THE SPAR GROUP LIMITED - Unaudited interim results for the six months ended 31 March 2018

Release Date: 30/05/2018 07:05
Code(s): SPP
 
Wrap Text
Unaudited interim results for the six months ended 31 March 2018

THE SPAR GROUP LTD
REGISTRATION NUMBER: 1967/001572/06
ISIN: ZAE000058517
JSE SHARE CODE: SPP
THE SPAR GROUP LIMITED (SPAR or the company or the group)
www.spar.co.za

UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2018

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

                                                                                
                                                                                                                                                 Audited
                                                                                                                        Unaudited six months  year ended
Rmillion                                                                                            Change                    ended March      September
                                                                                                         %                  2018        2017        2017  
                  
Revenue                                                                                                5.3              50 940.9    48 381.4    97 174.2
Turnover                                                                                               5.6              50 026.6    47 353.4    95 461.1
Cost of sales                                                                                                          (45 058.4)  (42 815.2)  (85 830.2)
Gross profit                                                                                                             4 968.2     4 538.2     9 630.9
Other income                                                                                                               914.3     1 028.0     1 713.1
Net operating expenses                                                                                 4.7              (4 565.5)   (4 359.2)   (8 760.6)
Trading profit                                                                                                           1 317.0     1 207.0     2 583.4
BBBEE transactions                                                                                                          (0.8)       (0.2)       (0.9)
Operating profit                                                                                       9.1               1 316.2     1 206.8     2 582.5
Other non-operating items                                                                                                   (3.8)                  (54.6)
Interest income                                                                                                             43.4        59.0       123.2
Interest expense                                                                                                           (68.6)      (56.5)     (113.2)
Finance costs including foreign exchange gains and losses                                                                   63.4        23.3       (64.4)
Share of equity accounted associate losses                                                                                  (4.7)       (2.9)       (8.8)
Profit before taxation                                                                                 9.4               1 345.9     1 229.7     2 464.7
Income tax expense                                                                                                        (318.2)     (321.7)     (644.6)
Profit for the period attributable to ordinary shareholders                                           13.2               1 027.7       908.0     1 820.1
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss: 
 Actuarial gain on post-retirement medical aid                                                                                                      11.4
  Deferred tax relating to actuarial gain on post-retirement medical aid                                                                            (3.2)
 Actuarial gain on retirement funds                                                                                         93.5       232.7       432.1
  Deferred tax relating to actuarial gain on retirement funds                                                              (16.9)      (36.6)      (67.9)
Items that may be reclassified subsequently to profit or loss:
 Gain/(loss) on cash flow hedge                                                                                              0.2        (2.9)       (4.6)
  Tax relating to gain/(loss) on cash flow hedge                                                                                         0.4         0.6
 Exchange differences from translation of foreign operations                                                              (283.8)     (147.4)       42.0
Total comprehensive income                                                                           (14.0)                820.7       954.2     2 230.5

EARNINGS PER SHARE
Basic earnings per share                                                        (cents)               13.2                 533.7       471.6       945.2
Diluted earnings per share                                                      (cents)               13.5                 531.0       468.0       939.1

SALIENT STATISTICS
Headline earnings per share                                                     (cents)               13.8                 541.2       475.5       952.5
Diluted headline earnings per share                                             (cents)               14.1                 538.5       471.9       946.4
Normalised headline earnings per share                                          (cents)               14.4                 509.1       445.1       975.8
Dividend per share                                                              (cents)               12.5                 270.0       240.0       675.0
Net asset value per share                                                       (cents)               10.9               3 334.7     3 005.6     3 414.6
Operating profit margin                                                             (%)                                      2.6         2.5         2.7
Return on equity                                                                    (%)                                     15.8        15.9        29.8

HEADLINE EARNINGS RECONCILIATION
Profit for the period attributable to ordinary shareholders                                                              1 027.7       908.0     1 820.1
Adjusted for:
Loss on disposal of property, plant and equipment                                                                            7.7        13.3        13.9
- Gross                                                                                                                      9.7        13.6        15.7
- Tax effect                                                                                                                (2.0)       (0.3)       (1.8)
Impairment of goodwill                                                                                                       4.5         5.3         9.3
Loss/(profit) on disposal of business                                                                                        2.2        (3.8)       (2.8)
Profit on disposal of assets held for sale                                                                                              (7.3)       (7.5)
Fair value adjustment to assets held for sale                                                                                                        1.2
Headline earnings                                                                                     13.8               1 042.1       915.5     1 834.2

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                                                                                                                                 Audited
                                                                                                                        Unaudited six months  year ended
Rmillion                                                                                            Change                    ended March      September
                                                                                                         %                  2018        2017        2017 

ASSETS
Non-current assets                                                                                                      11 107.6    10 367.3    11 438.4
Property, plant and equipment                                                                                            6 335.1     6 015.9     6 553.9
Goodwill and intangible assets                                                                                           3 940.0     3 813.2     4 162.2
Investment in associates and joint ventures                                                                                128.6        81.9       117.3
Other investments                                                                                                           51.5        51.9        57.7
Operating lease receivables                                                                                                178.5        77.6       125.4
Loans                                                                                                                      453.3       295.9       406.2
Deferred taxation asset                                                                                                     20.6        30.9        15.7
Current assets                                                                                                          16 331.9    15 292.5    16 631.2
Inventories                                                                                                              3 950.6     3 803.9     3 816.4
Trade and other receivables                                                                                             10 978.9    10 090.3    10 814.3
Prepayments                                                                                                                107.5        99.2        78.1
Operating lease receivables                                                                                                 37.7        67.0        60.7
Loans                                                                                                                      102.5       225.7       116.9
Income tax recoverable                                                                                                      10.7                     4.1
Other current financial assets                                                                                                                       0.2
Cash and cash equivalents - SPAR                                                                                           949.1       803.5     1 565.6
Cash and cash equivalents - guilds and trusts                                                                              194.9       202.9       174.9
Assets held for sale                                                                                                       114.1       124.3       141.0
Total assets                                                                                                            27 553.6    25 784.1    28 210.6

EQUITY AND LIABILITIES
Capital and reserves                                                                                                     6 421.4     5 787.2     6 575.0
Stated capital                                                                                                           2 231.5     2 231.5     2 231.5
Treasury shares                                                                                                             (2.6)       (4.1)      (16.1)
Currency translation reserve                                                                                              (233.9)     (139.5)       49.9
Share-based payment reserve                                                                                                250.1       278.0       293.0
Equity reserve                                                                                                            (728.9)     (699.1)     (717.0)
Hedging reserve                                                                                                            (32.0)      (30.7)      (32.2)
Retained earnings                                                                                                        4 937.2     4 151.1     4 765.9
Non-current liabilities                                                                                                  6 537.8     6 987.8     7 350.1
Deferred taxation liability                                                                                                338.4       297.4       361.2
Post-employment benefit obligations                                                                                        762.8     1 081.5       940.2
Financial liabilities                                                                                                    1 627.8     1 482.8     1 700.1
Long-term borrowings                                                                                                     3 570.6     3 976.1     4 160.4
Operating lease payables                                                                                                   196.7        97.5       141.4
Other non-current financial liabilities                                                                                      4.3         2.9         4.9
Long-term provisions                                                                                                        37.2        49.6        41.9
Current liabilities                                                                                                     14 594.4    13 009.1    14 285.5
Trade and other payables                                                                                                12 113.8    11 254.6    13 452.7
Current portion of long-term borrowings                                                                                    313.8       389.9       364.4
Operating lease payables                                                                                                    38.7        68.5        62.8
Provisions                                                                                                                  40.0        34.1        45.3
Income tax liability                                                                                                        92.6       102.3        91.8
Other current financial liabilities                                                                                          0.7
Bank overdrafts - SPAR                                                                                                   1 994.8     1 159.7       268.5

