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Johannesburg - Supermarket group Spar [JSE:SPP] (SPP) on Tuesday reported diluted headline earnings per share (Heps) of 264.6c for the six months ended March 2010, compared with 234.7c a year ago. Heps was up 14.7% to 278.1c.
An interim dividend of 14 cents per share was declared, up 14.8% from a year ago.
Despite a highly challenging trading period and lower inflation levels , the group's turnover grew 8.8% to R17.5bn, while operating profit increased by 13.2% to R685.1m.
The group said operating expenditure was well controlled, being only 4.6% up on the prior year. Spar said this performance was due to the effects of lower fuel prices on delivery costs and a considerably reduced bad debt write-off.
Case volumes handled through the group's distribution centres increased 4.7% on the comparable prior period.
The group said consumer spending remained under pressure and the food retail environment was extremely competitive with aggressive pricing and promotions. Notwithstanding this, Spar's retail store turnover continued to grow ahead of the market.
Retail trading space increased to 894 306 m², with 19 new stores opened. At period end the group serviced 848 Spar stores - 249 Superspar, 459 Spar and 140 Kwikspar stores.
"Spar continued to focus on its responsible competitive pricing philosophy and on providing value through its house brand range. Driving retail growth remains the group's number one priority," it said.
Tops store numbers increased to 439, with 28 stores opening during the six-month period. Trading remained strong, with ex distribution centre turnover increasing 27.5% to R1.1bn. Tops continued to gain market share, Spar said.
Build It turnover was up 13.9% to R1.55bn, which the group described as a "very pleasing performance given the state of the industry and the current economic climate". Eleven new stores were opened, taking store numbers to 253.
Build It has leased a distribution warehouse in Durban and will shortly begin sourcing product for direct supply ex distribution centre to retailers. It is estimated that over the next few years, Build It will be able to supply about 15% of retailers' product requirements.
This new venture will improve pricing to the consumer and provide margin opportunities for retailers and the group's distribution centres, it said.
The extension to the group's South Rand distribution centre was completed during the period under review, with the final cost of the project being R265m.
Construction of a new perishable facility at the Lowveld distribution centre is progressing according to timetable and budget, with anticipated handover of the facility scheduled for July 2010. The group estimates that 2010 capital expenditure will not exceed R200m.
Looking ahead, the group said it expects the tough trading environment to continue for the balance of the financial year.
However, slightly higher inflation levels and the positive sentiment generated by the 2010 Fifa World Cup should lead to improved growth prospects.
- I-Net Bridge
An interim dividend of 14 cents per share was declared, up 14.8% from a year ago.
Despite a highly challenging trading period and lower inflation levels , the group's turnover grew 8.8% to R17.5bn, while operating profit increased by 13.2% to R685.1m.
The group said operating expenditure was well controlled, being only 4.6% up on the prior year. Spar said this performance was due to the effects of lower fuel prices on delivery costs and a considerably reduced bad debt write-off.
Case volumes handled through the group's distribution centres increased 4.7% on the comparable prior period.
The group said consumer spending remained under pressure and the food retail environment was extremely competitive with aggressive pricing and promotions. Notwithstanding this, Spar's retail store turnover continued to grow ahead of the market.
Retail trading space increased to 894 306 m², with 19 new stores opened. At period end the group serviced 848 Spar stores - 249 Superspar, 459 Spar and 140 Kwikspar stores.
"Spar continued to focus on its responsible competitive pricing philosophy and on providing value through its house brand range. Driving retail growth remains the group's number one priority," it said.
Tops store numbers increased to 439, with 28 stores opening during the six-month period. Trading remained strong, with ex distribution centre turnover increasing 27.5% to R1.1bn. Tops continued to gain market share, Spar said.
Build It turnover was up 13.9% to R1.55bn, which the group described as a "very pleasing performance given the state of the industry and the current economic climate". Eleven new stores were opened, taking store numbers to 253.
Build It has leased a distribution warehouse in Durban and will shortly begin sourcing product for direct supply ex distribution centre to retailers. It is estimated that over the next few years, Build It will be able to supply about 15% of retailers' product requirements.
This new venture will improve pricing to the consumer and provide margin opportunities for retailers and the group's distribution centres, it said.
The extension to the group's South Rand distribution centre was completed during the period under review, with the final cost of the project being R265m.
Construction of a new perishable facility at the Lowveld distribution centre is progressing according to timetable and budget, with anticipated handover of the facility scheduled for July 2010. The group estimates that 2010 capital expenditure will not exceed R200m.
Looking ahead, the group said it expects the tough trading environment to continue for the balance of the financial year.
However, slightly higher inflation levels and the positive sentiment generated by the 2010 Fifa World Cup should lead to improved growth prospects.
- I-Net Bridge
