SPAR group’s earnings dip 7.6% due to high costs and IT issues

Amidst rising costs and IT system challenges, SPAR Group, South Africa's second-largest supermarket retailer, faces a 7.6% drop in half-year earnings. Hindered by finance costs and sluggish turnover growth, the company's profit before tax plunges by 11.2%. Despite a 7.9% rise in turnover, issues in South Africa and other regions hamper performance. With no dividend declared and operating expenses climbing, SPAR navigates through inflationary pressures and IT setbacks, impacting its bottom line..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..Reuters.South Africa's second-biggest supermarket retailer, SPAR Group, reported a 7.6% decline in half-year earnings as cost increases grew more than the management's lower-than-expected turnover growth, while IT system issues hit gross margin. .___STEADY_PAYWALL___.The grocer said profit before tax from continuing operations fell by 11.2% to 1.1 billion rand ($59 million) in the six months ended March 31 due to high finance costs..Read more: Spar Group plans to focus on South Africa, exit Poland to cut debt.Consequently, headline earnings per share declined to 465 cents, with the board deciding against declaring a dividend..The Group's turnover, which also include operations from Ireland, South West England and Switzerland, rose by 7.9% to 77.2 billion rand. The South Africa core grocery business delivered turnover growth of 4%.."All regions have been dealing with inflationary cost pressures and prolonged higher interest rates placing pressure on consumers and business alike," SPAR said.."This, coupled with the hangover of system issues in South Africa has impacted the results for the first six months of the year.".Operating expenses for the group rose by 9.6% to 9.2 billion rand..Last year, the Group struggled to successfully implement a SAP resource planning system at its KwaZulu-Natal (KZN) distribution centre, which impacted distribution operations in the province..Owing to gross margin management issues arising from the IT system challenges, SPAR Southern Africa's gross profit margin declined to 9.6% from 10%..As a result, the Group's gross profit margin remained flat at 11.9%, it said..Read also:.🔒 What went wrong when Shoprite tried to push northShoprite expands Checkers on-demand delivery to general merchandiseRating the best grocery rewards in SA: Xtra Savings vs Smart Shopper vs WRewards vs Spar Rewards.SOURCE: REUTERS

SPAR group’s earnings dip 7.6% due to high costs and IT issues

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