Avior Capital Markets - Spar Group Limited (135K) SPAR | Steadily diversifying

Report

Avior Capital Markets

Jiten Bechoo ...

Pratish Soni

SPAR | Steadily diversifying

Spar Group (SPP) FY '18 results were in line with our expectations with normalised HEPS growth of 9% yoy to 1 063cps. The core SA supermarket business is still underperforming peers on top line growth. With PIK and SHP expanding into the convenience channel, the trading environment is challenging. SPP is keeping inflation low to remain competitive and is enhancing its fresh private label product mix to support margins. Deflation in foreign operations is affecting foreign sales, but volumes remain robust. The weaker ZAR is supportive to foreign earnings. Foreign margins are improving with supply chain efficiencies and the closure of unprofitable stores.

26/11/2018 19 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 | Steadily diversifying

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

SA Banks | Low credit risk in commercial property | Time to buy SA banks

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