Earnings release
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THE SPAR GROUP LIMITED (Incorporated in the Republic of South Africa) Registration number: 1967/001572/06 JSE and A2X share code: SPP ISIN: ZAE000058517 (“SPAR” or the “Group”) TRADING UPDATE FOR THE 18 WEEKS ENDED 30 JANUARY 2026 TRADING ENVIRONMENT OVERVIEW Over the 18 weeks ended 30 January 2026 (the “ period”), the Group operated in a highly competitive market with low food inflation and deflation in several key categories. In response, SPAR deliberately intensified promotional activity to support retailers, protect volumes, and reinforced its value proposition. Against this backdrop, the Group wholesale turnover from continuing operations for the period was 2.1% up year on year. However, gross profit margins in Southern Africa decline d relative to the comparable prior period. This reflects an unfavourable sales mix, the impact of our targeted promotional strategy over the Black Friday period, and our continued investment in loyalty and margin recovery initiatives in KwaZulu-Natal (“KZN”). ZAR Turnover growth 18 weeks ended 30 January 2026 (% change) * Grocery & Liquor 0.8 Build it (2.4) SPAR Health 23.0 Southern Africa 0.9 Ireland 6.1 Group 2.1 * Year-on-year SOUTHERN AFRICA Wholesale sales in Southern Africa recorded a muted growth of 0. 9% year-on-year during the period, with Liquor growing at 2.9%. Internal selling price inflation averaged 2.6% over the period, compared to the official food inflation which measured 4.3%. Grocery & Liquor ’s growth for the p eriod was impacted by a softer October (following a strong September which benefited from the introduction of the new retailer rebate scheme concluded in the 2025 financial year). Encouragingly, trading momentum improved over the subsequent 13-week period (November 2025 to January 2026), where sales increased 2.3% year-on-year. Build it trade softened into the festive months, reflecting sector-wide construction pressure and adverse weather. SPAR Health continued to deliver strong growth across both wholesale and Scriptwise channels. Retail sales for the p eriod increased 1.7% year-on-year (like-for-like: +1.9%) . In South Africa, r etail sales grew by 1.9% (like for like: +2.25%), with year -to-date loyalty recorded at 80.9%, excluding neighbouring markets which experienced a marked slowdown. Including neighbouring markets, total year-to-date loyalty stands at 79.3%. Pleasingly, the high-income segment demonstrated modest recovery, as retail sales improved to 1.6% on a like- for-like basis. The SUPERSPAR format showed relative resilience with p erishables comparatively stronger than dry goods , supporting underlying customer demand in core fresh categories. Retailer loyalty in KZN showed a slight improvement year-to-date (+0.29% to 71.5%), yet remains below
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historical and targeted levels, while the loyalty weighted average across the balance of the distribution network in South Africa remains strong at c.84% for the first four months of the 2026 financial year. The Group continues to actively focus on strengthening retailer economics and commercial governance in affected regions. IRELAND BWG Group delivered a solid performance in the period with sales growth of 3.1% in local currency , despite a competitive trading environment and continued cost-of-living pressures. Sales were supported by continued growth in higher-margin non-tobacco categories and strong performance in Food services. Retailer loyalty across the BWG estate remained strong, with stability across key brands. AWG DISPOSAL UPDATE (SOUTH-WEST ENGLAND OPERATIONS) As previously communicated, the Group continues to progress the disposal of its UK business, Appleby Westward Group (“AWG”), which is presented as a discontinued operation. Discussions have advanced and the transaction structure has been substantially agreed, subject to final documentation and customary approvals. The proposed structure is designed to facilitate an orderly transition of the business while limiting ongoing financial exposure for the Group. Based on the impairment recognised in the financial year ended 26 September 2025, and updated assessments of asset values, management does not currently expect a further material impairment in respect of AWG. Further, the Group does not anticipate needing to make a cash injection to e ffect the disposal. The Group will provide a further market update once binding agreements have been executed. The board of directors of the Group (“Board”) remains focused on concluding the disposal in a manner that simplifies the Group’s geographic footprint, strengthens balance sheet resilience and supports disciplined capital allocation. FOCUS ON MARGINS A significantly rising cost base, including rising operating and wage cost inflation, continued investment in systems transformation, IT infrastructure and the SAP rollout in FY2026 continue to negatively impact margins. In response, and as previously communicated, SPAR has identified a set of structural initiatives to realign its cost base with prevailing trading conditions and medium-term margin objectives. Distribution network optimisation is a key focus area and forms part of a broader structural reset designed to support sustainable operating margin improvement. A dditionally, the Group continues to advance key operating margin initiatives, including the centralisation of non -trade procurement, improved credit discipline, strengthened commercial governance at a central and distribution centre level, improved pricing and concession discipline, logistics productivity enhancements and expanded private label and omni -channel capabilities. Progress is also being made in optimising the corporate store portfolio. While the financial benefits of these actions will materialise progressively, management is confident that disciplined execution of these initiatives will restore operating leverage and reposition the business on a structurally more efficient cost base, capable of supporting sustainable margin recovery. SAP PROGRAMME UPDATE The Group has made amendments to the SAP rollout strategy to focus on capability enablement rather than distribution centre integration. While t he initial approach integrated warehouse, finance and purchasing systems; the revised plan separates finance from distribution centre operations in order to reduce disruption and execution risk. This finance transition to a single SAP environment with a unified chart of accounts will be executed in this financial year, establishing a single version of financial data and enabling efficiency and governance improvements.
