Retailer Spar’s shares fell 15% to close at R105.70 after it said yesterday it expected lower earnings for the six months ended March 31, 2023 as load shedding takes a toll and amid a challenging consumer environment.
It now expects its headline earnings per share to slide between 25% to 35% in a range of between 417.7 cents to 482.0c, while its earnings per share were likely to fall between 25% to 35% in a range of between 393.6c to 454.1c.
“Shareholders are referred to the February trading update wherein the group announced that, inter alia, all its markets continued to experience inflationary cost pressures,” it said.
Spar estimated that the added cost of diesel incurred by its retailers required to run generators during the period, amounted to more than R700 million.
“Our retailers have experienced a significant increase in operating costs, primarily driven by the increased cost of diesel required to run generators during the higher levels of load shedding, coupled with higher repairs and maintenance costs, and product wastage, as generators occasionally fail under extended periods of usage,” it said.
In the interim period Spar increased turnover by 7.9% to R72.9 billion.
Spar Southern Africa saw total turnover growth of 5.6%. Combined core grocery and liquor turnover growth was at 6.5%, with grocery and liquor sales both impacted by the SAP software go-live challenges experienced at the KwaZulu-Natal distribution centre.
This as the Spar grocery wholesale business increased sales by 7.9%, while Tops at Spar liquor sales declined by 1.9%, primarily impacted by the high level of sales experienced in the prior comparative period, due to the easing of Covid-19 liquor trading restrictions in September 2021.
Build It reported a decline in turnover of 3.8%, which is reflective of the intense slowdown in the building sector, with the manufacturing of building materials severely impacted by the increased levels of electricity load shedding.
BUSINESS REPORT