Spar cuts debt and stabilises performance, but growth remains subdued in key markets

Stephen Grootes speaks to SPAR’s leadership about the retailer’s R5.08 billion loss for the 2025 financial year, the impact of legacy Poland debt on its balance sheet, and how its turnaround strategy aims to restore shareholder returns in the short to medium term.

Listen to the interview in the audio player below.

Spar has sharply improved its financial position over the past year, reducing Group net debt by 40% to R5.4 billion, down from R9.1 billion in 2024.

The retailer’s leverage ratio strengthened, helped largely by the sale of its loss-making operations in Switzerland and Poland and tighter working-capital controls.

Cash generation also improved to R5.4 billion, compared with R4.8 billion in the prior year.

Comparable Group revenue only grew 1.6% for the year, underscoring a weak first half, however improving to 3.5% in the second half. Gross profit from continuing operations rose 3.3%, with the margin inching up by 20 basis points to 10.8%.

Cost control played a critical role again, particularly lower fuel expenses, helping operating profit (before extraordinary items) rise to R2.8 billion. The operating margin remained flat at 2.1%, reflecting steady but unremarkable trading in a pressured consumer environment.

In South Africa, the company’s core market, trading conditions remained tough, with revenue increasing just 2.3% for the year, hampered by uted consumer spending. The second half showed signs of improvement, with sales rising 2.9%.

Operating profit in the region grew 6.8%, supported by upply-chain efficiencies and tighter wholesale execution.

Speaking to Stephen Grootes on The Money Show, SPAR Group CEO, Angelo Swartz says they are pleased with the growth, despite extremely tough conditions.

"The South African consumer, like consumers everywhere in the world at the moment are under a lt of pressure, despite inflation seemingly being at its lowest. The cost of living in SA has continued to increase and consumers, nearly at the end of a long interest rate cycle are under a considerable amount of pressure," said Swartz.

Commenting on the sale of its loss-making operations in Switzerland and Poland, Swartz said it was the correct decision at the right time.

"I think those business, whilst there's massive potential in both those markets to grow them, I just don't think the South African operator was the right operator to get the best out of those businesses, as well as the debt we carried which was the main concern, said Swartz.