SPAR Group share price declines as earnings forecast worsens

THE SPAR Group share price continued a downward trend on Friday after it warned that headline earnings per share from continuing operations were expected to be lower by 7.5% to 12.5% for the 52 weeks to September 26.

- EDWARD WEST

The share price was trading 4.35% lower at R103.50 on Friday afternoon, following a trend of over 24% lower from R137.69 a year previously.

The retail franchiser group stated in a trading statement that once-off impairments processed during the year were largely behind the fact that earnings per share from continuing operations were likely to be between 40% and 50% lower.

The lower headline earnings per share would be primarily due to the SPAR Poland exit financing costs and related tax.

However, the directors indicated that the group was committed to resuming returns to shareholders over the short to medium term, either in the form of dividends and/or share buybacks.

“The group's financial position has improved significantly over the past 12 months, and a stronger balance sheet, improved cash generation profile, and continued disciplined capital allocation will support this next phase of transformation and growth,” they said in a trading statement.