BWG Foods, the owner in Ireland of Spar and Mace, boosted group sales by more than 3 per cent to €874 million in the six months to the end of March. This was in spite of its hospitality supply business being badly affected by lockdown, which also caused a surge in neighbourhood convenience stores.
Operating profits rose by 27 per cent to €36 million at the business, which includes 1,400 owned and franchised stores and which also owns the Mace, Eurospar, Londis and XL brands, as well the Appleby Westward convenience store business in the southwest of England.
BWG’s results were the jewel in the crown of the interim results reported in Johannesburg on Tuesday by its stock-market-listed parent, The Spar Group (TSG) recently acquired the final tranche of shares in BWG that it didn’t already own. TSG owns stores in South Africa, Ireland, Britain, Switzerland and Poland.
It told investors its Irish and Swiss operations were the main drivers of a 7.5 per cent rise in sales to 64.2 billion Rand, and a 28 per cent rise in operating profits to 1.75 billion Rand. BWG accounts for 22.5 per cent of the group, Switzerland 11 per cent, 64.5 per cent is in South Africa, and 2 per cent in Poland.
TSG first invested in BWG in 2015 when it invested €55 million to acquire 80 per cent from its owner-management team, led by BWG chief executive Leo Crawford, BWG finance director John O'Donnell and non-executive director John Clohisey. The deal gave the trio breathing space and capital to build a turnaround plan in the business, which had been struggling under boom-time property debts.
In recent weeks they shared the final €56 million payout of a total of more than €100 million for the other 20 per cent.
TSG told its investors on Tuesday that BWG had delivered a “strong result” despite the “maximum level of lockdown” for the last quarter. It said its hospitality and food-service business had been badly affected, as well as its city-centre convenience stores. But this was more than made up for by a surge in its wholesale and neighbourhood outlets. The 3.3 per cent euro sales rise translated into a 13.3 per cent rise in Rand.
Appleby Westward accounts for about 13 per cent of the BWG group, which acquired eight further stores in England over the period.
TSG highlighted that BWG had managed to cut costs by 2.6 per cent and “overall expenditure continues to be well managed by this business”.
It said there had been a “minimal impact” on costs and supply chains into Ireland caused by Brexit, from which retailers had been “largely protected . . . with almost no business disruption”.