Total equity and liabilities                                                                                            27 553.6    25 784.1    28 210.6


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                                                                                                 Share
                                                                                   Currency      based                                     Non-  Attributable
                                                              Stated   Treasury translation    payment  Retained   Equity  Hedging  controlling   to ordinary
Rmillion                                                     capital     shares     reserve    reserve  earnings  reserve  reserve     interest  shareholders

Audited capital and reserves at 30 September 2016            2 231.5     (18.7)         7.9      261.1   3 902.3   (713.0)   (28.2)           -       5 642.9
Profit for the period attributable to ordinary shareholders                                                908.0                                        908.0
Loss on cash flow hedge                                                                                                       (2.5)                      (2.5)
Actuarial loss on retirement funds                                                                         196.1                                        196.1
Recognition of share-based payments                                                               16.9                                                   16.9
Take-up of share options                                                 109.7                   (65.8)                                                  43.9
Transfer arising from take-up of share options                                                    65.8     (65.8)                                           -
Share repurchases                                                        (95.1)                                                                         (95.1)
Dividends paid                                                                                            (789.5)                                      (789.5)
Exchange rate translation                                                            (147.4)                         13.9                              (133.5)
Unaudited capital and reserves at 31 March 2017              2 231.5      (4.1)      (139.5)     278.0   4 151.1   (699.1)   (30.7)           -       5 787.2
Profit for the period attributable to ordinary shareholders                                                912.1                                        912.1
Loss on cash flow hedge                                                                                                       (1.5)                      (1.5)
Actuarial gain on post-retirement medical aid                                                              101.7                                        101.7
Actuarial gain on retirement funds                                                                          74.6                                         74.6
Recognition of share-based payments                                                               16.4                                                   16.4
Take-up of share options                                                  21.3                   (11.4)                                                   9.9
Transfer arising from take-up of share options                                                    11.4     (11.4)                                           -
Settlement of share-based payments                                         1.4                    (1.4)                                                     -
Share repurchases                                                        (34.7)                                                                         (34.7)
Dividends paid                                                                                            (462.2)                                      (462.2)
Exchange rate translation                                                             189.4                         (17.9)                              171.5
Audited capital and reserves at 30 September 2017            2 231.5     (16.1)        49.9      293.0   4 765.9   (717.0)   (32.2)           -       6 575.0
Profit for the period attributable to ordinary shareholders                                              1 027.7                                      1 027.7
Gain on cash flow hedge                                                                                                        0.2                        0.2
Actuarial gain on retirement funds                                                                          76.6                                         76.6
Recognition of share-based payments                                                               16.8                                                   16.8
Take-up of share options                                                 185.2                   (95.2)                                                  90.0
Transfer arising from take-up of share options                                                    95.2     (95.2)                                           -
Settlement of share-based payments                                        59.7                   (59.7)                                                     -
Share repurchases                                                       (231.4)                                                                        (231.4)
Dividends paid                                                                                            (837.8)                                      (837.8)
Non-controlling interest arising on business acquisition                                                                                   27.6          27.6
Purchase obligation of non-controlling interest                                                                     (26.8)                (27.6)        (54.4)
Exchange rate translation                                                            (283.8)                         14.9                              (268.9)
Unaudited capital and reserves at 31 March 2018              2 231.5      (2.6)      (233.9)     250.1   4 937.2   (728.9)   (32.0)           -       6 421.4


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

                                                                                                                                                 Audited
                                                                                                                        Unaudited six months  year ended
Rmillion                                                                                                                      ended March      September
                                                                                                                            2018        2017        2017 

CASH FLOWS FROM OPERATING ACTIVITIES                                                                                    (1 160.5)     (990.9)    1 411.2
Operating profit before:                                                                                                 1 316.2     1 206.8     2 582.5
Non-cash items                                                                                                             346.3       268.4       680.9
Net loss on disposal of property, plant and equipment                                                                        9.7        13.6        15.7
Net working capital changes                                                                                             (1 643.9)   (1 380.5)       13.0
- Increase in inventories                                                                                                 (250.9)     (139.7)      (23.7)
- (Increase)/decrease in trade and other receivables                                                                      (399.6)      252.0      (221.7)
- (Decrease)/increase in trade payables and provisions                                                                    (993.4)   (1 492.8)      258.4
Cash generated from operations                                                                                              28.3       108.3     3 292.1
Interest received                                                                                                           34.8        48.4       109.9
Interest paid                                                                                                              (65.0)      (57.0)     (112.5)
Taxation paid                                                                                                             (320.8)     (301.1)     (626.6)
Dividends paid                                                                                                            (837.8)     (789.5)   (1 251.7)

CASH FLOWS FROM INVESTING ACTIVITIES                                                                                      (730.5)     (887.0)   (1 496.0)
Investment to expand operations                                                                                           (221.5)     (299.9)     (842.1)
Investment to maintain operations                                                                                         (163.4)     (205.6)     (248.8)
- Replacement of property, plant and equipment                                                                            (185.1)     (208.9)     (330.0)
- Proceeds on disposal of property, plant and equipment                                                                     21.7         3.3        81.2
Acquisition of businesses/subsidiaries                                                                                    (313.9)     (111.1)     (142.7)
Proceeds from disposal of businesses                                                                                        15.1         8.0        48.0
Proceeds on disposal of assets held for sale                                                                                16.4        31.3        25.9
Net movement on loans and investments                                                                                      (63.2)     (309.7)     (336.3)

CASH FLOWS FROM FINANCING ACTIVITIES                                                                                      (358.2)      223.6         3.4
Proceeds from exercise of share options                                                                                     90.0        43.9        53.8
Share repurchases                                                                                                         (231.4)      (95.1)       79.4
Net movement in borrowings                                                                                                (216.8)      274.8      (129.8)

Net movement in cash and cash equivalents                                                                               (2 249.2)   (1 654.3)      (81.4)
Net cash balances at beginning of period                                                                                 1 472.0     1 532.9     1 532.9
Exchange rate translation                                                                                                  (73.6)      (31.9)       20.5
Net (overdrafts)/cash balances at end of period                                                                           (850.8)     (153.3)    1 472.0

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL RESULTS

1.  BASIS OF PRESENTATION AND COMPLIANCE WITH IFRS
    The condensed consolidated interim financial statements have been prepared in accordance with the SAICA Financial Reporting Guides as issued by the Accounting
    Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council and the information as required by IAS 34 Interim
    Financial Reporting, the JSE Ltd Listings Requirements and the requirements of the Companies Act of South Africa, 71 of 2008, as amended. The accounting policies are
    in terms of International Financial Reporting Standards and are consistent with those applied in the financial statements for the year ended 30 September 2017.

