Spar Group profits jump as Irish unit included in results

South African retail group Spar has announced first-half profits after tax that were 22 per cent higher as it included results from its Irish unit for the first time.

BWG, the group behind Spar in Ireland, sold an 80 per cent stake for €55 million to Spar South Africa last year.

Spar said group profit after tax totalled 783.6 million rand (€58.9m) in the six months to the end of March, compared to 642.9 million rand (€48.3m) a year earlier.

Group turnover was up 40.7 per cent to 36 billion rand (€2.70bn) as against 25 billion (€ 1.88bn) for the first half of 2014.

Headline earnings per share (EPS), which is the main profit gauge in South Africa, rose 22.4 percent to 455.5 cents.

Spar said trading results for its Irish unit, which is the group’s fifth biggest division by turnover, were in line with expectation.

“The Irish retail market continues to show encouraging signs of recovery, as the economic recovery has been confirmed. Although increased consumer spending has yet to materialise, imminent tax reductions, increased levels of employment and reduced mortgage costs are expected to buoy consumer demand going forward.

BWG/Spar has more than 900 stores in Ireland and about 280 in Britain. The latest results show turnover at Spar’s Irish unit totalled 7.66 billion rand (€577.3m) in the first half.

BWG announced plans to acquire ADM Londis for €23 million in January. BWG said at the time it was committed to retaining and promoting the Londis brand and to investing in its future growth and development.

Spar said the timing of the BWG acquisition will likely impact on revenue growth performance in the second half.

The Spar Group is part of Spar International, which operates in 40 countries, 10 of which it entered into for the first time last year as it seeks to expand outside its home base.

Overall, it has 12,314 stores across the globe, 1,897 of which are in South Africa.