Spar (SPP) FY23 – Results Snapshot

Diluted HEPS 606cps (-47.7% y-y).
Turnover growth +10.1% y-y, with SA +5.1%, Ireland +8.1% (EUR), Switzerland -3.3% (CHF) and Poland +5.0% (PLN).
GPM stable at 12.0% with lower margins in SA and Switzerland, and improved margins in Ireland and Poland.
Expense-to-sales ratio increased from 11.7% to 13.0% with expense growth of +22.1% y-y.
Operating margin dropped from 2.5% to 1.2%.
No dividend (FY22: 400cps), on temporarily adjusted dividend policy (for 2 years) to fund strategic investment in SAP.
Capex of R1.9bn and capex to sales ratio at 1.3% (FY22: 1.2%).
Gross debt increased from R7.6bn to R8.3bn but net overdraft decreased from R2.2bn to R1.7bn.
Financiers agreed to amend banking covenants. SPP not in breach of any covenants, no plans to raise capital from shareholders.
Results impacted by SAP implementation at KZN DC causing R1.6bn lost sales and R720m lost profit, and impairments.