    The information contained in the interim report has neither been audited nor reviewed by the group's external auditors. The condensed consolidated financial
    statements have been prepared under the supervision of  Mr MW Godfrey CA(SA), Group Financial Director, on behalf of The SPAR Group Ltd.

2.  SEGMENTAL REPORTING
    Segment accounting policies are consistent with those adopted for the preparation of the condensed consolidated financial results.

    The principal segments of the group have been identified on a primary basis by geographical segment which is representative of the internal reporting used for
    management purposes as well as the source and nature of business risks and returns.

    The Chief Executive Officer (the Chief Operating Decision Maker) is of the opinion that the operations of the individual distribution centres within Southern Africa
    are substantially similar to one another and that the risks and returns of these distribution centres are likewise similar. The risks and returns of the Ireland and
    Switzerland operations are not considered to be similar to those within Southern Africa or each other.

    As a result, the geographical segments of the group have been identified as Southern Africa, Ireland and Switzerland. All segment revenue and expenses are directly
    attributable to the segments. Segment assets  and liabilities include all operating assets and liabilities used by a segment, with the exception of inter-segment
    assets and liabilities, and IFRS adjustments made by segments to their management report for the purposes of IFRS compliance. These assets and liabilities are all
    directly attributable to the segments.

    Analysis per reportable segment:                                                                                           Switzerland
                                                                                              Southern                              IAS 19  Consolidated
    Rmillion                                                                                    Africa   Ireland  Switzerland   adjustment         Total        
                              
    Unaudited six months ended March 2018
    Total revenue                                                                             35 024.5  10 683.0      5 233.4                   50 940.9
    Operating profit                                                                           1 044.7     225.3         38.5          7.7       1 316.2
    Profit before tax                                                                          1 095.7     202.5         40.0          7.7       1 345.9

    Other information
    Interest income                                                                               36.9       5.0          1.5                       43.4
    Interest expense                                                                              30.9      24.7         13.0                       68.6
    Depreciation                                                                                 104.9     113.0        117.8                      335.7

    Statement of financial position
    Total assets                                                                              14 797.2   8 484.5      4 271.9                   27 553.6
    Total liabilities                                                                         10 985.4   6 568.1      3 296.0        282.7      21 132.2

    Unaudited six months ended March 2017
    Total revenue                                                                             32 781.2   9 810.4      5 789.8                   48 381.4
    Operating profit                                                                           1 010.4     204.7          4.9        (13.2)      1 206.8
    Profit before tax                                                                          1 084.9     184.6        (26.6)       (13.2)      1 229.7

    Other information
    Interest income                                                                               52.8       5.5          0.7                       59.0
    Interest expense                                                                              16.2      25.6         14.7                       56.5
    Depreciation                                                                                  94.3      98.9        129.2                      322.4

    Statement of financial position
    Total assets                                                                              13 179.6   8 067.2      4 537.3                   25 784.1
    Total liabilities                                                                          9 287.1   6 655.7      3 581.2        472.9      19 996.9

    Audited year ended
    September 2017
    Total revenue                                                                             65 074.4  20 890.3     11 209.5                   97 174.2
    Operating profit                                                                           2 005.3     508.2         95.2        (26.2)      2 582.5
    Profit before tax                                                                          1 933.0     465.8         92.1        (26.2)      2 464.7

    Other information
    Interest income                                                                              109.7      11.1          2.4                      123.2
    Interest expense                                                                              33.8      50.5         28.9                      113.2
    Depreciation                                                                                 194.2     203.2        260.3                      657.7

    Statement of financial position
    Total assets                                                                              14 076.8   9 272.3      4 861.5                   28 210.6
    Total liabilities                                                                         10 070.8   7 364.7      3 791.7        408.4      21 635.6


3.  BUSINESS COMBINATIONS
3.1 Acquisition of S Buys pharmaceutical wholesaler
    The group purchased a 60% shareholding in Fifth Season Investments 126 (Pty) Ltd which trades as S Buys, a pharmaceutical wholesaler, effective 1 October 2017. The
    final consideration paid for these shares was R74.9 million. This purchase was made in order to grow the Pharmacy at SPAR business.

    The group will purchase the remaining 40% shareholding in S Buys between 30 September 2022 and 31 December 2022 for an amount based on a multiple of the profit after
    tax for the 2022 financial year. This obligation to purchase the remaining shareholding will be recognised as a financial liability at the present value of the
    obligation, discounted from the expected settlement date to the reporting date. At acquisition, the non-controlling interest was recognised at the proportionate share
    of the net assets of the business. The non-controlling interest's share of profits or losses will not be  recognised in equity, but as the movement in the fair value
    of the discounted financial liability to purchase the remaining shareholding.

    None of the goodwill recognised on acquisition is expected to be deductible for tax purposes.

    The initial accounting for the acquisition of S Buys is provisional for the value of intangible assets acquired as the valuation of these assets has not yet been
    completed. Once this valuation is finalised the values of the intangible assets acquired, deferred tax, and goodwill could change.

3.2 Purchase of commercial property
    The group purchased a commercial property for R165.0 million, which is a shopping centre in Pinetown, KwaZulu-Natal, adjacent to the SPAR head office. This shopping
    centre houses a range of tenants, including certain group functions, from which the company derives rental income.

    The property was purchased by a wholly owned subsidiary of The SPAR Group Ltd, Knowles Shopping Centre Investments (Pty) Ltd. This acquisition was funded from
    available cash resources.

    The initial accounting for the acquisition of the commerical property is provisional for the value of deferred tax. Once this is finalised the values of the deferred
    tax and goodwill could change. 

3.3 Retail stores acquired
    During the course of the financial period the group acquired the assets of five (2017: six) retail stores in South Africa and GCL 2016 Ltd (Gilletts), a subsidiary of
    The BWG Group, acquired the assets of two (2017: nil) retail stores in the United Kingdom (UK). The principal activity of these acquisitions is that of retail trade
    and all its aspects. These stores were purchased in order to protect strategic sites, and the goodwill arising on the business combinations is an indication of future
    turnover expected to be made by the group as a result of these acquisitions. These acquisitions were funded from available cash resources.

