JOHANNESBURG (Reuters) - SPAR Group plans to sell its loss-making business in Poland, the South African grocery retailer and wholesaler said on Thursday, as it reported a 10.6% rise in turnover for the first 47 weeks of its financial year.
At 1000 GMT, shares in SPAR, which also operates in Switzerland and parts of the United Kingdom, were up 9.8% at 111.59 rand.
"Having evaluated and considered all options, the board believes that it is in the best interests of the group and shareholders to engage in a process to dispose of its interests in Poland," the company said in a statement.
After buying a controlling stake in Polish deli and supermarket chain Piotr i Pawel group in 2019, SPAR has been working to turn that business around by attracting retail customers with better rebates, closing loss-making stores and rolling out new ones in new areas, like fuel forecourts.
But last year, it said the uptake from retailers had not been improving quickly enough to deliver the required levels of profitability.
In its half year results in June, SPAR said growth in retailer loyalty and a reduction in operating losses at the Polish business were encouraging.
In the 47 weeks to Aug. 25, SPAR Poland, which contributes 2.4 billion rand ($125 million), or about 1.8%, to group turnover, increased sales by 5% due to improved retailer loyalty, but offset by a reduction in the number of stores in the comparative period.
The group's biggest revenue maker, SPAR Southern Africa, reported sales growth of 5.9%, with sales increasing by 8.1% in its wholesale grocery business, benefiting also from a price hike of 10.1%.
($1 = 19.1862 rand)