Divisional Operational Review


  26 weeks
December
2009
% of 26 weeks
December
2008
% of Period
%
Comparable
% sales
Estimated
% sales
52 weeks
June 2009
% of
Rm (Reviewed) sales (Reviewed) sales growth growth inflation (Audited) sales
Sales 24 153,5   22 758,2   6,1 (0,5) 1,6 43 128,7  
Massdiscounters 6 114,4   6 087,7   0,4 (3,8) 0,5 11 206,0  
Masswarehouse 5 955,7   5 868,1   1,5 1,5 5,1 11 102,4  
Massbuild 3 189,9   2 936,2   8,6 (0,4) 2,7 5 604,6  
Masscash 8 893,5   7 866,2   13,1 0,1 (0,4) 15 215,7  
Trading profit before interest and tax 1 216,1 5,0 1 281,1 5,6 (5,1)     2 097,5 4,9
Massdiscounters 417,6 6,8 479,7 7,9 (12,9)     680,0 6,1
Masswarehouse 371,5 6,2 399,6 6,8 (7,0)     713,0 6,4
Massbuild 151,9 4,8 139,3 4,7 9,0     222,6 4,0
Masscash 275,1 3,1 262,5 3,3 4,8     481,9 3,2
Trading profit before tax 1 283,9 5,3 1 392,0 6,1 (7,8)     2 348,9 5,4
Massdiscounters 434,2 7,1 507,9 8,3 (14,5)     746,6 6,7
Masswarehouse 393,1 6,6 439,1 7,5 (10,5)     802,6 7,2
Massbuild 166,1 5,2 161,9 5,5 2,6     270,1 4,8
Masscash 290,5 3,3 283,1 3,6 2,6     529,6 3,5

Massdiscounters – comprises the 92-store General Merchandise retail discounter Game, which trades in South Africa, Namibia, Botswana, Zambia, Uganda, Moçambique, Mauritius, Malawi, Tanzania, Nigeria, and Ghana; and the 10-store Hi-tech retailer Dion Wired.

Divisional comparable store sales decreased by 3,8% with estimated inflation of 0,5%. Total sales increased by 0,4% and trading profit before tax decreased by 14,5%. The contribution from our Massdiscounters’ African businesses declined by 30,1% in trading profit terms and by 40% including balance sheet translation losses.

It was a very busy period in Massdiscounters, with six Game stores and four Dion Wired stores opening and one Game store closing, increasing space by 5,4%. Construction got underway in earnest on the 70,000m² Regional Distribution Centre in Gauteng and work started on a new store in Malawi.

Game’s performance in South Africa continued to improve with total and comparable sales growing at 6,1% and 2,7% respectively. Game SA grew profits in this period. Sales from Africa declined 25,2% in Rand terms and 5,5% in local currency terms, as products became more expensive due to the weakening of the African currencies and their economies.

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 these Group results).

Divisional total and comparable store sales increased by 1,5% with estimated inflation of 5,1% and trading profit before tax decreased by 10,5%.

No new stores were opened, although construction began on a new Makro store in Vanderbijlpark and good progress is being made in securing three other sites.

Massbuild – comprises 88 outlets, 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 0,4% with estimated inflation of 2,7%. Total sales increased by 8,6% and trading profit before tax increased by 2,6%.

Trading at Builders Warehouse and Builders Express improved throughout the period as a result of improved prices and product offering, consumers looking to maintain their properties, an improved focus on the contractor market, and market share gains as the industry consolidates. Builders Trade Depot’s sales, fully exposed to the lacklustre bonded residential property market, contracted but outperformed its competitors. A Moçambique-based building materials business, Kangela, was acquired during the period but had little effect on the results of Builders Trade Depot or the Group.

One Builders Warehouse store, four Builders Express stores and 15 Builders Trade Depot stores were opened or acquired, and three Builders Trade Depot stores were closed. Net trading space increased by 8,2%.

Masscash – comprises 87 Wholesale and Retail Cash & Carry stores trading in South Africa, Lesotho, Namibia, Botswana and Moçambique, and Shield, a voluntary buying association.

Divisional comparable store sales increased by 0,1% with estimated deflation of 0,4%. Total sales increased by 13,1% and trading profit before tax increased by 2,6%.

The Wholesale Cash & Carry business came under pressure as sales inflation in Food declined below expense inflation and volumes shrank temporarily. Margin and costs were however, well controlled. A high level of activity enhancing the Wholesale Cash & Carry business and building the Retail Cash & Carry business continued, through acquisitions and building a new-store pipeline. We are on track to exceed our R2 billion annualised sales target for this 2010 financial year.

Four new Wholesale Cash & Carry stores and six new Retail Cash & Carry stores were opened or acquired. Net trading space increased by 11,6%.