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THE SPAR GROUP LTDTHE SPAR GROUP LTDTHE SPAR GROUP LTD

THE SPAR GROUP LTD

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Our opinion on the current state of SPAR(SPP)Spar (SPP) operates a chain of supermarkets with 2,402 stores across Southern Africa, and it also runs the Build-It chain (focused on hardware and building materials) and the Tops Liquor chain. The company has diversified internationally, with operations in Southern Ireland through its BWG group (which operates 1,392 stores) and in Switzerland with 388 Spar stores. Spar's extensive use of franchising has enabled it to become a significant competitor in the South African retail market. Spar’s international expansion into Ireland and Switzerland provides a solid rand-hedge component, which is a valuable buffer against currency fluctuations. However, this aspect of diversification is not fully reflected in its current market multiple. The company’s new operations in Poland have faced delays and challenges due to the COVID-19 pandemic. For the six months ending 31st March 2024, Spar reported a 7.9% increase in turnover, though headline earnings per share (HEPS) dropped by 7.6%. Operating profit for the group reached R1.6 billion, with a slight improvement compared to the previous period, but higher net finance costs negatively impacted profit before tax, which declined by 11.2%. In South Africa, Spar saw a 4.8% increase in wholesale turnover across all business units. The BWG Group in Ireland and South West England showed strong performance with turnover up 5.7% in EUR terms (16.0% in ZAR terms), while the Swiss business saw a 4.6% decline in turnover in CHF terms (but an 8.7% increase in ZAR terms). In its trading update for the 47 weeks ending 23rd August 2024, Spar reported a 3.5% increase in sales, with grocery and liquor sales up 6.1%, Build-It sales up 1.2%, BWG up 2.6%, and Spar Switzerland down 5.8%. Group turnover from continuing operations increased by 4.1% during this period, but exchange rate fluctuations and inflation negatively affected performance. On 4th September 2024, Spar announced that it would pay an estimated R2.7 billion to settle debts related to its struggling Polish operations in order to sell them to a local retailer for R185 million. This one-off cost caused Spar’s share price to drop sharply. Despite these challenges, the share appears underpriced at current levels, representing a potential bargain. The share broke through its long-term downward trendline on 12th June 2024 at 11,065c and has since risen to 13,259c. While the recent news regarding the Polish operations caused a price dip, Spar’s diversified operations and rand-hedge exposure could offer further upside, making it a worthwhile consideration for investors.
JSE:SPP
by PDSnetSA
Our opinion on the current state of SPAR(SPP)Spar (SPP) runs a chain of supermarkets across Southern Africa with 2402 stores. It also operates the Build-It chain in hardware and building materials and the Tops Liquor chain. The company has operations in Southern Ireland under the name "BWG," which operates through 1392 stores, and the Spar chain of 388 stores in Switzerland. Spar is expanding into Poland with the acquisition of 80% of Piotr i Pawel, which has 77 delicatessens, for 1 euro. This operation is expected to break even in about two years as its outlets are converted into Spar stores. Spar spent about 80 million euros to stabilize the Polish company. As a group, Spar is a very serious competitor in the South African retail industry, making extensive use of franchising to expand its network. The development of the new Polish enterprise has been frustrated by COVID-19. Its diversification into Ireland and Switzerland gives it a solid rand-hedge component which does not appear to be reflected in its multiple. In its results for the six months to 31st March 2024, the company reported turnover up 7.9% and headline earnings per share (HEPS) down 7.6%. The company said, "While the continuing Group delivered an operating profit of R1.6 billion with a marginal positive improvement on the prior comparative period, net finance costs negatively impacted profit before tax which declined by 11.2%. SPAR Southern Africa reported a total increase in wholesale turnover of 4.8% for all business units. BWG Group (Ireland and South West England) delivered a solid trading performance with turnover increasing by 5.7% for the period in EUR terms, and 16.0% in ZAR terms. Turnover for the Swiss business declined by 4.6% in CHF terms (increased by 8.7% in ZAR terms)." In our view, the share is now underpriced at current levels and represents something of a bargain. We advised waiting for a break up through its long-term downward trendline, which now appears to have happened on these latest results. Spar's diversified operations across different regions and sectors provide a degree of stability and a hedge against the rand. The company's performance in Southern Africa, despite the economic challenges, and its solid results in Ireland and Switzerland, suggest a robust underlying business. The Polish acquisition, though initially challenging, represents a long-term growth opportunity. Given these factors, Spar appears to be a good investment at its current price, especially after breaking its long-term downward trendline.
