A Challenging First Half for SPAR

The SPAR Group today announced its trading update and statement for the 26 weeks ended 27 March 2026 (H1 FY2026), reflecting a challenging first half for the business, with earnings impacted by operational pressures, elevated promotional activity, higher levels of debtor provisioning and a further cleanup of the balance sheet.

Despite the weaker earnings outcome, progress is being made in key areas, as the refreshed leadership team accelerates focus on operational recovery and execution, deepening retailer partnerships and simplifying the business to support more sustainable long-term performance.

Key strategic priorities are being addressed with pace, including the divestment of non-core offshore assets, the strengthening of the Group balance sheet, and focus on operational improvement in the SA business.

While the Group continues to navigate a tough macro economic and competitive retail environment, there are several foundational improvements that have been implemented, including the new SA leadership team, a sharper focus on resolving matters at retail and on maximising marketing spend return.

Key H1 FY2026 financial highlights include:

• Group revenue increased by 2.1% to R15.5 billion, with growth in constant currency of 1.8%.
• Ireland (BWG Group) delivered another solid performance with 3.4% revenue growth (EUR) and improved gross profit margins.
• Build it posted a positive topline growth, supported by new rewards initiatives.
• SPAR2U continues to scale with strong year-on-year increases in online order volumes.
• KZN experienced unexpected operational missteps during the half, however corrective measures including new leadership team appointments, resulted in three consecutive profitable months post January 2026.
• SPAR Health continued its strong momentum with 26.1% revenue growth.

Group trading profit was impacted by margin compression in Southern Africa, increased promotional activity and support during Black Friday and more conservative credit provisioning given the challenging macro environment. Consequently, Headline Earnings Per Share (HEPS) from continuing operations are expected to be between 50% and 60% lower than the prior period.

Commenting on the results, CEO Reeza Isaacs, who took over on 1 March 2026, said the Group remains focused on improving execution and simplifying the business: “Our half-year earnings reflect a tough operating environment, an over-investment in Black Friday, as well as the costs of addressing operational and legacy matters. That said, we are determined to build a more stable foundation than we had 12 months ago, and we are encouraged by early progress”.

“The planned exit from the UK is now firmly underway, allowing us to focus our attention on Southern Africa and Ireland, while maintaining the discipline in execution and a ‘back to basics’ approach to supporting our retailers, which is critical to delivering a sustained recovery” continues Isaacs.

Under Isaacs, the Group has introduced several operational changes designed to deliver tangible benefits at store level, including:

• Warehousing and distribution efficiency: Under newly appointed MD for Grocery and Liquor, Jerome Jacobs, the Group is focused on improving distribution centre performance and pricing alignment to reduce friction for store owners.
• Merchandise and Marketing discipline: Newly appointed Chief Marketing Officer John Bradshaw will work closely with Merchandise Head, Gerhard Ackermann on improving both customer experience and value delivery, while tightening the Group’s promotional approach to ensure that events such as Black Friday drive volume, price perception and footfall while protecting margins.
• Cost realignment: A group-wide programme is underway to reduce operating costs and centralise non-trade procurement, with benefits expected to progressively accrue through the second half of the year.

While rising fuel costs and intensifying competition remain headwinds, the Group enters H2 FY2026 with a cleaner balance sheet, a streamlined international footprint and encouraging momentum in key areas of the business, including its specialised segments.

“We believe in the independent retailer model and have a path to sustainable recovery,” Isaacs concludes. “The areas we are addressing now is about making the SPAR model work better in practice – giving our retailers the confidence and tools they need to compete. Rebuilding the SPAR brand will take time, but the team and initiatives we have put in place are starting to bear fruit”.

The SPAR Group’s full H1 FY2026 results will be published on 10 June 2026.