3.4 Assets acquired and liabilities assumed at date of acquisition
                                                                                                                     Unaudited six months
                                                                                                                      ended March 2018 
            
                                                                                                       Fifth      Knowles        
                                                                                                      Season     Shopping     
                                                                                                 Investments       Centre
                                                                                                         126  Investments  SA Retail  UK Retail
    Rmillion                                                                                       (Pty) Ltd    (Pty) Ltd     stores     stores    Total

    Assets                                                                                             196.8        165.0       27.2        2.7    391.7
    Liabilities                                                                                       (127.8)                                     (127.8)
    Total identifiable net assets at fair value                                                         69.0        165.0       27.2        2.7    263.9
    Non-controlling interest                                                                           (27.6)                                      (27.6)
    Goodwill arising from acquisition                                                                   33.5                    33.8        6.9     74.3
    Purchase consideration transferred                                                                  74.9        165.0       61.0        9.6    310.6
    Cash and cash equivalents acquired                                                                  (0.5)                                       (0.5)
    Business acquisition costs                                                                                        0.7                   3.1      3.8
    Net cash outflow on acquisition                                                                     74.4        165.7       61.0       12.7    313.9


                                                                                                                                     
                                                                                                    Unaudited six months               Audited year 
                                                                                                        ended March                  ended September
                                                                                                             2017                          2017
    Rmillion                                                                                       SA Retail                   SA Retail  UK Retail  
                                                                                                      stores        Total         stores     stores    Total

    Assets                                                                                              12.0         12.0           15.1        2.1     17.2
    Liabilities                                                                                                         -                                  -
    Total identifiable net assets at fair value                                                         12.0         12.0           15.1        2.1     17.2
    Non-controlling interest                                                                                            -                                  -
    Goodwill arising from acquisition                                                                   99.1         99.1          107.3       15.2    122.5
    Purchase consideration transferred                                                                 111.1        111.1          122.4       17.3    139.7
    Cash and cash equivalents acquired                                                                                  -                                  -
    Business acquisition costs                                                                                          -                       3.0      3.0
    Net cash outflow on acquisition                                                                    111.1        111.1          122.4       20.3    142.7


3.5 Assets and liabilities at date of disposal
    The assets and liabilities disposed of relate to two SA retail stores (March 2017: one).

                                                                                                                                Unaudited          Audited
                                                                                                                            six months ended    year ended
                                                                                                                                  March          September
    Rmillion                                                                                                                2018        2017          2017

    Non-current assets                                                                                                      17.3         4.2          45.2
    Property, plant and equipment                                                                                            5.1         2.6           6.4
    Goodwill                                                                                                                12.2         1.6          38.8
   (Loss)/profit on disposal of business                                                                                    (2.2)        3.8           2.8
    Proceeds                                                                                                                15.1         8.0          48.0


4.  FINANCIAL RISK MANAGEMENT

                                                                                                                                Unaudited          Audited
                                                                                                                            six months ended    year ended
                                                                                                                                  March          September
    Rmillion                                                                                                                2018        2017          2017

    Financial instruments classification
    Net bank (overdrafts)/cash balances                                                                                   (850.8)     (153.3)      1 472.0
    Loans*                                                                                                                 555.8       521.6         523.1
    Other equity investments***                                                                                             51.5        51.9          57.7
    Trade and other receivables*                                                                                        10 978.9    10 090.3      10 814.3
    Trade and other payables**                                                                                         (12 113.8)  (11 254.6)    (13 452.7)
    FEC (liability)/asset***                                                                                                (0.7)                      0.2
    FEC liability****                                                                                                       (4.3)       (2.9)         (4.9)
    Borrowings**                                                                                                        (3 884.4)   (4 366.0)     (4 524.8)
    Financial liabilities***                                                                                            (1 627.8)   (1 482.8)     (1 700.1)

    *    Classified under IAS 39 as loans and receivables.
    **   Classified under IAS 39 as financial liabilities measured at amortised cost.
    ***  Classified under IAS 39 as financial assets and liabilities at fair value through profit or loss.
    **** Designated as a hedging instrument.

    Fair value hierarchy
    The group's financial instruments carried at fair value are classified into three categories defined as follows:

    Level 1 financial instruments are those that are valued using unadjusted quoted prices in active markets for identical financial instruments. These instruments
    consist of the forward exchange contracts.

    Level 2 financial instruments are those valued using techniques based primarily on observable market data. Instruments in this category are valued using quoted prices
    for similar instruments or identical instruments in markets which are not considered to be active; or valuation techniques where all the inputs that have a significant
    effect on the valuation are directly or indirectly based on observable market data. Financial instruments classified as level 2 are mainly comprised of other equity
    investments.

    Level 3 financial instruments are those valued using techniques that incorporate information other than observable market data. Instruments in this category have been
    valued using a valuation technique where at least one input, which could have a significant effect on the instrument's valuation, is not based on observable market
    data.

    The following financial instruments on the statement of financial position are carried at fair value and are further categorised into the appropriate fair value
    hierarchy:

    Financial instruments
                                                                                                                                 Fair value
                                                                                                               Carrying          
    Rmillion                                                                                                      value     Level 1     Level 2    Level 3  
    Unaudited six months ended March 2018
    Other equity investments                                                                                       51.5        51.5
    FEC liability designated as a hedging instrument                                                               (4.3)       (4.3)
    FEC liability at fair value through profit and loss                                                            (0.7)       (0.7)
    Financial liabilities                                                                                      (1 627.8)                          (1 627.8)
    Total                                                                                                      (1 581.3)       (5.0)       51.5   (1 627.8)

    Unaudited six months ended March 2017
    Other equity investments                                                                                       51.9                    51.9
    FEC liability at fair value through profit and loss                                                            (2.9)       (2.9)
    Financial liabilities                                                                                      (1 482.8)                          (1 482.8)
    Total                                                                                                      (1 433.8)       (2.9)       51.9   (1 482.8)

    Audited year ended
    September 2017
    Other equity investments                                                                                       55.3                    55.3
    FEC liability designated as a hedging instrument                                                               (4.9)       (4.9)
    FEC asset at fair value through profit and loss                                                                 0.2         0.2
    Financial liabilities                                                                                      (1 700.1)                          (1 700.1)
    Total                                                                                                      (1 649.5)       (4.7)       55.3   (1 700.1)

    Level 3 sensitivity information
    The fair value of the level 3 financial liabilities of R1 627.8 million (March 2017: R1 482.8 million) was estimated by applying an income approach valuation method
    including a present value discount technique. The fair value measurement is based on significant inputs that are not observable in the market. Key inputs used in the
    valuation include the assumed future profit targets and the discount rates applied. The assumed profitability was based on historical performances but adjusted for
    expected growth.

    The following factors were applied in calculating the financial liabilities at 31 March 2018:

    TIL JV Ltd
    - Discount rate of 7.2% (2017: 7.2%).
    - Closing rand/euro exchange rate of 14.57 (2017: 14.29).

    SPAR Holding AG
    - Discount rate of 2.0% (2017: 2.0%).
    - Closing rand/Swiss franc exchange rate of 12.38 (2017: 13.38).

    Fifth Season Investments 126 (Pty) Ltd
    - Discount rate of 12.5%.

