Spar Group (JSE:SPP) Interest Coverage : 1.02 (As of Sep. 2023)

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What is Spar Group Interest Coverage?

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. Spar Group's Operating Income for the six months ended in Sep. 2023 was R787 Mil. Spar Group's Interest Expense for the six months ended in Sep. 2023 was R-768 Mil. Spar Group's interest coverage for the quarter that ended in Sep. 2023 was 1.02. The higher the ratio, the stronger the company's financial strength is.

Warning Sign:

Ben Graham prefers companies' interest coverage to be at least 5. Spar Group Ltd interest coverage is 1.54, which is low.

The historical rank and industry rank for Spar Group's Interest Coverage or its related term are showing as below:

JSE:SPP' s Interest Coverage Range Over the Past 10 Years
Min: 1.54 Med: 6.3 Max: 65.44
Current: 1.54

JSE:SPP's Interest Coverage is ranked worse than
88.89% of 252 companies
in the Retail - Defensive industry
Industry Median: 8.81 vs JSE:SPP: 1.54

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Spar Group Interest Coverage Historical Data

The historical data trend for Spar Group's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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Spar Group Interest Coverage Chart

Spar Group Annual Data

Trend

Sep14

Sep15

Sep16

Sep17

Sep18

Sep19

Sep20

Sep21

Sep22

Sep23

Interest Coverage

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8.28

3.18

3.42

3.27

1.54

Spar Group Semi-Annual Data
	Mar14	Sep14	Mar15	Sep15	Mar16	Sep16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23
Interest Coverage	Get a 7-Day Free Trial															3.24	3.51	3.03	2.17	1.02

Competitive Comparison of Spar Group's Interest Coverage

For the Food Distribution subindustry, Spar Group's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Spar Group's Interest Coverage Distribution in the Retail - Defensive Industry

For the Retail - Defensive industry and Consumer Defensive sector, Spar Group's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Spar Group's Interest Coverage falls into.

Spar Group Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Spar Group's Interest Coverage for the fiscal year that ended in Sep. 2023 is calculated as

Here, for the fiscal year that ended in Sep. 2023, Spar Group's Interest Expense was R-1,398 Mil. Its Operating Income was R2,156 Mil. And its Long-Term Debt & Capital Lease Obligation was R20,596 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Sep. 2023 )	/	Interest Expense (A: Sep. 2023 )
	=	-1	*	2156.4	/	-1398.3
	=	1.54

Spar Group's Interest Coverage for the quarter that ended in Sep. 2023 is calculated as

Here, for the six months ended in Sep. 2023, Spar Group's Interest Expense was R-768 Mil. Its Operating Income was R787 Mil. And its Long-Term Debt & Capital Lease Obligation was R20,596 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Sep. 2023 )	/	Interest Expense (Q: Sep. 2023 )
	=	-1	*	786.5	/	-768
	=	1.02

The higher the ratio, the stronger the company's Financial Strength is.

Spar Group (JSE:SPP) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

Spar Group Interest Coverage Related Terms

Thank you for viewing the detailed overview of Spar Group's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

Spar Group (JSE:SPP) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Retail - Defensive » Spar Group Ltd (JSE:SPP) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

SGPPY:USA

Address

22 Chancery Lane, P.O. Box 1589, Pinetown, NL, ZAF, 3600

Website

https://www.spar.co.za

Spar Group Ltd is a wholesaler and distributor of goods and services to the group's retail outlets such as SPAR stores, Build it builders' merchandise outlets, TOPS at SPAR liquor stores, and others across Southern Africa. The company also has operations that comprise independently owned SPAR, MACE, XL and Londis stores in Ireland and southwest England. The company provides independent retailers the option to own or lease its stores and operate under the SPAR brand. The Southern Africa segment represents the majority of group revenue, with Ireland contributing an increasing proportion. The company delivers goods to the stores by a fleet of trucks and trailers owned by the SPAR Group. The group has two primary private brands namely SPAR and SaveMor.

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