JSE:SPP
by PDSnetSA
Our opinion on the current state of SPAR(SPP)Vunani (VUN) is a black-owned financial services group with interests in asset management, investment banking, property, and stockbroking. It also has an interest in coal mining, which has been performing well with the rise in coal prices. In its results for the six months to 31st August 2023, the company reported revenue up 4% and headline earnings per share (HEPS) of 18.2c compared with 20.4c in the previous period. The company said, "The group generated total comprehensive income for the period of R35.9 million (2022: R39.3 million), while total profit attributable to equity holders of the company amounted to R28.9 million (2022: R32.3 million)." In a trading statement for the year to 29th February 2024, the company estimated that HEPS would fall by between 63% and 83%. From a private investor's perspective, the biggest problem with this share is that it is simply too thinly traded to be a practical investment. The low trading volume can result in difficulty buying or selling shares at favorable prices and may lead to increased volatility. While Vunani has diverse interests and has shown growth in some areas, the significant drop in HEPS and the thin trading volume make it a less attractive option for private investors. Potential investors should consider these factors and may want to look for more liquid and stable investment opportunities.
JSE:SPP
by PDSnetSA
1
Our opinion on the current state of SPAR(SPP)Spar (SPP) operates a chain of supermarkets across Southern Africa with 2,402 stores. It also runs the Build-It chain in hardware and building materials and the Tops Liquor chain. Additionally, Spar has operations in Southern Ireland under the name "BWG," which operates through 1,392 stores, and the Spar chain of 388 stores in Switzerland. The company is expanding into Poland with the acquisition of 80% of Piotr i Pawel, which has 77 delicatessens, for 1 euro. This operation is expected to break even in about two years as its outlets are converted into Spar stores. Spar spent about 80 million euros to stabilize the Polish company. As a group, Spar is a serious competitor in the South African retail industry, making extensive use of franchising to expand its network. The development of the new Polish enterprise has been frustrated by COVID-19. Its diversification into Ireland and Switzerland gives it a solid rand-hedge component, which does not appear to be reflected in its multiple. In its results for the year to 30th September 2023, the company reported turnover up 10.1% and headline earnings per share (HEPS) down 47.7%. The company said, "Of the factors negatively impacting operating profit, approximately R1.4 billion is considered non-recurring. Increased net finance costs due to rising interest rates significantly impacted profit before tax. Trading was negatively impacted by the general consumer environment as well as continued electricity load shedding. Internally measured wholesale price inflation was 9.7% for the reporting period. Our building materials business, Build it, reported a decline in turnover of 4.3%." In a trading update for the 24 weeks to 15th March 2024, the company reported turnover up 8.8%, with Southern Africa showing a growth of 5.7%. The company said, "Build it delivered pleasing sales growth of 1.1% after a sustained period of market contraction. The pharmaceutical business delivered excellent turnover growth of 17.7%, driven by increased loyalty from Pharmacy at SPAR retailers and growth in Scriptwise revenue." In a trading statement for the six months to 31st March 2024, the company estimated that HEPS would be between 3% and 13% lower. The company said, "The following factors impacted earnings from continuing operations during the current reporting period: • operating costs have been well managed, however, cost increases for the Group slightly exceeded lower-than-expected turnover growth; • the ongoing IT system issues at the KwaZulu-Natal distribution centre resulted in lost gross margin, impacting Southern African profitability; and • prolonged high interest rates have caused a significant increase in Group net finance costs." In our view, the share is now underpriced at current levels and represents something of a bargain. However, investors should wait until the share breaks up through its long-term downward trendline, which does not appear imminent.
JSE:SPP
by PDSnetSA
Another Failed Breakout for SparSpar Group rallied after a failed daily cycle 2, as is we are looking at a very short weekly cycle unless current cycle breaks back below R96.40, not entirely unthinkable given the following: 1. The move up saw declining volume. 2. The RSI & TSI have shown negative divergence. 3. RSI is overbought, failed breakouts on overbought conditions usually lead to quick reversal. History shows that Spar investors are no strangers to violent sell-offs & we could be back to the support of the parallel channel in little time. A close above the channel resistance would be a stop loss.
