2017 Overview

The 2017 reporting year will be remembered as a period of consolidation for the SPAR Group.

Over the past three years, we have expanded through investments in Ireland, Switzerland and Sri Lanka, while continuing our support of retailers in cross-border territories such as Botswana, Malawi, Mozambique, Namibia, the Seychelles, Swaziland and Zambia. While faced with difficult trading conditions, low economic growth and a range of emerging wholesale and distribution risks and opportunities in these different territories, the profitability and success of our retailers remain our most significant strategic imperative.

Our 2017 retailer convention, which is an annual event, encouraged retailers from South Africa, and visiting retailers from Ireland and Switzerland, to ‘seize the moment’ by remaining focused on their businesses, and not to be paralyzed by external conditions beyond their control. The board and executive management engage with stakeholders such as government and regulators for positive change, while also managing our strategic risks in such a way that our distribution centres and retailers have the best possible support for success.

The group’s financial results for 2017 were modest, with revenue increasing by 5.4% and profit after tax by 0.3%. These results reflect the bleak state of consumer buying power and confidence, which has been exacerbated by retrenchments, political uncertainty and climatic challenges in South Africa. Difficulties such as drought and avian flu have had a significant impact on supply security, and led to additional pressure on retailer margins.

Despite these challenges, we are encouraged by the strong performance from our business in Ireland and the recent turnaround in Switzerland.

Other highlights for the year include the momentum created for our pharmacy business through the advanced negotiations for the acquisition of S Buys Group and the acquisition of a 47.87% shareholding in SPAR Zambia, the expansion of the emerging farmer programme as well as leadership changes that will ensure that we develop a strong pool of succession candidates over the medium term.