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SPP

SPAR GroupJSE:SPP Stock Report

Market Cap

R38.0b

7D

2.1%

1Y

6.5%

Updated

26 Oct, 2021

Data

Company Financials +
SPP fundamental analysis
Snowflake Score
Valuation4/6
Future Growth2/6
Past Performance5/6
Financial Health4/6
Dividends5/6

SPP Overview

The SPAR Group Ltd engages in the wholesale and distribution of goods and services to SPAR grocery stores and various other branded group retail outlets in Southern Africa, Ireland, Switzerland, and Poland.

SPAR Group Competitors

Shoprite Holdings

JSE:SHP

R101.4b

Clicks Group

JSE:CLS

R69.1b

Woolworths Holdings

JSE:WHL

R53.2b

Pick n Pay Stores

JSE:PIK

R28.2b

Price History & Performance

Summary of all time highs, changes and price drops for SPAR Group
Historical stock prices
Current Share PriceR197.36
52 Week HighR171.11
52 Week LowR213.47
Beta0.037
1 Month Change-3.26%
3 Month Change7.69%
1 Year Change6.45%
3 Year Change14.43%
5 Year Change4.06%
Change since IPO886.80%

Recent News & Updates

Shareholder Returns

SPPZA Consumer RetailingZA Market
7D2.1%0.7%-0.3%
1Y6.5%25.9%19.5%

Return vs Industry: SPP underperformed the ZA Consumer Retailing industry which returned 25.9% over the past year.

Return vs Market: SPP underperformed the ZA Market which returned 19.5% over the past year.

Price Volatility

Is SPP's price volatile compared to industry and market?
SPP volatility
SPP Beta0.037
Industry Beta0.56
Market Beta1

Stable Share Price: SPP is less volatile than 75% of ZA stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: SPP's weekly volatility (3%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19324,527Brett Bottenhttps://www.spar.co.za

The SPAR Group Ltd engages in the wholesale and distribution of goods and services to SPAR grocery stores and various other branded group retail outlets in Southern Africa, Ireland, Switzerland, and Poland. The company offers fresh produce, in-store bakery, butchery, deli, ready-to-eat meals, home-meal replacements, groceries, general merchandise, baked foods, liquor products, Building and hardware products, dispensary and health-related products, confectionery, health and beauty, frozen foods, catering products, wines, and non-food items. It operates 4,357 stores.

SPAR Group Fundamentals Summary

How do SPAR Group's earnings and revenue compare to its market cap?
SPP fundamental statistics
Market CapR37.99b
Earnings (TTM)R2.51b
Revenue (TTM)R128.77b

15.1x

P/E Ratio

0.3x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
SPP income statement (TTM)
RevenueR128.77b
Cost of RevenueR113.15b
Gross ProfitR15.62b
ExpensesR13.11b
EarningsR2.51b

Last Reported Earnings

Mar 31, 2021

Next Earnings Date

Nov 17, 2021

Earnings per share (EPS)13.04
Gross Margin12.13%
Net Profit Margin1.95%
Debt/Equity Ratio149.7%

How did SPP perform over the long term?

See historical performance and comparison

Dividends

4.8%

Current Dividend Yield

72%

Payout Ratio

Valuation

Is SPAR Group undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SPP (ZAR197.36) is trading below our estimate of fair value (ZAR446.52)

Significantly Below Fair Value: SPP is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SPP is good value based on its PE Ratio (15.1x) compared to the ZA Consumer Retailing industry average (25.3x).

PE vs Market: SPP is poor value based on its PE Ratio (15.1x) compared to the ZA market (11.4x).


Price to Earnings Growth Ratio

PEG Ratio: SPP is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: SPP is good value based on its PB Ratio (4.9x) compared to the ZA Consumer Retailing industry average (6.2x).


Future Growth

How is SPAR Group forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

12.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SPP's forecast earnings growth (12.1% per year) is above the savings rate (8.8%).

Earnings vs Market: SPP's earnings (12.1% per year) are forecast to grow slower than the ZA market (12.2% per year).

High Growth Earnings: SPP's earnings are forecast to grow, but not significantly.

Revenue vs Market: SPP's revenue (5.1% per year) is forecast to grow slower than the ZA market (6.3% per year).

High Growth Revenue: SPP's revenue (5.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SPP's Return on Equity is forecast to be high in 3 years time (30.9%)


Past Performance

How has SPAR Group performed over the past 5 years?

5.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SPP has high quality earnings.

Growing Profit Margin: SPP's current net profit margins (2%) are higher than last year (1.7%).


Past Earnings Growth Analysis

Earnings Trend: SPP's earnings have grown by 5.9% per year over the past 5 years.

Accelerating Growth: SPP's earnings growth over the past year (31.3%) exceeds its 5-year average (5.9% per year).

Earnings vs Industry: SPP earnings growth over the past year (31.3%) exceeded the Consumer Retailing industry 14.2%.


Return on Equity

High ROE: Whilst SPP's Return on Equity (31.39%) is high, this metric is skewed due to their high level of debt.


Financial Health

How is SPAR Group's financial position?


Financial Position Analysis

Short Term Liabilities: SPP's short term assets (ZAR22.9B) exceed its short term liabilities (ZAR22.7B).

Long Term Liabilities: SPP's short term assets (ZAR22.9B) exceed its long term liabilities (ZAR20.1B).


Debt to Equity History and Analysis

Debt Level: SPP's debt to equity ratio (149.7%) is considered high.

Reducing Debt: SPP's debt to equity ratio has increased from 130.3% to 149.7% over the past 5 years.

Debt Coverage: SPP's debt is well covered by operating cash flow (45.4%).

Interest Coverage: SPP's interest payments on its debt are well covered by EBIT (14.1x coverage).


Balance Sheet


Dividend

What is SPAR Group current dividend yield, its reliability and sustainability?

4.79%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SPP's dividend (4.79%) is higher than the bottom 25% of dividend payers in the ZA market (3.15%).

High Dividend: SPP's dividend (4.79%) is low compared to the top 25% of dividend payers in the ZA market (7.54%).


Stability and Growth of Payments

Stable Dividend: SPP's dividends per share have been stable in the past 10 years.

Growing Dividend: SPP's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (72.4%), SPP's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SPP's dividends in 3 years are forecast to be covered by earnings (69.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.8yrs

Average management tenure


CEO

Brett Botten (56 yo)

0.58

Tenure

Mr. Brett Walker Botten, B.Com, CA(SA), serves as Group Chief Executive officer at The SPAR Group Ltd since March 01, 2021. He had been the Divisional Managing Director of SPAR South Rand of Spar Group Ltd...


Leadership Team

Experienced Management: SPP's management team is seasoned and experienced (5.8 years average tenure).


Board Members

Experienced Board: SPP's board of directors are considered experienced (4.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

The SPAR Group Ltd's employee growth, exchange listings and data sources


Key Information

  • Name: The SPAR Group Ltd
  • Ticker: SPP
  • Exchange: JSE
  • Founded: 1932
  • Industry: Food Distributors
  • Sector: Consumer Retailing
  • Market Cap: R37.994b
  • Shares outstanding: 192.51m
  • Website: https://www.spar.co.za

Number of Employees


Location

  • The SPAR Group Ltd
  • 22 Chancery Lane
  • Pinetown
  • KwaZulu-Natal
  • 3610
  • South Africa

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/10/26 21:18
End of Day Share Price2021/10/26 00:00
Earnings2021/03/31
Annual Earnings2020/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.