Spar halves FY dividend to fund SAP rollout
Gfinancing the SAP strategy, as opposed to exposing the group to higher levels of debt. This way, the group said it will have the necessary flexibility to manage its medium- term capital requirements and pursue growth initiatives, while still paying out dividends to shareholders. The new policy – which sees dividends covered by headline earnings increasing from 1.45 times to 2.90 times – is meant to be in place for two consecutive financial years, including the current reporting period and the following period ending 30 September 2023.
Spar on Wednesday said it is pleased with the implementation of the SAP strategy thus far, having already launched it at its Southern
African central office in October. “The distribution centre in KwaZulu- Natal ( KZN) is due to launch the new system early in 2023, post the busy Christmas- trading period,” Spar said. “The remaining distribution centres in South Africa will follow individually after KZN, to minimise potential business disruption.” Spar’s foreign regions are also preparing their businesses for the
SAP implementation. Spar Group’s stock price took a significant knock on Wednesday, sliding by over 13percent to R142.30 a share by midday.
The JSE- listed group has posted a resilient full year performance, despite its franchise grocer model coming under pressure in South Africa and its out- of- Africa operations facing varying challenges – including the loss of retailers in the
Poland business.
Looking at overall group performance, Spar
PUBLIC NOTICE reported a 6percent increase in turnover to R135.6 billion. However, the group has noted that profitability has continued to be affected by the consequences of the pandemic, which hurt the first half of the current reporting period. Profits have also been hurt by the emergence of geopolitical tensions – sending fuel and energy costs globally to uncomfortable highs – as well as heightened levels of load shedding in its South Africa operations.
CORONAVIRUS – BOFINET
Full year operating profit increased by a muted
1.1percent to R3.4 billion this period. Diluted headline In earnings view per of share the ( Heps) current dropped global by outbreak 2.9percent stakeholders to 1 159.1 cents, and compared the public with 1 on the
193.7 cents in the previous comparable period.
Response Measures we have taken
Its Spar Southern Africa operations – the business which remain contribute in 65percent operation to group while turnover ensuring – the delivered strong growth in wholesale turnover, posting an increase of 8.4percent to R88.1 billion.
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As a precautionary measure for the protection 2021. BWG Group, the group’s Ireland and South
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Affordable 3. Discouragement of Small Meetings
Spar Switzerland, however, continued to feel the
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P202.00 height of the pandemic – reporting a 3percent decline in Social turnover. Distancing: “Swiss food inflation rates
4.
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5.
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Stakeholders who insist on physically tinue to seek cheaper alternatives in neighbouring countries likely as prices to experience increase,” the group delayed said. Spar service delivery Poland has also faced some challenges this period.
preferred service provider to According to the group, 58 retailers made the
service providers and end users. decision BoFiNet to exit Spar stakeholders Poland due to and low levels the public are of purchasing vigilant, loyalty. disciplined, This comes as and the Poland observe hygiene business Botswana battles retailer through loyalty issues, the which Ministry have of Health forced the group to terminate contracts with a group of retailers and undergo a restructuring of its distribution centres. “The loss of these retail
Botswana Plot 74769, Unit 3 + 267 3995500/ 599 ers has negatively impacted turnover growth in
Mowana Mews, Gaborone CBD
info@ bofinet. co. bw the second half of the financial year. But despite
Private Bag 00236 Gaborone
Botswana www. bofinet. co. bw this, Spar Poland delivered turnover growth of
8.2percent in PLN- denominated currency terms.
Operating losses for this region reduced by 9.5percent in local currency terms.” rocery wholesaler and distribution group Spar has slashed its dividend for the full year ending September by 51percent to 400 cents, putting into effect its new temporarilyadjusted dividend policy which looks to cut down dividends to fund the group- wide implementation of SAP. The policy change – which was first announced in February – was proposed by the group’s board as a more favourable alternative to