​Spar Group’s H1 17A revenue grew by 12.6% y/y to ZAR 47.4bn in H1 17A; slowing from 16.9% y/y in Q1 17A and 2.1% below ACe. Sales growth was mainly aided by consolidation of Spar Switzerland revenues. Spar SA (68% of SPP revenues) sales growth remains muted at 4.9% y/y (ACe: +5.6% y/y) and BWG revenues declined by 13.1% y/y in ZAR (+1.6% y/y in EUR) due to a ZAR appreciation vs. EUR.
Group EBIT declined by 4.6% y/y to ZAR 1.21bn, 6% below ACe. 40bps decline in Spar SA margin together with operating loss in Spar Switzerland led to Group EBIT decline. Operating expenses increased by 55% y/y ( 16% above ACe).
HEPS at ZAR 4.75/share was 2% above ACe, with company reporting net finance income at ZAR 25.8m vs. our expectations of ZAR -37m and H1 16A at ZAR -119m.
Spar Group is a wholesaler and distributor of goods and services to SPAR and SaveMor supermarkets, Build it building materials outlets, TOPS at SPAR liquor stores and Pharmacy at SPAR pharmacy and healthcare outlets.Co.'s distribution centres provide goods and services to retail stores in South Africa, Swaziland, Botswana, Lesotho, Mozambique, Zimbabwe and Namibia. In addition, SPAR wholesales goods to independent SPAR stores in Zambia and Malawi.
Established in 2007, Arqaam Capital is a specialist emerging markets investment bank, bringing regional and international product offerings to the emerging markets. Arqaam Capital combines international best practice with expertise in the markets in which we operate. Our primary role is to provide financial intermediation and create investment opportunities for frontier and emerging markets investors looking to invest in their own markets and abroad, as well as international investors seeking opportunities in target frontier and emerging markets. Arqaam Capital is headquartered in the Dubai International Financial Centre (DIFC), with additional offices in Libya, Lebanon, Egypt, and South Africa.
Arqaam Capital's research platform provides the largest coverage footprint of MENA equities and one of the largest on the African continent with a total of 300 stocks under coverage. Arqaam Capital is ranked as one of the leading research providers in the region - a reflection of its broad coverage universe, its in-depth and high quality research, as well the compelling investment ideas that the team generates. The analysts closely analyze their sectors and issue in-depth company and sector research while the strategy team connects the micro with the macro, focusing on index analysis, macroeconomics and strategy research.
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