SPAR: 18,649 +215 (+1.17%)
S.Africa's SPAR Group eyes Sri Lanka expansion amid challenges at home
* SPAR plans two more stores in Sri Lanka
* Sales hit by weak S.Africa economy, listeria
* H1 headline earnings per share up 14 pct
(Recasts with Sri Lanka expansion, shares)
By Nqobile Dludla
JOHANNESBURG, May 30 (Reuters) - South African retailer and
wholesaler SPAR Group Ltd plans to open two more stores
in Sri Lanka, it said on Wednesday, after warning that fuel
price hikes and currency weakness could affect its home market.
In 2016, SPAR entered into a 50/50 joint venture (JV) with
Ceylon Biscuits Ltd in Sri Lanka to establish SPAR SL.
SPAR SL opened its first store in a suburb of the capital
Colombo in March and Chief Executive Graham O'Connor told
Reuters two more stores would be opened by year end.
"(There is) strong growth, very little opposition, very
fragmented market so very good opportunities," he said.
The two additional stores will be located in Colombo,
trading under the SPAR banner, group Financial Director Mark
Godfrey added in an emailed response to questions.
Sri Lanka's economy is expected to grow between 5 and 5.5
percent this year from an estimate of less than 4 percent in
2017, according to the country's central bank.
Back home, the group expects its core Southern Africa market
to be held back by fuel price increases and foreign currency
changes, meaning "consumers will remain under pressure, with a
constrained spending outlook."
SPAR, which also has operations in Switzerland and Ireland,
reported a 5.6 percent increase in first-half group sales to 50
billion rand ($4 billion), boosted by its European operations.
Overall sales slowed from the 12.6 percent growth the
company reported a year earlier.
Sales in Southern Africa were impacted by low consumer
spending due to weak economic growth and the world's largest
ever listeria outbreak, which forced retailers to remove cold
meat products from their shelves. At least 200 people have died
from listeria in South Africa since January 2017.
The company's headline earnings per share rose 14 percent to
541.2 cents. Headline earnings per share is the main profit
measure in South Africa and strips out certain one-off items.
SPAR shares, which had fallen by 2.4 percent over the past
year, were up 2.68 percent at 1004 GMT.
($1 = 12.6534 rand)
(Editing by James Macharia and Mark Potter)
First Published: 2018-05-30 07:47:21
Updated 2018-05-30 12:12:48
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