    The following tables show how the fair value of the level 3 financial liabilities would change in relation to the interest rate if the interest rate increased or
    decreased by 0.5%.

    TIL JV Ltd
                                                                                                                   Discount rate  Sensitivity  Liability
                                                                                                                               %            %   Rmillion
    Unaudited six months ended March 2018
    Financial liability                                                                                                      7.2          0.5       (3.0)
    Financial liability                                                                                                      7.2         (0.5)       3.0

    Unaudited six months ended March 2017
    Financial liability                                                                                                      7.2          0.5      (13.5)
    Financial liability                                                                                                      7.2         (0.5)      13.1

    Audited year ended September 2017
    Financial liability                                                                                                      7.2          0.5      (14.0)
    Financial liability                                                                                                      7.2         (0.5)      14.3

    SPAR Holding AG

    Unaudited six months ended March 2018
    Financial liability                                                                                                      2.0          0.5      (10.6)
    Financial liability                                                                                                      2.0         (0.5)      10.7

    Unaudited six months ended March 2017
    Financial liability                                                                                                      2.0          0.5      (13.3)
    Financial liability                                                                                                      2.0         (0.5)      12.9

    Audited year ended September 2017
    Financial liability                                                                                                      2.0          0.5      (11.9)
    Financial liability                                                                                                      2.0         (0.5)      12.1
 
    Fifth Season Investments 126 (Pty) Ltd

    Unaudited six months ended March 2018
    Financial liability                                                                                                     12.5          0.5       (1.3)
    Financial liability                                                                                                     12.5         (0.5)       1.3

    Movements in level 3 financial instruments carried at fair value
    The following tables show a reconciliation of the opening and closing balances of level 3 financial instruments carried at fair value:

    TIL JV Ltd
                                                                                                                                Unaudited          Audited
                                                                                                                            six months ended    year ended
                                                                                                                                  March          September
    Rmillion                                                                                                                2018        2017          2017

    Balance at the beginning of the year                                                                                   963.8       824.4         824.4
    Finance costs recognised in profit or loss                                                                              34.0        28.1          60.1
    Net exchange differences arising during the period                                                                     (85.6)      (68.9)         27.7
    Fair value adjustment                                                                                                                             51.6
    Balance at end of period                                                                                               912.2       783.6         963.8
    Undiscounted value of financial liability                                                                            1 090.2     1 003.4       1 094.2

    SPAR Holding AG
                                                                                                                                Unaudited          Audited
                                                                                                                            six months ended    year ended
                                                                                                                                  March          September
    Rmillion                                                                                                                2018        2017          2017

    Balance at the beginning of the year                                                                                   736.3       743.6         743.6
    Finance costs recognised in profit or loss                                                                               7.0         7.0          14.2
    Net exchange differences arising during the period                                                                      20.1        10.5         (37.6)
    Foreign exchange translation                                                                                          (103.5)      (61.9)         16.1
    Balance at end of period                                                                                               659.9       699.2         736.3
    Undiscounted value of financial liability                                                                              751.4       736.9         803.6

    Fifth Season Investments 126 (Pty) Ltd
                                                                                                                                Unaudited          Audited
                                                                                                                            six months ended    year ended
                                                                                                                                  March          September
    Rmillion                                                                                                                2018        2017          2017

    Balance at the beginning of the year                                                                                       -           -             -
    Initial recognition                                                                                                     54.4           -             -
      Initial recognition reducing non-controlling interest balance                                                         27.6
      Initial recognition in equity reserve                                                                                 26.8
    Finance costs recognised in profit or loss                                                                               1.3
    Balance at end of period                                                                                                55.7           -             -
    Undiscounted value of financial liability                                                                              100.5           -             -

    Total present value of financial liabilities                                                                         1 627.8     1 482.8       1 700.1
    Total undiscounted value of financial liabilities                                                                    1 942.1     1 740.3       1 897.8

    Movements in level 3 financial instruments carried at fair value 
    The TIL JV Ltd financial liability is calculated as the present value of the non-controlling interests share  of the expected redemption value and discounted from the
    expected exercise dates to the reporting date.  As at 31 March 2018, the financial liability was valued at R912.2 million based on management's expectation of future
    profit performance. Repayments will commence in December 2019 and continue in 2020 and 2022.

    The total obligation of the SPAR Holding AG financial liability of CHF56.3 million is calculated at the present value of the obligation, discounted from the expected
    settlement date to the reporting date. This financial liability will be repaid between December 2020 and February 2021.

    The Fifth Season Investments 126 (Pty) Ltd is calculated at the present value of the obligation, discounted from the expected settlement date to the reporting date,
    based on management's expectation of future profit performance. This financial liability will be repaid between 30 September 2022 and 31 December 2022.

    Interest is recorded in respect of these liabilities within finance costs using the effective interest rate method. Net exchange differences on these financial
    liabilities have also been presented in finance costs.

    Capital risk management
    The group manages its capital to ensure that it will be able to continue as a going concern while maximising the return to stakeholders.

    The group's overall capital management strategy remained unchanged for the period ended 31 March 2018. The strategy entails a philosophy of tight risk management and
    minimum use of derivative instruments.

    The capital structure of the group consists of equity attributable to shareholders comprising issued capital, reserves and retained earnings and borrowings.

    Treasury shares are held from time to time for the purpose of settling option holder obligations and these are only acquired on approval from shareholders and where
    the market presents value in their acquisition.

    The strong cash inflow generated by group operations is utilised to fund distribution centre expansions and other capital expenditure, and to settle dividends
    declared, taxation and trade payable obligations.

5.  CONTINGENT LIABILITIES
                                                                                                                                Unaudited          Audited
                                                                                                                            six months ended    year ended
                                                                                                                                  March          September
    Rmillion                                                                                                                2018        2017          2017

    Guarantees issued in respect of the finance obligations                                                              1 095.0     1 039.8       1 089.1
    - Loan guarantees                                                                                                      779.5       722.0         760.5
    - Rental guarantees                                                                                                      1.2         3.2           4.2
    - Customs and excise guarantees                                                                                        142.4       150.4         155.9
    - IT retail computer equipment lease scheme                                                                            171.9       164.2         168.5

    The board has limited guarantee facilities to R1 090.0 million (March 2017: R990.0 million) relating to Southern Africa. The company has also provided a financial
    guarantee on the TIL JV Ltd bank facilities to the value of EUR189.3 million (March 2017: EUR238.0 million), and the SPAR Holding AG borrowing facilities to the value of
    CHF30.0 million (March 2017: CHF40.0 million).

    The company has guaranteed the finance obligations of SPAR Retail Stores (Pty) Ltd, Kaplian Trading (Pty) Ltd, TIL JV Ltd, Annison 45 (Pty) Ltd and Sun Village
    Supermarket (Pty) Ltd to its bankers.

    These guarantees commenced 15 April 2011, 25 July 2011, 24 June 2015, 29 September 2015 and 13 December 2016 respectively and are for an indefinite period.