JSE:SPPShort
by runyamhere
Our opinion on the current state of SPPSpar (SPP) runs a chain of supermarkets across Southern Africa with 2402 stores. It also operates the Build-It chain in hardware and building materials and the Tops Liquor chain. It has operations in Southern Ireland under the name "BWG" which operates through 1392 stores and the Spar chain of 388 stores in Switzerland. The company is expanding into Poland with the acquisition of 80% of Piotr i Pawel which has 77 delicatessens, for 1 euro. This operation is expected to break even in about 2 years as its outlets are converted into Spar stores. Spar spent about 80m euros to stabilise the Polish company. As a group, Spar is a very serious competitor in the South African retail industry, making extensive use of franchising to expand its network. The development of the new Polish enterprise has been frustrated by COVID-19. It trades on a multiple of around 11,65 which should be compared with Shoprite on 23,53. Its diversification into Ireland and Switzerland gives it a solid rand-hedge component which does not appear to be reflected in its multiple. On 9th December 2022 Spar responded to allegations of discrimination and having granted fictitious and fraudulent loans worth about R11m to a small group of franchisors. On 19th January 2023 the company said that its auditors had assessed that one of the loans represented a reportable irregularity. Spar normally issues loans to enable franchisors to acquire loans to buy stores. In its results for the year to 30th September 2023 the company reported turnover up 10,1% and headline earnings per share (HEPS) down 47,7%. The company said, "Of the factors negatively impacting operating profit, approximately R1.4 billion is considered non-recurring. Increased net finance costs due to rising interest rates significantly impacted profit before tax. Trading was negatively impacted by the general consumer environment as well as continued electricity load shedding. Internally measured wholesale price inflation was 9.7% for the reporting period. Our building materials business, Build it, reported a decline in turnover of 4.3%". In our view, the share is now under priced at current levels and represents something of a bargain - but investors should wait until the share breaks up through its long-term downward trendline - which appears imminent.
JSE:SPP
by PDSnetSA
THE SPAR GROUP (SPP)SPP's price is currently moving within a trend channel, and it's testing the upper trend line as we wait for this week's earnings announcement. Looking at how the stock behaved before, we can see that attempts to break key support levels were met with resistance, forming lower highs. Target 1 around the 96.68 area. Caution: If the stock breaks above the trend channel with support, it could indicate a shift to a more bullish trend. NOTE: On November 23rd, Spar ($JSESPP) shared a trading update that caused a 7.1% drop in its stock price at the opening. They expect the operating profit for this year to be between R1.6 billion and R2 billion, down from R3.4 billion in FY2022. The expected earnings per share (EPS) could be 76% - 86% lower, and the headline earnings per share (HEPS) might be 43% - 53% lower compared to last year. Results will be published on SENS by 08:00 on Thursday, November 30, 2023.
JSE:SPPShort
by MarketMeistersTrading
Our opinion on the current state of SPPSpar (SPP) runs a chain of supermarkets across Southern Africa with 2402 stores. It also operates the Build-It chain in hardware and building materials and the Tops Liquor chain. It has operations in Southern Ireland under the name "BWG" which operates through 1392 stores and the Spar chain of 388 stores in Switzerland. The company is expanding into Poland with the acquisition of 80% of Piotr i Pawel which has 77 delicatessens, for 1 euro. This operation is expected to break even in about 2 years as its outlets are converted into Spar stores. Spar spent about 80m euros to stabilise the Polish company. As a group, Spar is a very serious competitor in the South African retail industry, making extensive use of franchising to expand its network. The development of the new Polish enterprise has been frustrated by COVID-19. It trades on a multiple of around 11,65 which should be compared with Shoprite on 23,53. Its diversification into Ireland and Switzerland gives it a solid rand-hedge component which does not appear to be reflected in its multiple. On 9th December 2022 Spar responded to allegations of discrimination and having granted fictitious and fraudulent loans worth about R11m to a small group of franchisors. On 19th January 2023 the company said that its auditors had assessed that one of the loans represented a reportable irregularity. Spar normally issues loans to enable franchisors to acquire loans to buy stores. In its results for the 47 weeks to 25th August 2023 the company reported sales growth of 5,9% with wholesale grocery sales up 8,1% and Tops liquor sales down 0,6%. Price inflation was 10,1%. Build It turnover was down 3,6% and BWG combined turnover was up 8,5% in euros. The company said, "The impact of the SAP implementation at KZN amounted to an estimated loss of turnover to the Group of R1.4 billion for the period, being approximately R786 million for the six months ended 31 March 2023 as previously reported, and an additional R638 million for the five months to August 2023". In a trading statement for the year to 30th September 2023 the company estimated that HEPS would fall by between 43% and 53%. The company blamed the unsuccessful implementation of a new SAP IT system in Natal, increased impairments and the sale of the group's assets in Poland. There was also lower-than-expected growth and increased finance costs. In our view, the share is now under priced at current levels and represents something of a bargain - but investors should wait until the share breaks up through its long-term downward trendline.
