Grocery retailer Spar is exploring divestment options for Spar Switzerland and AWG after a strategic review of its European operations.
The group was in exclusive negotiations in respect of AWG with an established UK-based business well positioned to develop and grow AWG in the southwest of England, Spar said in a statement on Thursday.
In Switzerland, the group has been engaging established parties with business interests in the region and experience in European food retail and distribution.
“The group approach has been to engage parties whose interests align with the growth ambitions of the local management teams and retailer partners, and will ensure continuity for employees, suppliers and customers,” it said.
Both these assets had been classified as “held for sale”, it said.
“The classification of the Swiss and AWG operations as ‘held for sale’ and discontinued operations signals a decisive move to reshape the group’s portfolio,” MP9 Asset Management chief investment officer Aheesh Singh said.
The move underscored Spar’s intent to actively manage underperforming assets and bolster its financial position, he said.
Singh said that while this repositioning marked a significant turning point, “the true impact of these changes will only become clear in the subsequent reporting periods”.
The group advised that headline earnings per share (HEPS) from continuing operations for the 26 weeks to March 28 were expected to be flat to 10% lower at between 409.5c and 455c.
The group said the Southern Africa groceries and liquor segment delivered modest top-line growth on a comparable basis, while operating profit maintained solid momentum.
The KwaZulu-Natal distribution centre experienced improved profitability. This performance, together with continued focus on cost discipline, translated into modest operating margin expansion on a comparable basis, the group said.
Ireland delivered a resilient performance in a challenging trading environment, supported by improved gross profit and operating margins in local currency terms, as well as reduced interest expenses driven by lower gearing. These gains were partially offset by adverse foreign currency translation effects on consolidation.
Total impairments of about R4.2bn were recognised in the period, including R3bn in Switzerland and R1.2bn in AWG.
The divestment of the Polish business, which was concluded in January, resulted in a loss on disposal of R531m.
Spar expects to publish its results on June 4.
Update: May 29 2025
This story has been updated with more comment.
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