JSE:SPP

Stock Analysis Report

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Executive Summary

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.


Snowflake Analysis

Average dividend payer with limited growth.


Similar Companies

Share Price & News

How has SPAR Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SPP has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

6.9%

SPP

5.4%

ZA Consumer Retailing

3.9%

ZA Market


1 Year Return

-0.02%

SPP

-17.0%

ZA Consumer Retailing

-19.8%

ZA Market

Return vs Industry: SPP exceeded the ZA Consumer Retailing industry which returned -20.8% over the past year.

Return vs Market: SPP exceeded the ZA Market which returned -24.1% over the past year.


Shareholder returns

SPPIndustryMarket
7 Day6.9%5.4%3.9%
30 Day3.1%2.3%7.1%
90 Day9.7%-9.7%-3.5%
1 Year2.6%-0.02%-15.2%-17.0%-8.3%-19.8%
3 Year35.7%20.8%-9.6%-15.5%9.1%-11.8%
5 Year21.9%2.6%5.5%-6.7%15.3%-13.8%

Price Volatility Vs. Market

How volatile is SPAR Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

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

18.76x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SPP (ZAR179.78) is trading above our estimate of fair value (ZAR133.42)

Significantly Below Fair Value: SPP is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: SPP is poor value based on its PE Ratio (18.1x) compared to the Consumer Retailing industry average (17.7x).

PE vs Market: SPP is poor value based on its PE Ratio (18.1x) compared to the ZA market (7.9x).


Price to Earnings Growth Ratio

PEG Ratio: SPP is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: SPP is overvalued based on its PB Ratio (5x) compared to the ZA Consumer Retailing industry average (4x).


Next Steps

Future Growth

How is SPAR Group forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

16.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SPP's forecast earnings growth (16.4% per year) is above the savings rate (9.5%).

Earnings vs Market: SPP's earnings (16.4% per year) are forecast to grow slower than the ZA market (19.5% per year).

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

Revenue vs Market: SPP's revenue (6.4% per year) is forecast to grow slower than the ZA market (8.5% per year).

High Growth Revenue: SPP's revenue (6.4% 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 (29.1%)


Next Steps

Past Performance

How has SPAR Group performed over the past 5 years?

6.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SPP has high quality earnings.

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


Past Earnings Growth Analysis

Earnings Trend: SPP's earnings have grown by 6.5% per year over the past 5 years.

Accelerating Growth: SPP's earnings growth over the past year (6.2%) is below its 5-year average (6.5% per year).

Earnings vs Industry: SPP earnings growth over the past year (6.2%) underperformed the Consumer Retailing industry 6.2%.


Return on Equity

High ROE: Whilst SPP's Return on Equity (27.07%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is SPAR Group's financial position?


Financial Position Analysis

Short Term Liabilities: SPP's short term assets (ZAR23.7B) do not cover its short term liabilities (ZAR25.4B).

Long Term Liabilities: SPP's short term assets (ZAR23.7B) exceed its long term liabilities (ZAR19.4B).


Debt to Equity History and Analysis

Debt Level: SPP's debt to equity ratio (149.9%) is considered high.

Reducing Debt: SPP's debt to equity ratio has increased from 118.7% to 149.9% over the past 5 years.

Debt Coverage: SPP's debt is not well covered by operating cash flow (17.4%).

Interest Coverage: SPP's interest payments on its debt are well covered by EBIT (20.3x coverage).


Balance Sheet


Next Steps

Dividend

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

4.29%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: SPP's dividend (4.45%) isn’t notable compared to the bottom 25% of dividend payers in the ZA market (4.7%).

High Dividend: SPP's dividend (4.45%) is low compared to the top 25% of dividend payers in the ZA market (12.23%).


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%), 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 (60.5% payout ratio).


Next Steps

Management

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

9.4yrs

Average management tenure


CEO

Graham O’Connor (63yo)

6.42yrs

Tenure

R14,592,000

Compensation

Mr. Graham Owen O’Connor, B.com, CA (SA), has been the Group Chief Executive Officer of the SPAR Group Limited since January 31, 2014. He joined the SPAR Group Limited in 1986. Mr. O’Connor is a Partner in ...


CEO Compensation Analysis

Compensation vs Market: Graham's total compensation ($USD850.89K) is below average for companies of similar size in the ZA market ($USD1.25M).

Compensation vs Earnings: Graham's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Graham O’Connor
Group CEO & Executive Director6.42yrsR14.59m0.028% ZAR10.0m
Mark Godfrey
Group Financial Director & Executive Director9.67yrsR11.29m0.010% ZAR3.5m
Mark Huxtable
Chief Information Officer & Group IT Executive0.75yrno datano data
Kerry Becker
Investor Relations Consultantno datano datano data
Mike Prentice
Group Marketing Executive13.42yrsno datano data
Thulisile Tabudi
Group Human Resources Executive12.58yrsno datano data
Brett Botten
Managing Director of SPAR South Rand Division10.42yrsno datano data
Desmond Borrageiro
Managing Director of SPAR North Rand Division8.42yrsno datano data
Alison Zweers
Managing Director SPAR Western Cape Division & Namibia4.42yrsno datano data
Max Oliva
Managing Director of SPAR KwaZulu-Natal divisionno datano datano data

9.4yrs

Average Tenure

51yo

Average Age

Experienced Management: SPP's management team is seasoned and experienced (9.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Graham O’Connor
Group CEO & Executive Director6.42yrsR14.59m0.028% ZAR10.0m
Mark Godfrey
Group Financial Director & Executive Director9.67yrsR11.29m0.010% ZAR3.5m
Robert Philipson
CEO of SPAR Switzerland & Chairman of SPAR Sri Lankano datano datano data
Leo Crawford
Group Chief Executive of BWG Group & Chairman: SPAR Irelandno datano datano data
Harishkumar Mehta
Independent Non-Executive Director15.67yrsR848.00k0.0063% ZAR2.2m
Michael John Hankinson
Independent Non-Executive Chairmanno dataR1.39m0.0015% ZAR521.4k
Phumla Mnganga
Independent Non-Executive Director14.42yrsR741.00kno data
Andrew Waller
Independent Non-Executive Director2.33yrsR631.00k0.0017% ZAR595.4k
Lwazi Koyana
Independent Non-Executive Director1.08yrsR185.00kno data
Marang Mashologu
Independent Non-Executive Director4.5yrsR544.00kno data

6.3yrs

Average Tenure

55yo

Average Age

Experienced Board: SPP's board of directors are considered experienced (6.3 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 company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The SPAR Group Ltd
  • Ticker: SPP
  • Exchange: JSE
  • Founded:
  • Industry: Food Distributors
  • Sector: Consumer Retailing
  • Market Cap: R35.230b
  • Shares outstanding: 188.92m
  • Website: https://www.spar.co.za

Number of Employees


Location

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

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SGPP.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDOct 2004
SPPJSE (The Johannesburg Securities Exchange)YesOrdinary SharesZAZAROct 2004

Biography

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, meat, and baked goods. It operates six distribution centers. The SPAR Group Ltd is headquartered in Pinetown, South Africa. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/06/04 18:41
End of Day Share Price2020/06/03 00:00
Earnings2020/03/31
Annual Earnings2019/09/30


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.