JOHANNESBURG - South African supermarket retailer SPAR Group reported a decline in full-year profit on Monday despite improved overall performance, as increased financing costs and a higher effective tax rate ate into earnings.

The retailer said its diluted headline earnings per share, a key profit measure, from continuing operations fell 8.96% to 795.4 cents for the 52 weeks ended September 2025 from 873.7 cents a year earlier.

Group revenue rose 1.6% to 132.4 billion rand ($7.82 billion), with the second half logging a 3.5% increase on stronger grocery and liquor volumes, as well as retailer engagement programmes.

Gross operating profit increased by 2.3% to 2.8 billion rand, supported by solid performances in Southern Africa.

SPAR completed the disposal of its Switzerland and Poland businesses over the past two financial years, reducing net debt to 5.4 billion rand from 9.1 billion rand a year earlier.

However, the group saw higher financing costs linked to legacy Poland debt assumed in South Africa, which resulted in non-deductible interest and a higher effective tax rate.

In Southern Africa, full-year revenue grew by 2.3%, driven by 2.9% growth in revenue from the sale of merchandise in the second half of the financial year.

The groceries and liquor business reported a 1.9% year-on-year increase in sales, helped by improved growth in the latter half when sales rose 2.9%.

"The group enters the 2026 financial year with improved financial resilience, streamlined operations and a clearer set of execution priorities," SPAR said in a statement.

($1 = 16.9267 rand)