Leo Crawford, chief executive of Irish Spar franchise owner BWG, and two other directors of the group are in line to share a windfall of about €75 million in coming years as BWG's majority shareholder takes full control.
Mr Crawford, together with BWG's property director John Clohisey and its finance director John O'Donnell, own 20 per cent of BWG, with the rest owned by South African company, The Spar Group (TSG).
When TSG first invested in BWG in 2014, the Irish investors struck a deal with it to sell it their remaining shares under a pre-agreed pricing formula that depended upon future profits. That agreement is due kick in next year.
Johannesburg-listed TSG on Wednesday reported its financial results for the year to the end of September, including a detailed financial snapshot of BWG, which is unlimited and doesn’t file accounts at home.
TSG’s results put a putative valuation on the 20 per cent of BWG that it is obliged to buy of 1,216 million Rand (€75 million). It will make the first payment to the BWG executives in December 2019, with more due in 2020 and 2022.
Meanwhile, TSG’s results confirmed that stockpiling by consumers of bread and other food items during this spring’s cold snap, as well as demand for cold drinks during the hot summer, helped swell BWG’s annual sales by 4.5 per cent to €1.5 billion. BWG’s profits were reported in Rand only, up 15 per cent to 538 million Rand (€33.2 million).
All brands grew
As well as Spar and Eurospar, BWG also owns retail brands including Mace, Londis and XL. TSG said that all of BWG's brands grew in the year to the end of September. Its store network increased by a net 41 outlets to 1,371
BWG also invested in its wholesale business during the year, buying the 4 Aces wholesale group in May. When its effect is stripped out, BWG group sales still rose 2.8 per cent.
Acquisitions and growth within BWG’s Foodservice division helped to drive its revenues ahead by 14.7 per cent, while BWG Wines was up by 5.5 per cent.
BWG recently launched a new strategy for Spar and Eurospar in the Irish market, centred on refurbishments, more in-store dining and a shift to digital sales techniques. It is also aiming to expand the brands’ footprint in Ireland with about 45 new outlets.