JOHANNESBURG - South African ​grocery retailer SPAR ⁠Group reported on Wednesday a 53.9% drop in ‌half-year earnings, weighed down by operational pressures, elevated promotional activity, higher ​debtor provisioning and continued balance sheet cleanup.

Headline earnings per share (HEPS) from ​continuing operations fell ​to 199.9 cents in the 26 weeks ended on March 27, from 434 cents a ⁠year earlier.

Operating profit slumped 45% to 740.5 million rand ($44.74 million), while the operating margin narrowed to 1.1% from 2.1%.

The retailer said its KwaZulu-Natal distribution centre contributed ​123 ‌million rand to ⁠the group's ⁠operating profit decline, citing margin pressure from an aggressive revenue drive, operational ​disruptions that pushed out-of-stock levels higher, ‌and a logistics setup not ⁠suited for higher volumes.

Black Friday promotional subsidies reduced profit by 212 million rand, with the retailer saying the additional spend did not generate "a commensurate return".

Debtor costs rose by 159 million rand, while net debt climbed to 7.3 billion rand from 5.4 billion rand as of September 2025, mainly due to ‌unfavourable working capital movements.

Revenue edged up 1.7% to ⁠50.8 billion rand. Grocery and liquor wholesale ​revenue increased 1.1%, and retail sales were up 1.1% against internal selling price inflation of 2.6%, indicating ongoing ​volume pressure.

($1 = ‌16.5528 rand)