SPAR Group Ltd Pre close Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Can you take us through the trading conditions and performance across the three regions? Thanks, Angelo.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Can you just comment on food inflation in the last three months? We've obviously seen a deceleration in the headline number. What is your experience in the business?

Question: Warwick Bam - RMB Morgan Stanley - Analyst : One of the areas that I know the audience would be interested in getting a sense of any green shoots from an economic perspective is your Build it business, given its exposure to interest rate sensitivity. Slight increase in sales volumes there. Just give us a sense of the trading conditions.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Can you just give us an update on the timing and the costs in relation to the sale of the Poland business?

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Thanks. Turning our attention to South Africa in which you had a lot of complexity in the half year results around the IT implementation and the impact thereof. Can you give us an update on how that's progressing?

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Okay, that's very helpful. So sticking to you with South Africa, how have your franchise loyalty rates? I think you've mentioned that, just specifically KZN. Elsewhere, are those all stable?

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Very interesting. What are some of the big strategic focus areas that you've been on in the second half? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 30, 2024 / 9:00AM, SPPJ.J - SPAR Group Ltd Pre close Call

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Let's start with South African.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Fantastic. I guess one of the natural concerns with food inflation starting to decline in South Africa is that you would have to manage your expenses very tightly, but there will be some offset given the fact that, for instance, transport costs may be declining at a similar rate. Just give us a sense of how you see the short-term dynamics with food inflation and costs. And then again, on a slightly more medium term, you've reiterated your ambition to achieve 3%, in South Africa, by 2026. Do you see that as a ceiling or is there potential to improve that further beyond 3%? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 30, 2024 / 9:00AM, SPPJ.J - SPAR Group Ltd Pre close Call

Question: Warwick Bam - RMB Morgan Stanley - Analyst : No, I think you've covered it. It was really just around the EBIT margin. I think near-term trends and longer-term trends (multiple speakers)

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Thanks, thanks. Let's move to Ireland and the UK. Just come back to some of the trading dynamics, a little bit of seasonality, especially in Southwest England. Just give us a sense of how that business is performing in your eyes and what your longer-term strategic plans are specifically for the southwest of England.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Are there any operational, just on that point, I guess you're framing it as if it's a hold-or-sell kind of scenario here. Are there any operational reactions or responses that you could implement to mitigate some of these challenges?

Question: Warwick Bam - RMB Morgan Stanley - Analyst : All right, give us some more color just around the GP margin progression and some of the expense trends in the period.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Ireland and the UK.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Okay, maybe just focus on the Irish business in particular with regards to the EBIT margins. I think at the half, you were looking at a target EBIT margin of 2.8.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Okay, fantastic. To Switzerland, you spoke to, I guess, some of the dynamics that we've seen in the past in terms of price sensitivity and down trading and cross-border sales. This seems like a very difficult period, gives a sense of how the dynamics are playing out.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Thanks. So at a group level, just give us some view on debt. You spoke about the Polish debt earlier. Just give us a sense of group debt metrics and covenants and the changes there.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Give us a sense of your CapEx-focused areas in the second half. How did that play out relative to what you had expected and how do you see this evolving into 2025? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 30, 2024 / 9:00AM, SPPJ.J - SPAR Group Ltd Pre close Call

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Thanks. I'm going just remind everyone that we will go to Q&A shortly. I've got a couple left. (Event Instructions) So just give us a sense of stores opened in the second half. Are you -- how did that track? Are you comfortable with the pipeline for 2025? And how are you thinking about store openings versus refurbishments?

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Fantastic. That's all from me. I'm going to turn to the participants. Feel free to raise your hand. I don't see any raised hands, but [Corbus Salih], you're welcome to go ahead.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Thanks, Corbus. Next question is from [Darren]. Please go ahead, Darren. Unidentified Participant Thank you, everyone from SPAR for doing this call. I've got a few questions. Could you please just first of all, give us an update with CSnx? How's it going? And then also, what stats do you have in relation to CNX installations? What percentage are problematic in comparison to what used to be conceived with SPAR? I'll start with that. I've got two others, but let me just start.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Thanks, Darren. Paul Steegers, welcome to go ahead.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Okay, got it. Thank you. Angelo, maybe I can just follow up at the low end. Now, will you also be looking to experiment, you spoke a little bit about the complexities of different product mix with some of the township stores? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 30, 2024 / 9:00AM, SPPJ.J - SPAR Group Ltd Pre close Call

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Okay, very interesting. Murray Moore, welcome to go ahead.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : All right, thanks, Murray. I'm conscious of time. We've got three in the queue here. So quickly, Sa'ad Chothia, go ahead with your question.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : All right, thanks, thanks, Sa'ad. Irina Schulenburg, feel free to go ahead.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : All right, thanks. We've got time for one more. I see, David Smith, you're welcome to go ahead. Michael, I see your hands up as well. Please excuse us. I think we're going to be out of time. So David, you can round us out.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : All right.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Did we lose David? I've lost him.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Now you're back. Go for it. Try again.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : I don't think he can hear us. So let's pause on David and we'll go to Michael.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Thanks, Michael. Okay, David, go ahead.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Okay, fantastic. Well, I think that grounds it out. Angelo, I'm gonna hand it back to you just for some closing remarks before we end on.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Thank you, Angelo. And thank you, Mark and Megan for the call and then answering the questions as you did. And thanks to everyone for participating.

Question: Warwick Bam - RMB Morgan Stanley - Analyst : Have a great day and all the best.