JSE:SPP
by PDSnetSA
Our opinion on the current state of SPPSpar (SPP) runs a chain of supermarkets across Southern Africa with 2402 stores. It also operates the Build-It chain in hardware and building materials and the Tops Liquor chain. It has operations in Southern Ireland under the name "BWG" which operates through 1392 stores and the Spar chain of 388 stores in Switzerland. The company is expanding into Poland with the acquisition of 80% of Piotr i Pawel which has 77 delicatessens, for 1 euro. This operation is expected to break even in about 2 years as its outlets are converted into Spar stores. Spar spent about 80m euros to stabilise the Polish company. As a group, Spar is a very serious competitor in the South African retail industry, making extensive use of franchising to expand its network. The development of the new Polish enterprise has been frustrated by COVID-19. It trades on a multiple of around 11,7 which should be compared with Pick 'n Pay on about 13,97 and Shoprite on 21,91. Its diversification into Ireland, Switzerland and now Poland gives it a solid rand-hedge component which does not appear to be reflected in its multiple. On 9th December 2022 Spar responded to allegations of discrimination and having granted fictitious and fraudulent loans worth about R11m to a small group of franchisors. On 19th January 2023 the company said that its auditors had assessed that one of the loans represented a reportable irregularity. Spar normally issues loans to enable franchisors to acquire loans to buy stores. In its results for the 47 weeks to 25th August 2023 the company reported sales growth of 5,9% with wholesale grocery sales up 8,1% and Tops liquor sales down 0,6%. Price inflation was 10,1%. Build It turnover was down 3,6% and BWG combined turnover was up 8,5% in euros. The company said, "The impact of the SAP implementation at KZN amounted to an estimated loss of turnover to the Group of R1.4 billion for the period, being approximately R786 million for the six months ended 31 March 2023 as previously reported, and an additional R638 million for the five months to August 2023". In our view, the share is now under priced at current levels and represents something of a bargain.
JSE:SPP
by PDSnetSA
SPAR - Looking for a Breakout 🆙Price is flagging below the 20 day moving average and may breakout is possible with a successful break of R105. Another alternative is the pattern (symmetrical triangle) first breaks to the downside to create a bigger double bottom before finding enough buyers to go test R118-120 again. In trading, a symmetrical triangle is a chart pattern formed by connecting lower highs and higher lows with converging trendlines. It signifies a period of indecision and balance in the market. Traders wait for a confirmed breakout with increased volume to take action. The breakout can be bullish or bearish, and the measured move technique helps estimate potential price targets.
JSE:SPP
by Trader-Dan
1
I hope I'm wrong with Spar going to R52.78There is an Inv C&H that's formed on the monthly chart with Spar. It's been coming down since April 2016 where it just couldn't break above R225.00. Since then we've seen supply (selling) strong than buying. And now with the price breaking below the Inv C&H, shows downside to come. I hope I'm wrong with this one and they do something miraculous to pick up the price. 21>7 Price<200 Target R52.78 ABOUT THE COMPANY ~ The SPAR Group is a leading South African retail chain that operates in the grocery and convenience store sector. ~ SPAR Group South Africa is part of the international SPAR Group, which originated in the Netherlands in 1932 and has since grown into a global network of independent retailers. (There is even Spars in Greece - SPAR HEllas) In South Africa, SPAR operates under various store formats, including SPAR, SUPERSPAR, TOPS at SPAR, and SPAR Express. Each format caters to different customer needs and market segments. SPAR Group South Africa has a strong presence nationwide, with stores located in urban areas, townships, and rural regions. HOW IT GOT ITS NAME "SPAR" originated from the initials of the founding Dutch company's slogan, which was "Door Eendrachtig Samenwerken Profiteren Allen Regelmatig" (English translation: "Through united cooperation, everyone regularly benefits"). The first letters of each word spell out "SPAR."
