Nqobile Dludla | JOHANNESBURG

South African retailer and wholesaler Spar Group on Wednesday reported a small fall in half-year earnings per share after issuing shares to fund foreign acquisitions and to settle its share schemes aimed at black investors.

Headline earnings per share fell to 475.5 cents for the six months ended March 31 from 480 cents a year earlier.

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

“HEPS declined marginally, fundamentally due to the higher weighted average number of shares as a result of the issue of shares in April 2016 to part fund the foreign acquisitions, as well as settling the BBBEE share schemes in August 2016,” the group said in a statement.

The firm, which is expanding into Europe to diversify earnings away from South Africa’s volatile rand currency, bought Spar Switzerland in 2016.

Sales rose 12.6 percent to 47.4 billion rand ($3.62 billion), slowing from 16.7 percent growth a year earlier.

Spar faced tough trading conditions which are being aggravated by the uncertain economic and political landscape in South Africa as well as the appreciation of the rand against the euro.

S&P Global Ratings and Fitch cut South Africa, whose economy is expected to grow by 1 percent in 2017, to “junk” status in April and Moody’s put it on review for a downgrade after a cabinet reshuffle in which Pravin Gordhan was fired as finance minister.

The board declared an interim dividend of 240 cents, down from 255 cents a year earlier.

“In South Africa, the tough trading environment is likely to persist for the balance of this year, particularly with the political uncertainty undermining consumer and business confidence,” Spar said.

The outlook in BWG Group, the Irish retailer Spar bought in 2014, is “cautious” due to Brexit uncertainties, it said.

($1 = 13.1100 rand)

(Reporting by Nqobile Dludla; editing by Amrutha Gayathri and Jason Neely)