Tuesday , May 11 2021

Ramaphosa's investment support helps retail, says Spar CEO

CEO of SA's second largest grocery trade through sales says it already sees the positive impact of President Cyril Ramaphosa's investment business, and sales increase after the latest set of results.

Save CEO Graham Connor said the government's efforts to promote a friendly environment for businesses are a step in the right direction and should be supported. "The government is listening to business."

Since becoming president in 2018, Ramaphosa made it his priority to reverse the struggling economy by getting local and foreign companies to commit to investing billion rand in it.

O & # 39; Connor said these efforts began to pay, as the move had triggered a change in feeling and sales strengthened since the end of the fiscal year in September. "They actually got better after that."

Total sales increased by 6 percent to R103 billion and operating profit increased by 7.9 percent to R2.78 billion for the period. The Group has operations in Ireland and Switzerland, but the result of its South African operations, which increased sales by 6.7% to R68.8 billion, was the largest growth driver.

O & # 39; Connor can see the early shots of an economy properly, but Sasfin Bank, senior equity analyst Alec Abraham, was more caring. Abraham said that Spar had done well during the period, but he did not think the government did enough to fix the economy.

The latest statistics for the September September retail report showed how much the pain retail sector still went through, with retail sales increasing only 0.7% this year for the month.

Against this background, O & # 39; Connor said he was pleased with the group's local business, which is largely driven by the wine-growing, pharmaceutical and DIY operations.

Save the purchase of drug wholesale S Buys for R74.9m a year ago made a remarkable difference, says O & # 39; Connor. He said it had never made any profit, but the incubation of S Buys made it possible for its pharmacies to buy more affordable products.

Abraham agreed and said, "Having a wholesaler improved profitability."

Acquiring several specialized wholesalers has worked well for Spar's local and offshore operations, "said Abraham. It was one of the main reasons why its operations in Ireland had produced impressive figures, and why Switzerland turned around.

Turnover for Irish operations increased by 9.6 percent to R22.49 billion, and operating profit increased by 13 percent to R574.4 million.

However, sales for its operations in Switzerland were worse than shown, as Spar broke off with its underperforming stores and retained its more profitable stores, Abraham said. Sales for this operation had decreased from R10.4 billion to R9.8 billion, but operating income increased from R69 million to R124.9 million.

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