JSE:SPPShort
by Timonrosso
UPDATE Spar hit the target price R103.61 after a 15% crash!Inverse Cup and Handle formed on Spar and price broke below the brim level. This sparked fear and lead to a ton of selling and supply. We had other indicators confirm for the downside to come. 200>21>7 RSI<30 And yesterday, the price went down 15% striking right through the target at R103.61. Smart Money Concepts Above the handle, formed a Buy Side Liquidity Order Block. This is where Smart Money came and swept buying orders and sold into them, which caused the crash. And it looks like Spar wants to drop even further! But I'll let you know.
JSE:SPPShort
by Timonrosso
1
Spar Group (SPP): At Decision PointSpar Group has carved a triangle from which price is trying to breakout, the point at which price is, has convergence of resistance (the 200DMA, declining resistance line, 30 week moving average), in contrast there are multiple supports (triangle ascending line, channel support). The share has a lot of indecision, whichever way it goes, there will be healthy momentum to chase price. Stop-loss: Price going below the point marked by the grey arrow means bears seize control & all bullish analysis will cease until price reaches a weekly cycle low.
JSE:SPP
by runyamhere
$JSESPP - Spar Group: 11298 Holds Firm, Will Bulls Re-emerge?The last coverage of Spar was on 2023.01.18 and the wave count was suggestive that the big bear had potentially ended at 11298, link below. The stock had a good, strong and impulsive looking rally from 11298 to 15432. The corrective move from 15432 to 11778 has thus far unfolded as a double zigzag (wxy). The stock bounced at 11778 to just above 12700 before pulling back towards 11778 but this level held and the stock has caught a bid again. This could be the beginning of a new bullish sequence above 11778. Long positions can be opened at current levels with 11778 as an aggressive stop-loss and 11298 as a more conservative stop-loss.
JSE:SPPLong
by Loyiso_BlaqueSoros_Mpeta
Spar just broke below and it's BAD! Target R103.61Inverse Cup and Handle has formed over the last month for the retail giant. The price yesterday broke below the Brim level. This makes it bearish for downside to come. 200>21>7 RSI<30 Target R103.61 SMC - Above the Handle of the Cup is a Buy Side Liquidity Order Block. This is where Long traders BOUGHT and Short Traders got stopped. Where the BUYING took place with retail traders is where Smart Money came swept the liquidity and sold into it causing strong selling. With the bad rand, the load shedding, the world markets in turmoil - we are seeing selling to come for JSE stocks as of late.
JSE:SPPShort
by Timonrosso
Spar setting up for the next upside to R171.37 -SMC explainedCup & Handle formed on the Daily chart. Price is only breaking above the brim level now. This is good news for the bulls. Other indicators showing upside. 7>21 >200 RSI>50 Target R171.37 SMC Sell Side Liquidity Order Block is clear where there is buying from Smart Money. ABOUT THE COMPANY The Spar Group was founded in the Netherlands in 1932 and has since grown to become one of the largest retail and wholesale businesses in the world. The company operates in four main regions: Africa, Europe, Asia-Pacific, and the Middle East. As of 2021, the Spar Group operates over 13,800 stores worldwide, employing over 400,000 people. There is even a Spar store in Greece in Athens... The company's stores range from small convenience stores to large hypermarkets, and they offer a variety of products, including groceries, fresh produce, baked goods, and household items.
JSE:SPPLong
by Timonrosso
Spar Group (SPP): Breaking OutSpar has been in a downtrend with price seeking a yearly low point. Now price has done the following: 1. Broken out of downtrend channel 2. Closed above the 30DMA & 200DMA 3. Price seeking to confirm a daily cycle low, favouring 28 February as the day 4. Price action exhibits some traits of stage analysis breakout, high volume to break the 30 week moving average albeit no big base for stage 1 Current price level is a good entry point, with a strict stop-loss at R141.50
JSE:SPPLong
by runyamhere