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Categories: Corporate Results

South African Food Retailer Spar Lifts Earnings

Source: Reuters
14/05/2008

Johannesburg, May 14 - South African grocery chain Spar Group increased headline earnings per share for the six months to March 2008 by 28.7 percent to 201 cents, the company said on Wednesday.

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Spar's operating profit rose 24.8 percent to 496 million rand ($64.96 million) and it said it was confident it would again achieve satisfactory revenue and profit growth during the remainder of 2008.

Headline EPS is the key profit measure for South African firms and excludes non-trading, capital and certain extraordinary items.

Spar Group said solid trading results were buoyed by strong volume growth.

"At retail, good organic growth, new store openings and aggressive marketing activity resulted in market share gains," the group said in a statement.

Spar Group revenue rose 21.1 percent to 13.1 billion rand.

"They've got good numbers, ahead of market expectations ... It looks like the market liked the numbers," said Tubby Goodwin, a trader at Investec Securities.

At 0850 GMT, shares in Spar were up 2.4 percent at 57.55 rand.

The group said its Spar retail outlets traded well in a competitive market -- and added 15 new stores to its existing 802 -- while liquor chain stores TOPS had achieved excellent sales growth, opening 36 new stores to take its total to 321.

"TOPS has not only become the biggest retail liquor chain in store numbers, but is now measured as being the largest liquor chain in terms of turnover," the group said.

It plans to open more, it said.

To deal with power challenges, the group had installed diesel generators at four of its six distribution centres, with generators to be installed at the remaining two by the end of the financial year.

"The group is confident that it has adequate plans in place to cope with loadshedding," it said.

Spar expects to achieve satisfactory revenue and profit growth during the remainder of 2008.



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