding.
On a combined basis, core grocery and liquor turnover increased by 6.1% for the period.
Core grocery turnover, including SPAR Encore, increased by 7.1% and reflects the ERP system challenges experienced during the reporting period.
Internally measured wholesale price inflation was 9.7% for the reporting period.
“Given the various challenges, the board of directors believes it prudent to not declare a final dividend for the year ended 30 September 2023.”