Avior Capital Markets - Spar Group Limited (135K) SPAR | Safe haven

Report

Avior Capital Markets

Jiten Bechoo ...

Pratish Soni

SPAR | Safe haven

Spar (SPP) continues to show stability with HEPS up 7% y/y in H1 â€˜19. The core SA supermarket business had even volume gains due to the consistency of convenience shopping through cycles. Inflation was above peers due to a lower mix of staples in the convenience basket. Ireland's supermarket business exhibits similar traits as SA's supermarket business. The Group's performance limits the threat of the proliferation of discounters and deflationary trends in developed markets. Strong sales growth in SA liquor and hardware, and the acquisition of a wholesaler in Ireland increased top line growth. Geographic and product diversification provide stability to growth of the income from the counter, which is currently c.4% pa.

23/05/2019 11 EN

Underlying

Spar Group Limited

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.

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ZAE000058517 Johannesburg Stock Exchange South Africa

Provider

Avior Capital Markets

Avior is a globally recognised capital markets research and trading firm, with the broadest research coverage within the region, with 100+ SA and 20+ SSA companies under coverage. Avior services clients from offices in London, Cape Town and Johannesburg.

Our research quality is consistently recognised in local and global surveys, with 18 analysts currently rated in their respective sectors (FM 2017). Value add through in-depth, innovative, high quality and consistent research with comprehensive underlying fundamental modelling supported by regular analyst and roadshow interactions.

Avior has proven that by working closely with our clients we can mutually develop dominant positions in certain sectors, going from strength to strength. Avior has a dedicated ESG team, having been ranked #1 in Corporate Governance research since 2008.

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Analysts

Jiten Bechoo

Pratish Soni

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SPAR | Safe haven

Pick n Pay Stores Ltd - Strategy, SWOT and Corporate Finance Report

SPAR GROUP reduced its risk exposure resulting in an upgrade to Positive

SPAR | Liquor cheer

Tiger Brands | ESG | Pressed to execute

SA Investment Strategy | Review of January 2020 for SA investors: Coronavirus weighs on the ZAR

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