Massmart Annual Report 2008

“…the benefit of long-term strategic planning and prudent management is evident for the interim period to end-December. CEO Grant Pattison has evidently taken the baton from Mark Lamberti at full speed.”





Massmart in the headlines

Financial Mail

Massmart sales weather slowdown

21 November 2007

Johannesburg – General merchandise retail giant Massmart says the SA retail environment has tightened as higher rates squeeze consumers. CEO Grant Pattison said that despite higher interest rates and the implementation of the National Credit Act affecting consumers, its cash-based model is proving to be relatively resilient. Pattison was speaking at the company’s annual general meeting, held at Massmart’s head office in Sunninghill, north of Johannesburg. He said that for the first 21 weeks of financial 2008, total sales had increased by 12.7%. Sales growth has slowed down from the same period in financial 2007, where growth at the 21-week mark was 16.7%. Growth in comparable store sales had also slowed slightly to 10.6%, compared with 12.6% in financial 2007.

Business Report

Massmart profit shines despite power cuts

29 February 2008

RETAILER Massmart said yesterday power cuts had not seriously affected its trade, but it was difficult to estimate the effect of future failures without a clearer idea of their extent. The company said last month’s power outages had cost it an estimated R103 000 for every two-hour power cut suffered by the group as a whole. Power outages had, however, cost the group only 0,2% of its trading hours. Chief financial officer Guy Hayward said during the discount retailer’s financial results presentation yesterday that it was probably the best-positioned retail sector player to trade successfully through the outages. The group will spend an extra R12m on generators for the 28 stores that did not already have them.

Financial Mail

Proven format pays off

7 March 2008

For the first time in 37 consecutive financial half-years, Massmart was unable to announce real sales growth exceeding 8%. Instead the retailer achieved modest real growth of 3,1%, in a year when there were no acquisitions. Sales grew from R18bn to R20bn, while profit before interest and tax was up to R1,2bn, from R1bn. That said, the benefit of long-term strategic planning and prudent management is evident for the interim period to end-December. CEO Grant Pattison has evidently taken the baton from Mark Lamberti at full speed. The newest leg of the business, Massbuild, acquired De la Rey, Federated Timbers and Servistar, a home-improvement chain, three years ago. It is now a star, growing sales by 16% to R2,9bn, up from R2,5bn, and R1,9bn in 2005. “We are gaining market share, which may mask some of the slowdown in that sector,” says Massmart chief financial officer Guy Hayward.

Business Report

Massmart delivers in tough times

21 August 2008

In an environment dominated by rising food and fuel prices and higher interest rates, retailer Massmart on Thursday announced what it termed “strong” overall results for the year ending June. Massmart chief executive officer Grant Pattison in a statement said: “Given the current economic environment we are cautious about the year ahead, but are confident in our business model and the South African consumer economy.” The group’s four high-volume, low-cost, low-margin distribution divisions showed a balanced performance. Masswarehouse and Masscash produced strong profit growth whilst Massdiscounters and Massbuild grew profits near their rate of sales growth.


Massmart shows resilience

21 August 2008

South African wholesale and retail chain group Massmart (MSM) on Thursday reported a 14% rise in headline earnings per share to 663c for the 53-week period to June 29 compared with the 52-week period a year ago. A final dividend of 163c was declared – up from 12c a year ago – and brings the total distribution for the year to 386c per share. The group’s sales rose 14% to R39.784bn and trading profit increased 23% to R2.157bn.