Spar jumps after finding buyer for Polish stores

Spar climbed the most in almost nine months after South Africa’s second-largest grocer by revenue found a buyer for its ailing Polish unit.

The company, which is restructuring its obligations, cutting debt and focusing on its home market, has said withdrawing from the loss-making Polish unit will free up about R500 million of earnings a year.

“Our original target of exiting Poland by the end of this financial year will be met,” CEO Angelo Swartz said in an interview.

The stock climbed as much as 8.9% in Johannesburg trading, the most since the end of September last year.

It has dropped about 10% this year, twice the decline of the local six-member personal care and grocery store index.

The exit from its smallest market will help the retailer focus on South Africa, which accounts for more than 60% of its revenue.

Spar needs to take on rivals, including Shoprite and Pick n Pay, which are transforming their food business into well-defined premium and discount units — a strategy Spar currently lacks.

Swartz was appointed in October with a mandate to strengthen the retailer after top executives resigned over governance issues.

The company, which supports a network of independent retailers who trade under its brand through its warehousing and distribution business, earlier Wednesday reported a 7.6% drop in first-half earnings and operating profit that was little changed.

No interim dividend was declared.