November 14, 2018 / 6:31 AM / a year ago

UPDATE 1-European businesses help lift South Africa's SPAR FY earnings

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JOHANNESBURG, Nov 14 (Reuters) - South African retailer and wholesaler SPAR Group Ltd reported on Wednesday a 1.4 percent increase in full-year headline earnings, boosted by improving contributions from its European businesses.

SPAR, a grocery chain which also sells building materials and medicine in Southern Africa, said headline earnings per share rose to 965.7 cents for the year-ended September from 952.8 cents a year earlier.

Headline earnings per share is the main profit measure in South Africa and strips out certain one-off items.

Group turnover increased by 5.9 percent to 101 billion rand ($7.00 billion)

South African retailers have struggled to lift sales and profit to double-digit numbers as elevated household debts, higher fuel prices and an increase in value-added tax squeeze consumer income.

In Southern Africa, its biggest market, turnover increased 6.7 percent, boosted by the inclusion of the S Buys pharmaceutical business acquired on October 2017, strong liquor sales growth and an expansion in the building materials business.

“Against the backdrop of subdued consumer and business confidence in Southern Africa, the trading environment is expected to remain largely unchanged in the medium term,” SPAR said in a statement.

The BWG Group, a unit of SPAR, reported euro-denominated turnover growth of 4.2 percent in Ireland, while SPAR Switzerland saw operating profit jump 80.6 percent.

The board declared a full-year dividend of 729 cents, up 8 percent. ($1 = 14.4236 rand) (Reporting by Nqobile Dludla; Editing by Amrutha Gayathri)

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