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Following the finance go- live, the next phase will enhance drop shipment reporting and credit management, centralise purchases and strengthen pricing governance. We continue to manage the ongoing roll-out with risk mitigations to our business operations at the forefront of our planning. LITIGATION UPDATE The Group confirms that it has been served with a summons relating to alleged claims arising from the SAP implementation at the KZN distribution centre. The Group previously engaged with the claimant to seek resolution of the matter; however, discussions did not yield an agreement. It should be noted that the current amount claimed significantly exceeds the initial claim of R5 million, as presented by the claimant . To date, all KZN retailers affected during the early SAP implementation period (except for the claimant and one additional retailer) have reached amicable settlements with the Group. Service levels at the distribution centre have since stabilised and are now consistent with industry standards, as previously disclosed. The Group remains focused on maintaining stable operations and supporting its independent retailers, and will respond to the summons through the appropriate legal processes . CAPITAL ALLOCATION The Board remains committed to disciplined capital allocation and to returning capital to shareholders. The Group is currently focused on operational priorities and the ongoing execution of margin recovery initiatives. Consistent with prior communication to the market, the Board supports the return of capital in a considered manner, including through share repurchases. Accordingly, shareholders will be requested to approve a general authority for the repurchase of shares at the upcoming Annual General Meeting to be held on Wednesday, 4 March 2026. Subject to shareholder approval, the Board will assess the appropriate timing and quantum of any share repurchases. Further communication will be provided in due course. OUTLOOK Trading conditions in South Africa remain intensely competitive, with low internal inflation and sustained promotional intensity across the market. While trading momentum improved through November 2025 to January 2026, current gross and operating margins reflect the cumulative impact of promotional activity, cost inflation and the ongoing commercial recovery in KZN. As a result, operating margin performance for the first half of FY2026 is expected to remain under pressure relative to the prior comparable period. Margin recovery is anticipated to be gradual and weighted toward the second half of FY2026, as corrective actions in KZN continue to embed, cost realignment initiatives gain traction and wholesale volumes rebuild off a stabilised base. Following the recently announced leadership changes, the Board has full confidence in the Group’s executive team and remains focused on disciplined execution of the Group’s strategic priorities . The Group remains firmly committed to supporting its i ndependent retailers through this transition. Strengthening performance in the Southern Africa Grocery & Liquor segment remains a core priority, and the Board has resolved to appoint a dedicated Managing Director for this segment to enhance execution, reinforce accountability and accelerate operational delivery. Management’s focus remains firmly on the accelerated execution of margin restoration initiatives, balance sheet resilience and operational stability across the network. INTERIM RESULTS Further detail on performance and operational initiatives will be provided at the interim results which will
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be published on SENS on or about Wednesday, 10 June 2026. Shareholders are advised that the financial information contained in this announcement is the responsibility of the Board and has not been audited, reviewed or reported on by the Group’s auditors. Umhlanga 23 February 2026 Sponsor One Capital Corporate Broker Rand Merchant Bank (a Division of FirstRand Bank Limited)