Trading update for the 20 weeks to 16 February 2024

The SPAR Group Limited
(Incorporated in the Republic of South Africa)
Registration number: 1967/001572/06
Share Code: SPP
ISIN: ZAE000058517
("SPAR" or the "Group")

TRADING UPDATE FOR THE 20 WEEKS TO 16 FEBRUARY 2024

The Group delivered a resilient trading performance with turnover increasing by 9.3% for the
20 weeks ended 16 February 2024 (the "period").

The Group's diversified strategy has ensured delivery of a strong top line, aided by the strength
of foreign currency against the Rand. This trading performance should be viewed against the
backdrop of tough trading conditions in all markets, as consumers continue to seek greater
value, in light of ongoing inflationary and other cost-of-living pressures.


SPAR Southern Africa
  • Total wholesale sales growth of 5.6%, notably impacted by a weaker than expected
    grocery business performance
  • Combined core grocery and liquor turnover growth of 6.1%, against internally
    measured price inflation of 7.5%
         o SPAR grocery wholesale business increased sales by 5.1%; performance was
           negatively impacted by the system-related business disruption experienced in
           the KwaZulu-Natal (KZN) region
         o In line with SPAR's strategy to offer better value for our independent retailers
           and SPAR shoppers, SPAR's private label business performed strongly
         o SPAR's on demand shopping platform, SPAR2U is now available at 403 sites
           for groceries and liquor (201 sites as of January 2023); online food and liquor
           sales increased by 450% against the prior comparative period
         o TOPS at SPAR liquor has recovered strongly with sales increasing by 12.7%
  • Despite a sustained downturn in both building materials retail and construction activity,
    Build it delivered pleasing sales growth of 0.5%
  • The pharmaceutical business delivered strong turnover growth of 11.6%, with both
    Pharmacy at SPAR and Scriptwise trading robustly during the period
BWG Group (Ireland and South West England)
  • A solid trading performance in both regions with turnover increasing by 7.1% in EUR
    terms and 19.1% in ZAR terms
SPAR Switzerland
  • Reported a decline in turnover of 5.7% in CHF terms, but an increase of 9.2% in ZAR
    terms, as consumer preference shifts towards supermarkets, discounters or
    neighbouring-country retailers offering cheaper prices
SPAR Poland
  • Turnover decreased by 2.9% in PLN terms, but increased by 16.1% in ZAR terms,
    impacted by a decline in retailer loyalty following the Group's announcement to sell its
    interests in SPAR Poland


ZAR turnover growth %

                                                                             20 weeks ended
                                                                            16 February 2024
                                                                                 (% change)
 Wholesale grocery business                                                              5.1
 TOPS/Liquor sales                                                                      12.7
 Combined grocery and liquor                                                             6.1
 Build it                                                                                0.5
 S Buys – pharmaceutical business                                                       11.6
 Southern Africa                                                                         5.6
 BWG Group (Ireland and South West England)                                             19.1
 Switzerland                                                                             9.2
 Poland                                                                                 16.1
 Group                                                                                   9.3


SAP IMPLEMENTATION UPDATE

In February 2023, the new system went live at the distribution centre in KZN. The disruption
to this region and impact on profitability over the past 12 months has been extensive.

Fundamentally, while the system is functioning as designed, the business' ability to predict
demand and manage availability is not yet optimal. The sub-optimal use of the system is
impacting margin and exaggerating costs for this region.

The Group has performed a thorough reassessment of the SAP project over the past six
months which involved stabilising the KZN implementation, reassessing the warehouse
management system and whether it is fit for purpose and reviewing how the system can
continue to be rolled out at a significantly reduced risk level. This will include separating the
ERP from the warehouse system and implementing them independently.


SPAR POLAND UPDATE

Significant progress has been made to dispose of the Group's interests in SPAR Poland.
Management's ambition is to negotiate the best possible outcome for all stakeholders.
Negotiations are still in early stages and more information will be provided as the process
progresses.


BANKING FACILITIES

The Group is considering various debt structuring options. An optimised debt structure is
largely dependent on the outcome of the disposal of the Group's interests in SPAR Poland.
All financiers continue to remain supportive, and the Group does not intend to raise any capital
from shareholders.


INTERIM RESULTS

The financial results for the six months ending 31 March 2024 will be published on SENS on
or about Wednesday, 5 June 2024.

SPAR shareholders are advised that the financial information contained in this announcement
is the responsibility of the directors and has not been audited, reviewed or reported on by the
Group's auditors.


By order of the Board


Pinetown
21 February 2024

Sponsor
One Capital

Corporate Broker
Rand Merchant Bank, a division of FirstRand Bank Ltd

Date: 21-02-2024 09:00:00
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