6.  COMMITMENTS

6.1 Operating lease commitments
    Future minimum lease payments due under non-cancellable operating leases:

                                                                                                                                     Land and   
    Rmillion                                                                                                                        buildings      Other

    Unaudited six months ended March 2018
    Payable within one year                                                                                                          1 835.8        68.1
    Payable later than one year but not later than five years                                                                        5 424.2       120.9
    Payable later than five years                                                                                                    3 992.5        10.2
    Total                                                                                                                           11 252.5       199.2

    Unaudited six months ended March 2017
    Payable within one year                                                                                                          1 648.0        65.3
    Payable later than one year but not later than five years                                                                        5 176.8       156.2
    Payable later than five years                                                                                                    4 127.5        20.2
    Total                                                                                                                           10 952.3       241.7

    Audited year ended September 2017
    Payable within one year                                                                                                          1 804.0        69.9
    Payable later than one year but not later than five years                                                                        5 495.4       144.0
    Payable later than five years                                                                                                    4 357.3        16.0
    Total                                                                                                                           11 656.7       229.9

6.2 Operating lease receivables
    Future minimum sub-lease receivables due under non-cancellable property leases:

                                                                                                                                Unaudited          Audited
                                                                                                                            six months ended    year ended
                                                                                                                                  March          September
    Rmillion                                                                                                                2018        2017          2017

    Receivable within one year                                                                                           1 210.3       994.6       1 124.7
    Receivable later than one year but not later than five years                                                         3 268.7     2 929.3       3 185.9
    Receivable later than five years                                                                                     1 997.2     1 753.3       2 093.9
    Total operating lease receivables                                                                                    6 476.2     5 677.2       6 404.5

6.3 Capital commitments
    Contracted                                                                                                            230.8        403.5         549.8
    Approved but not contracted                                                                                           110.8         56.7          94.8
    Total capital commitments                                                                                             341.6        460.2         644.6

    Capital commitments will be financed from group resources.

7.  EVENTS AFTER THE REPORTING DATE
    BWG Group debt refinancing
    On 5 April 2018 the BWG Group entered a new syndicated bank facility which included the introduction of a fourth lender. The facility amount has been increased to
    fund approved acquisitions and extends the maturity of the facilities by 6 months to 31 December 2020.

    Acquisition of 4 Aces Wholesale Limited (4 Aces)
    The BWG Group acquired the entire issued share capital of 4 Aces Wholesale Limited for EUR14.0 million. Formal approval and clearance was received from the regulating
    authority in early May, and the acquisition completed on 11 May 2018. 4 Aces is a leading independent wholesaler supplying the grocery retail, licensed and
    foodservice trades in Ireland.

COMMENTARY

HIGHLIGHTS
- Turnover up 5.6%  
- Headline earnings per share up 13.8%
- Net asset value per share up 10.9% 
- Interim dividend per share of 270 cents 

SALIENT FEATURES
                                                                
                                            Unaudited   Unaudited
                                           six months  six months
                                                ended       ended
                                                March       March   Change
Rmillion                                         2018        2017        %

Turnover                                     50 026.6    47 353.4      5.6
Operating profit                              1 316.2     1 206.8      9.1
Profit before taxation                        1 345.9     1 229.7      9.4
Earnings per share (cents)                      533.7       471.6     13.2
Headline earnings per share (cents)             541.2       475.5     13.8
Dividend per share (cents)                      270.0       240.0     12.5
Net asset value per share (cents)             3 334.7     3 005.6     10.9

OVERVIEW OF TRADING RESULTS
The SPAR Group reported a strong performance for the six months to 31 March 2018, boosted by satisfying contributions from the European operations. Total 
turnover grew 5.6% from R47.4 billion to R50.0 billion against the backdrop of tough trading markets.

- SPAR Southern Africa contributed a growth in wholesale turnover of 6.8%. The sales result was positively influenced by the earlier timing of the Easter 
  holidays; however, this was muted by substantially lower internally measured food inflation and the general impact of the listeriosis outbreak. Sales in 
  the chilled processed meat category were significantly affected, without a clear trend in substitute product sales becoming evident. The TOPS liquor brand
  continued to deliver impressive results with a wholesale sales growth of 12.6%. Despite a generally weak sector, the building materials business grew sales
  by 8.6% through increased retailer loyalty and strong marketing. The SPAR Southern Africa store network increased to 2 184 stores, with new stores opened 
  across all brands. The group completed 131 store upgrades across all brands, compared to 89 upgrades in the previous period.

- The BWG Group (SPAR Ireland) has once again delivered solid euro-denominated results, with all retail brands reporting positive growth. The BWG Wines &
  Spirits and BWG Foodservice businesses reported impressive double-digit turnover growths, while the Gilletts corporate stores continued to make a strong
  contribution to the overall Irish performance. SPAR Ireland's store network remained constant at 1 330 stores.

- Despite the challenging sales environment, SPAR Switzerland has made significant progress in addressing the business performance. While the reported
  turnover growth remained negative, this was partly due to the strategic closure, or sale, of five unprofitable corporate retail stores in this period. This
  has had a marked impact on the profitability of the overall business. The core wholesale and cash-and-carry businesses continued to record profitability
  improvements. SPAR Switzerland's total store network declined to 289 stores.

GROUP FINANCIAL REVIEW

                             Southern                          The SPAR
Rmillion                       Africa   Ireland  Switzerland  Group Ltd

Income statement
Turnover                     34 706.8  10 487.9      4 831.9   50 026.6
Gross profit                  2 846.9   1 266.7        854.6    4 968.2
Operating profit              1 044.7     225.3         46.2    1 316.2
Profit before taxation        1 095.7     202.5         47.7    1 345.9
Financial position
Total assets                 14 797.2   8 484.5      4 271.9   27 553.6
Total liabilities            10 985.4   6 568.1      3 578.7   21 132.2

The turnover of The SPAR Group grew by 5.6% to R50.0 billion (2017: R47.4 billion), with 30.6% of total turnover generated in foreign currency. The
comparable Southern African business, with reported turnover growth of 5.4%, continued to be impacted by tough trading conditions despite early signs of
improving consumer confidence. The turnover of the BWG Group increased by 2.8% in euro-currency terms. The depreciation of the rand against the euro over
this period resulted in an 8.8% increase in reported turnover to R10.5 billion (2017: R9.6 billion). SPAR Switzerland contributed turnover of R4.8 billion
(2017: R5.2 billion) with sales continuing to decline in an extremely difficult market. All regions benefited from the earlier timing of Easter in the
current period compared to the prior year.

The group's gross margin increased to 9.9% (2017: 9.6%). Despite the competitive market, SPAR Southern Africa increased its gross margin slightly to 8.2%,
as it continued to drive the fresh and perishable contribution through its facilities. The BWG Group and SPAR Switzerland, which both operate in the higher
margin convenience sector, reported gross margins of 12.1% (2017: 12.2%) and 17.7% (2017: 13.9%) respectively.

