Star 2024-09-05

SPAR GROUP’S turnaround plans gathered pace with the conclusion of a sale agreement for the disposal of Spar Poland to local Polish retailer Specjal for about R3 billion. The sale of Spar Poland was for PLN40 million (Polish zloty or R185m), while Spar would be required to recapitalise the business, which is estimated to cost PLN586 446 288 (R2.7 billion), the majority of which would be achieved by Spar settling the business’s funding debt, a statement said yesterday. Specjal is a Polish retailer and wholesaler established in 1990 with a reputation for growth and innovation, a statement from Spar said yesterday. The widely anticipated deal provides certainty for Spar investors, removes loss-making business from the balance sheet and allows Spar to focus resources into its…

THE FOSCHINI Group (TFG) said yesterday its group gross margin increased by more than 100 basis points for the 21 weeks ended August 24 when compared with the same period in 2023, despite 3.5% lower sales as margins improved across all territories. Gross margin for TFG Africa increased by 200 basis points against a decline in sales of 1% (like-for-like decline of 2.6%), mainly due to high clearance activity during the prior period and the late start to winter in South Africa, a trading statement said. The result of the higher margin, despite the normalised sales activity, meant TFG Africa achieved a gross profit record of R5.9 billion, up 4% on the prior period. Group online sales grew 7.8% and contributed 10.8% to total sales; the growth largely attributable…

SENTIMENT in the business sector remained in the contractionary territory in the third quarter of 2024 in spite of gradually improving as a result of structural reforms embarked on by the Government of National Unity (GNU). The RMB/BER Business Confidence Index (BCI), released yesterday, rose by another three points to reach 38 points in the third quarter, still below the 50-points mark that separates contraction from expansion, following a five-point increase in the second quarter. This is the first business sentiment survey in South Africa following the formation of the GNU and reflects cautious optimism about improving business conditions. RMB said that although respondents still noted constraints, especially weak demand, they were less negative about current conditions and, encouragingly, were more upbeat about business conditions going forward. For the…

THE INTERNATIONAL Monetary Fund (IMF) said yesterday that South Africa had an opportunity to take advantage of its new dispensation to “implement bold reforms to address long-standing challenges and achieve the economy’s full potential”. The IMF, which was in South Africa between July 1 and 8, made this statement following the conclusion of its Post Financing Assessment discussions with the National Treasury. Its position is broadly in line with that of most market commentators, who see the recently formed Government of National Unity (GNU) as an opportunity to restore confidence in South Africa through the introduction of policies that will remove bottlenecks and fast-track growth. Noting that South Africa continues to face persistent structural challenges, the IMF said that the government had the chance to “turn the economy around from…

SOUTH Africa’s liquefied petroleum gas (LPG) day zero, predicted for June 2026 after Sasol announced it would stop supplying gas from Mozambique, has been averted by an innovative partnership between Transnet Freight Rail (TFR) and Singaporean company, Petredec, in which the LPG logistics firm will introduce South Africa’s first scheduled LPG train system, with each 75-wagon trainset capable of transporting more than 2 500 tons of LPG. Initially operating up to three times per week, the arrangement is expected to plug the void anticipated to gape open on the back of Sasol’s announcement last year that it will be halting supply to downstream consumers from 2026, partly because it had failed to find sufficient reserves to replace an anticipated tapering of supply from southern Mozambique and partly because Sasol…

SOUTH Africa faces a clear choice. Does it want a thriving and competitive domestic world-class steel industry, or to become dependent on the vagaries of dominant international producers and imports? Given the strategic importance and high multiplier effects of the primary steel industry, as well as the huge cost of establishing, renewing and replacing a domestic steel industry, there can be no ambiguity. The costs of losing steel manufacturing capacity are enormous and extend way beyond purely financial considerations. For some local importers, the competitive price advantage they claim to gain from cheap subsidised imports should be seen for what it is, self-interested short-term commercial benefit. That the South African primary steel industry (which consists of 15 primary steel producers and two rerollers) is facing severe challenges is indisput- able.…