SPP delivered strong results for FY20, capping the transformational tenure of CEO Graham O’Connor. Over the past six years, SPP surpassed PIK in turnover and significantly increased its exposure to European markets. However, its rapid offshore expansion may have increased risks to the company, in our view. When Spar Ireland was acquired in 2014, it was similar to Spar SA, and the intent was to drive growth through sharing expertise, including leveraging off SPP’s leadership in supply chain and migrating BWG to larger-format stores. Subsequently, though, it grew mainly by acquisitions, evolving into a diverse set of businesses. The minority shareholders at both Spar Ireland and Spar Switzerland will exit this year, at a buy-out price of R2.2bn. Also, R2.0bn of borrowings are scheduled for repayment, which means SPP needs to secure financing for R4.3bn in FY21. In comparison to its peers, the growth of Spar SA’s grocery business in 2H20 appears disappointing, and we offer several reasons for its under-performance during this period.