€56m payout for directors at Spar parent BWG after Christmas
South African group will assume full control of BWG in January
Leo Crawford, Group CEO, BWG Group, outside the relaunched SPAR Millennium Walkway store in Dublin City Centre.
Leo Crawford, the chief executive of Spar operator BWG, will share in a €56 million payout with two of his fellow directors in January, when the group’s South African majority investor buys from them the final 10 per cent of the business it doesn’t already own.
Johannesburg-listed The Spar Group (TSG) will then assume full control of BWG’s network of almost 1,400 Irish stores including Spar, Mace, Londis and XL, as well as a foodservice division supplying the catering industry and UK retail group Appleby Westward.
The deal brings the total paid to Mr Crawford and his partners, BWG finance director John O’Donnell and non-executive director John Clohisey, to €102 million for their stake. The three men owned one-fifth of the business prior to a €46 million deal last year for TSG to buy a 10 per cent tranche.
TSG first invested in BWG in 2014 when it paid €55 million for an 80 per cent stake in a move that helped BWG restructure boom-era property debts.
Although Mr Crawford and his partners, who once owned 100 per cent of BWG, had to relinquish majority control to deal with its debt hangover, the deal gave them breathing space to implement a turnaround plan that has seen group revenues grow by a third since then to reach €1.6 billion in the year to the end of September.
TSG has made a handsome return on its Irish investment, paying €157 million for a business now valued at about €500 million. Mr Crawford and Mr O’Donnell have agreed to stay on in their executive roles under TSG’s ownership to help BWG maintain stability in the pandemic era, which has spurred sales spikes for some of its suburban retail franchisees but caused steep falls of up to 55 per cent for others in commercial areas hit badly by restrictions.
Mr Crawford declined to comment directly on BWG’s results, which emerged yesterday in stock market filings in South Africa for TSG. But he acknowledged that some of BWG’s city centre retailers are “suffering” in the pandemic and said the group would work to support them.
In its results, TSG lauded what it said was a “remarkable” performance by BWG in 2020 to grow sales by €100 million in the pandemic from €1.5 billion the previous year. Much of its retail network has performed strongly, it said, but its foodservice division and cash & carry divisions have been hit badly.
Its Eurospar small supermarket format performed especially well, with sales up 11.5 per cent. Overall group sales including those generated by acquisitions, were up 6.3 per cent. Sales at the BWG Foods division in Ireland, which excludes Appleby in the UK, were up almost 3.8 per cent.
BWG’s operating profit was recorded in South African rand at R978.2 million (€37.5 million), up 42.6 per cent, but this was flattered by currency movements as the rand fell against the euro over the year.
Meanwhile, Mr Crawford, a past president of Ibec, called on State policymakers to give “some certainty” about the lifting of restrictions to the hospitality industry that are customers of its foodservice division: “You’ve got to feel for these people. They need to know when to stock up. They need certainty in the communication from Government.”