Divisional Operational Review


  52 weeks   53 weeks   52 weeks     52 week  
  to June   to June 53rd week to June   52 week comparable Estimated
  2009 % of 2008 pro forma 2008 % of total % % sales % sales
Rm (Reviewed) sales (Audited) adjustment (Pro forma) sales growth growth inflation
Sales 43 128,7   39 783,6 (825,3) 38 958,3   10,7 8,2 11,4
Massdiscounters 11 206,0   10 406,5 (276,7) 10 129,8   10,6 8,9 6,6
Masswarehouse 11 102,4   10 103,8 (191,8) 9 912,0   12,0 10,0 13,4
Massbuild 5 604,6   5 662,9 (99,9) 5 563,0   0,7 (3,7) 11,4
Masscash 15 215,7   13 610,4 (256,9) 13 353,5   13,9 11,6 14,0
Trading profit before interest and taxation 2 097,5 4,9 2 094,4 (92,0) 2 002,4 5,1 4,7    
Massdiscounters 680,0 6,1 661,8 (33,9) 627,9 6,2 8,3    
Masswarehouse 713,0 6,4 640,3 (24,3) 616,0 6,2 15,7    
Massbuild 222,6 4,0 390,2 (22,2) 368,0 6,6 (39,5)    
Masscash 481,9 3,2 402,1 (11,6) 390,5 2,9 23,4    
Trading profit before taxation 2 348,9 5,4 2 323,9 (97,0) 2 226,9 5,7 5,5    
Massdiscounters 746,6 6,7 720,4 (35,0) 685,4 6,8 8,9    
Masswarehouse 802,6 7,2 730,9 (26,8) 704,1 7,1 14,0    
Massbuild 270,1 4,8 433,1 (23,0) 410,1 7,4 (34,1)    
Masscash 529,6 3,5 439,5 (12,2) 427,3 3,2 23,9    

To make comparisons with the prior financial year meaningful, all current year income statement figures in this announcement are compared to the equivalent figure for the prior year’s 52-week period. To further assist, the income statement shows both the 52-week and 53-week results to June 2008.

Massdiscounters – comprises the 87-store General Merchandise retail discounter Game, which trades in South Africa, Namibia, Botswana, Zambia, Uganda, Mozambique, Mauritius, Malawi, Tanzania, Nigeria, and Ghana; and the six-store Hi-tech retailer Dion Wired.

Divisional comparable store sales increased by 8,9% with estimated inflation of 6,6%. Total sales increased by 10,6% and trading profit increased by 8,9%.

Game South Africa, with its exposure to the middle-income consumer, remained under pressure throughout the year increasing comparable sales by 1,8%. Game Africa’s sales increased 26,9% in local currency and 37,0% in Rands. The recent volatility in the African currencies was unprecedented. Dion Wired continued to perform well and is now positioned to expand nationally.

Investments in efficiency and competitiveness continued, and the new Cape Town Regional Distribution Centre (RDC) which opened in August 2008 is operating successfully.

In October 2008, a new look and feel Game store in Boksburg was unveiled and experienced record-breaking opening sales.

Three Game stores and one Dion Wired store were opened and one Game store was closed, increasing trading space by 1,0% to 341 687m2.

Masswarehouse – comprises the 13-store Makro warehouse club trading in Food, General Merchandise and Liquor in South Africa (and two Zimbabwean stores, not consolidated in the Group results).

Divisional comparable store sales increased by 10,0% with estimated inflation of 13,4%. Total sales increased by 12,0% and trading profit by 14,0%.

Makro traded well throughout the year and, as a result of good margin control and effective cost management, increased its trading profit margin.

No new stores were opened, although solid progress was made in securing future sites in South Africa.

Massbuild – comprises 71 stores, trading in DIY, Home Improvement and Builders Hardware, under the Builders Warehouse, Builders Express and Builders Trade Depot brands in South Africa.

Divisional comparable store sales decreased by 3,7% with estimated inflation of 11,4%. Total sales increased by 0,7% and trading profit decreased by 34,1%.

Sales were under pressure throughout the year, driven by the slump in the residential property market. Those categories associated with home maintenance however, experienced good growth, protecting the Division from the marked decline in residential building activity.

Under new leadership, the Division is well positioned to benefit from the expected recovery in the market.

One Builders Warehouse store, one Builders Express store, four Builders Trade Depot stores were opened or acquired, and two Builders Express stores and one Builders Trade Depot store were closed. Net trading space increased by 3,8% to 357 589m2 (Massbuild’s 2008 year end trading space was adjusted upwards to 344 388m² following accurate re-measurement).

Masscash – comprises 79 Wholesale and Retail Cash and Carry stores trading in South Africa, Lesotho, Namibia and Botswana, and Shield, a voluntary buying association.

Divisional comparable store sales increased by 11,6% with estimated inflation of 14,0%. Adjusting for the change in the BATSA cigarette distribution model in the current year, comparable sales increased to 16,6%. Total sales increased by 13,9% and trading profit increased by 23,9%.

Food inflation peaked in November 2008 and sales growths slowed in sympathy with declining inflation in the latter part of the financial year. The Division completed a number of acquisitions, including 51% of Cambridge Food, and is currently in discussions on several more. At year end the annualised contribution of Retail Cash and Carry reached R2 billion.

No Wholesale Cash and Carry stores were opened, nine Retail Cash and Carry stores were acquired, and one store was sold. Net trading space increased by 9,4%.