SPAR to start trading on A2X

SPAR to start trading on A2X

By Nicola Mawson

JSE-listed retailer SPAR will start trading on the A2X as a secondary listing on May 15 but will retain its main listing on the JSE.

In a statement to shareholders yesterday, the retail group said its JSE listing and issued share capital would be unaffected by the secondary listing on A2X.

SPAR group CEO Angelo Swartz said the secondary listing would allow investors to have easy access to its stock at low transaction costs.

“The listing through the A2X secondary-listing platform will also come with improved liquidity and narrower spreads,” Swartz said.

The listing will bring the number of instruments listed on A2X to 184 with a combined market capitalisation of around R9.4 trillion, a significant growth from R657 million in trade value when A2X started in 2017.

Listed companies include more than 30 of companies classified in the Top40 Index.

A2X CEO Kevin Brady said the exchange looked forward to extending the many benefits that a listing on A2X would bring to SPAR’s investors.

According to Henley and Partners, even though the JSE All Share Index, which makes up more than 50% of Africa’s listed company holdings, gained in local currency terms, it was down 5% between 2013 and 2023.

In A2X’s quarterly update in January, Brady noted that listing on the A2X brought with it savings to the market of about R900m per year.

“If all companies are listed on A2X, we estimate this to grow to R1.32bn a year,” he said.

SPAR, which operates in 11 countries, reported a turnover of R149.3bn for the year to September, a 10% improvement on the previous year.

This was due to strong performance from its Irish business, although group profitability was negatively impacted by the IT system implementation challenges, operating losses in Poland, certain non-recurring items and higher debt costs due to rising interest rates.

This led to diluted headline earnings per share dropping 47.7% to 606.3 cents.

SPAR is set to sell its Polish operations. The group has repurposed the IT systems programme, and is also reviewing its debt structure.

It did not declare a dividend at the end of the year.

SPAR has wholesale warehousing and distribution operations in southern Africa and parts of Europe that supports more than 4 500 stores through 14 distribution centres.

In southern Africa, it boasts more than 1 000 grocery stores, almost 900 TOPS at SPAR liquor stores, 400 Build It stores, and 125 pharmacies.

The SPAR model is predominantly driven by the strength of entrepreneurial independent retailers and offers investors exposure to groceries, liquor, pharmaceuticals and building materials in southern Africa

In Europe, the group also has exposure to corporate grocery retail stores, cash-and-carry businesses and food services.

As of XX yesterday, its shares were trading at XX, a XX% decline on the day.

BUSINESS REPORT