In its latest results, the group reported a profit of about $64.4 million (R1.1 billion) from ongoing operations in South Africa and neighbouring markets.
But this was more than offset by a $343.8 million (R6.1 billion) loss from discontinued operations in Switzerland and the UK.
SPAR is also set to receive additional contingent payments of up to CHF 30 million (around $37.3 million) if certain earnings targets are met by 2027.
European exits deepen losses but strengthen balance sheet
However, the disposal triggered a cash outflow of CHF 31 million (approximately $38.5 million), which notably included a CHF 11.5 million (about $14.3 million) payment to the Swiss competition authority.
The exit followed an earlier pull-out from Poland, where SPAR sold the business for around R185 million but still had to commit about R2.7 billion (roughly $158 million) in recapitalisation.
In addition to these transactions, SPAR recognized impairment charges on assets, including goodwill and right-of-use leases tied to corporate stores in Southern Africa, as well as on its remaining Swiss and UK operations.
The group said these actions were taken to align the carrying value of its assets with their realistic cash-generating potential given current market conditions.
On a positive note, net debt fell to roughly R5.4 billion (about $316 million), down from R9.1 billion a year earlier, largely thanks to the European exits.
Still, the overall income statement swung dramatically: from a modest profit of R158 million in FY24 to a loss amounting to R5.1 billion, or about US$298 million.
Earnings per share dropped from 182.7 cents to a loss of 2,507 cents. The company also refrained from declaring a dividend.
South African operations deliver stability amid weaker consumer spending
Despite the turmoil abroad, the Southern Africa business delivered encouraging results. Improved wholesale execution, retailer support programmes, and lower fuel-related logistics costs helped stabilise performance in the latter half of FY2025.
Merchandise revenue grew by 2.9 per cent in H2, lifting full-year revenue by 2.3 per cent. The group’s Groceries and Liquor division posted a 1.9 per cent sales bump, while the “Build it” segment rose by 2.4 per cent.
Meanwhile, SPAR Health, driven by its Scriptwise wholesale channel, saw revenue climb by 13.2 per cent. In another noteworthy development, the newly launched Pet Storey brand, following the acquisition of the Pet Masters Group, has begun to gain traction, with all 12 former Pet Masters stores converted by the end of November and a promising pipeline for further roll-out.
SPAR’s results reflect a company in transformation. The painful restructuring in Europe led to a hefty loss, yet the stronger footing in Southern Africa could provide a foundation for a more focused, regional growth strategy.