Group operating expenses increased by 4.7%, or 3.8% if the newly acquired pharmaceutical business is excluded. Expenses were significantly impacted by the
7.3% reduction in costs in the Swiss business. In Southern Africa, comparable operating expenses were up 8.9%. This was attributable to strong increases in 
marketing and promotional expenditures which contributed 4.6%, higher transport and distribution costs and continued investment in IT infrastructure. A further 
1.9% of the increase is due to additional costs associated with the corporate stores. The BWG Group's expenses grew by a well-controlled 2.1% in euro terms and 
were impacted by increased depreciation charges and higher staff costs.

Profit before tax was up 9.4% to R1.3 billion (2017: R1.2 billion), but was impacted by a net interest expense of R25.2 million, compared to net interest
income of R2.5 million a year ago. The negative interest effect was countered by an increase in the foreign exchange gain recognised on the translation of
the South African financial liability to purchase the Irish minority interests.

Profit after tax improved 13.2% to R1 027.7 million (2017: R908.0 million), due to lower effective tax rates in South Africa and Ireland.

Headline earnings per share increased by 13.8% to 541.2 cents (2017: 475.5). The board approved an interim dividend of 270 cents per share.

Cash generated from operations totalled R28.3 million (2017: R108.3 million) and decreased against the comparative period due to increased working capital
levels. This was largely attributed to the earlier timing of the Easter holiday. The SPAR Group's cash flow from investing activities showed an outflow of
R730.5 million, including total net capital expenditure of R384.9 million (2017: R505.5 million). During this period the group also concluded two major
acquisitions in South Africa, namely a controlling interest in the S Buys pharmaceutical wholesaler for R74.9 million and the Knowles Shopping Centre for
R165 million. Taking into account the impact of a net R216.8 million outflow to reduce borrowings, the group had a net overdraft position of R850.8 million
(2017: overdraft of R153.3 million) at the reporting date.

The group's capital expenditure during the period included operational investments of R124.5 million in Southern Africa. These comprised primarily transport
and logistics requirements and also include further investment in IT infrastructure upgrades and software development. The BWG Group's capital expenditure
amounted to R179.7 million, the majority of which was warehouse equipment, but also included additional investments in retail property. Capital expenditure
in the Swiss operations of R102.4 million was incurred, including further store refurbishments and ongoing technology upgrades to enhance the retail
offering. The group made further investments of R70.6 million to acquire seven corporate stores, defending strategically located retail locations in South
Africa and the United Kingdom.

The capital expenditure budget in Southern Africa for the next six months is expected to reduce to normal operating levels, as no further property
acquisitions are planned and construction plans for the previously announced distribution facilities will not commence before 2019.

GEOGRAPHICAL REVIEW
SPAR Southern Africa
The turnover of SPAR Southern Africa increased 6.8% to R34.7 billion (2017: R32.5 billion), but was positively influenced by the inclusion of the S Buys
pharmaceutical business acquired on 1 October 2017. Excluding this new turnover, the comparable business grew by 5.4% (2017: 4.9%), reflecting the continued
tough retail market, which remains underpinned by weak consumer spend. This result was positively boosted by extremely strong liquor turnover growth of
12.6% and a very pleasing increase in the building materials business of 8.6%. The latter was contrary to a weak sector performance and reflected increased
retailer loyalty and strong marketing investments. Combined food and liquor wholesale turnover growth was recorded at 5.1% and has to be viewed against
internally calculated food inflation of 1.9%. This inflation measure has fallen 6.3% from that reported in the 2017 results.

Case volumes handled through the seven distribution centres continued to reflect the constrained market and increased 2.6% to 115.4 million cases 
(2017: 112.5 million cases). This positive growth reversed the decline in cases delivered experienced in the comparative period.

The retail turnover of SPAR stores increased 4.9% to R40.4 billion (2017: R38.5 billion) and recorded like-for-like growth of 2.9%. The combined food and
liquor retail sales, which allow for a better industry comparison, increased by 5.7% and should be viewed against the significant decrease in food price
inflation over the year. Wholesale turnover grew 4.2% to R27.2 billion, continuing to reflect the independent retailers' support of the group's voluntary
trading model. The SPAR-branded private-label products continued to offer real consumer value and quality and remain a shopping differentiator for SPAR
retailers. The substantial deflation recorded in certain commodity categories impacted the private-label turnover which increased by a muted 2.9% to 
R5.3 billion. Wholesale perishable sales growth continued to outstrip the ambient categories in line with the group's strategic focus on Fresh and was
underpinned by strong performances in the butchery, bakery and frozen product categories.

The group maintained a strong organic growth focus to support the profitability of existing retailers. Total retail space recorded an impressive growth of
2.7% (2017: 0.6%) and was boosted by several large new stores. In addition, 80 SPAR stores were refurbished during the period to ensure they continued to
provide retail offerings to exceed consumer demands. A net 18 stores were opened, bringing the total SPAR store numbers to 921 by 31 March 2018.

The retail turnover of TOPS at SPAR increased 12.8% to R5.8 billion (2017: R5.2 billion), as strong marketing initiatives and continued brand growth
attracted consumer spend. Same store growth amounted to 8.6% for the period. Wholesale turnover closely tracked the retail performance and grew by 12.6% to
R3.4 billion (2017: R3.0 billion). During the period, the TOPS at SPAR store network increased by 21 stores on a net basis to 754 stores, while 29 stores
were revamped.

Build it's retail turnover growth increased to 10.4% for the period, significantly higher than building sector calculated inflation of 3.4%, and against the
backdrop of a challenging trading environment. This performance was underpinned by further innovative marketing and a focus on retail execution to
differentiate the brand. The group's buying teams drove increased retailer loyalty through improved product pricing. The influence of cement, which is a
significant component of Build it's overall sales, has largely stabilised and the industry has seen slight inflation in this commodity over the period.
Retail activity in the neighbouring countries reported strong growth increases in Mozambique, while Namibia reported improved performance, despite ongoing
country challenges. At a wholesale level, turnover increased 8.6% to R3.7 billion (2017: R3.4 billion) reflecting further opportunities to increase retailer
loyalty. Build it's house brand imports showed solid growth of 10.7% for the period. As at 31 March 2018, Build it's store network totalled 371 stores,
having opened a net three stores in the period.

The S Buys pharmaceutical wholesale business was acquired with effect from 1 October 2017 with revenue and profit recognised for the first time in this
period. This strategic investment will support the Pharmacy at SPAR brand and management are actively working to convert purchases to the wholesaler.
At the end of the period there were 94 Pharmacy at SPAR stores. The S Buys Group reported turnover of R438.4 million for the period, which amounted to an
impressive growth of 11.3%, driven by increases of 14.9% in the Scriptwise business catering for high-value speciality scripts and 9.7% in wholesale sales.
The profitability of the business was, however, impacted by a lower than expected government regulated price increase.

SPAR Ireland
The BWG Group again delivered strong results for the six months and reported euro-denominated growth of 2.9%. Recent deflation trends have slowed and
reversed in certain retail categories. Latest measures indicate that food and non-alcoholic drinks declined 0.2%, while alcohol and tobacco increased by
0.1%. An increase in consumer spending in the grocery retail sector remains elusive. The business recorded significant turnover growths in the month of
March, not only impacted by the earlier Easter, but also driven by the major storm weather that closed down large portions of Ireland and the United Kingdom
as consumers bought in large quantities of food and beverages.

The hospitality sector remained strong and again boosted the sales of the BWG Wines & Spirits and BWG Foodservice divisions which reported turnover growths
of 11.8% and 18.6% respectively. In comparison with last year, all retail brands recorded positive growth, with the XL brand increasing by 6.3% and Londis
reporting turnover up by 6.2%. The BWG Group suffered from the loss of a small retail group but still managed to close the period with an unchanged number
of total stores.

The group's distribution volumes continued to show good increases and record case movements were handled in the Kilcarbery distribution centre. Recent
recognition through several prestigious logistics and transport awards, including the Irish Logistics Company of the Year award, was a real highlight for
this business.

In South West England, the Gilletts corporate stores grew by 7.4% and further contributed to the increased group turnover. Appleby Westward, BWG Group's
wholesale operations, showed a decline following the loss of two independent retailer groups in the previous year. The combined business reported a decline
in turnover of 0.2% in sterling terms. The further weakening of the sterling increased the loss in reported euro terms to 2.5%. This business represents
approximately 11.7% of the consolidated BWG Group.

The total number of stores across BWG Group's store formats as at 31 March 2018 remained unchanged at 1 330, with 26 new stores opened.

The group's management continued to apply strict cost management measures which underpinned the double-digit growth in profit.

Subsequent to the reporting period, the BWG Group announced the completion of the acquisition of 4 Aces Wholesale, a leading independent wholesaler
supplying the grocery retail, licensed and foodservice trades in Ireland. The acquisition of the wholesaler provides the group with new trading
relationships with the Gala convenience stores that are currently serviced by 4 Aces, in addition to over 1 500 independent retail and trade customers.

SPAR Switzerland
Sales of SPAR Switzerland continued to be negatively impacted by low economic growth in the market. While slight inflationary trends have been noted - with
prices of food and non-alcoholic beverages increasing by 0.9% and alcoholic beverages 0.4% higher, and a slight devaluation of the Swiss franc against the
euro - these have been insufficient to slow the attraction of cross-border shopping. Largely as a result of this impact, SPAR Switzerland reported a
decline in local currency measured turnover of 5.3%. However, this result was partly influenced by the strategic decision to exit from five unprofitable
corporate retail stores. Six new stores were opened and at the end of the period there were 289 SPAR and SPAR Express stores serviced.

The cash-and-carry business, trading as TopCC, reported a modest recovery in turnover which was attributed to the various marketing programmes. The sector
continues to be adversely impacted by the declining Swiss restaurant and hospitality sectors. The group is investigating upgrade opportunities in these
stores with an increased emphasis on liquor, butchery and fresh produce offerings.

Warehouse turnover improved as SPAR retail activity was positively influenced by several innovative marketing campaigns and programmes, including the launch
of a consumer loyalty card. The decline in warehouse volumes has largely been halted and turnover reported for this period was flat when measured against
the comparative period.

Despite the decline in overall turnover, the business succeeded in improving margins and reducing costs. The latter saving was assisted by the corporate
store closures and substantially contributed to the overall result. The region reported turnover of R4.8 billion for the six months (2017: R5.2 billion).
Profit before tax increased to R47.7 million from a previous year loss of R39.8 million.

PROSPECTS
Despite the early indications of improving consumer and business confidence in Southern Africa, the trading environment is expected to remain largely
unchanged in the medium term. While food price inflation has recently dropped to low levels, there is a real risk that this cycle will start to turn.
Recent movements in fuel prices and foreign currency also suggest that consumers will remain under pressure, with a constrained spending outlook. In
response, SPAR's extensive distribution capability and market-leading brands are well positioned to deliver exceptional value to consumers and thereby
ensure that its independent retailers remain suitably positioned to meet these challenges.

The BWG Group's growth outlook, still underpinned by Brexit uncertainties, remains positively cautious in both territories where they operate.
Management's proactive response to market changes should ensure that SPAR Ireland will deliver a result in line with expectation. The acquisition of the 
4 Aces wholesale business, subsequent to the reporting date, will further strengthen the Irish group's growth objectives.

The Swiss business will maintain its focus on driving the identified strategic initiatives to improve the performance. These plans will take time to 
realise but early signs point to positive change.

Mike Hankinson               Graham O'Connor
Chairman                     Chief Executive Officer

CHANGES TO THE BOARD OF DIRECTORS
Mr Andrew Waller was appointed as an independent non-executive director with effect from 7 February 2018.

DECLARATION OF ORDINARY DIVIDEND
Notice is hereby given that an interim gross cash dividend of 270 cents per share has been declared by the board in respect of the six months ended 
31 March 2018. The dividend has been declared out of income reserves.

The salient dates for the payment of the final dividend are detailed below:
Last day to trade cum-dividend                        Tuesday, 19 June 2018
Shares to commence trading ex-dividend              Wednesday, 20 June 2018
Record date                                            Friday, 22 June 2018
Payment of dividend                                    Monday, 25 June 2018

Shareholders will not be permitted to dematerialise or rematerialise their shares between Wednesday, 20 June 2018 and Friday, 22 June 2018,
both days inclusive.

In terms of South African taxation legislation effective from 1 April 2012, the following additional information is disclosed:

- The South African local dividend tax rate is 20%;
- The net local dividend amount is 216 cents per share for shareholders liable to pay tax on dividends and 270 cents per share for shareholders exempt from
  such dividend tax;
- The issued share capital of The SPAR Group Limited is 192 602 355 ordinary shares; and
- The SPAR Group Limited's tax reference number is 9285/168/20/0.

By order of the board

Mandy Hogan    
Company Secretary        
Pinetown
29 May 2018

DIRECTORATE AND ADMINISTRATION

DIRECTORS: MJ Hankinson* (Chairman), GO O'Connor (Chief Executive Officer), MW Godfrey, WA Hook, MP Madi*, M Mashologu*, HK Mehta*, P Mnganga*, R Venter, AG Waller*,
CF Wells*
* Non-executive

Company Secretary: MJ Hogan

Registered office
22 Chancery Lane
PO Box 1589
Pinetown
3600

Transfer secretaries
Link Market Services South Africa (Pty) Ltd
PO Box 4844
Johannesburg
2000

Auditors
PricewaterhouseCoopers Inc.
PO Box 1274
Umhlanga Rocks
4320

Sponsor
One Capital
PO Box 784573
Sandton
2146

Bankers
Rand Merchant Bank, a division of FirstRand Bank Ltd
PO Box 4130
The Square
Umhlanga Rocks
4021

Attorneys
Garlicke & Bousfield
PO Box 1219
Umhlanga Rocks
4320

WEBSITE
www.spar.co.za

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