Overview

National retail sales data confirms that consumers remained under intense pressure throughout the second-half of 2009. However, whilst not spectacular, there was evidence of a slight recovery in consumer spending over the Festive season.

With Group comparable-store sales growth of -0,5%, down in volume terms, management focused on margin, costs and stock control in an effort to protect the income statement as much as possible from the recessionary conditions.

In addition to this operating pressure in South Africa, the economic slow-down in Africa and the relatively stronger Rand resulted in the contribution from our African businesses declining by 26,7% in trading profit terms and by 36,1% including balance sheet translation losses. In local currencies however, the African business performance was acceptable.

Total Group sales increased by 6,1%, operating profit decreased by 15,0%, headline earnings decreased by 19,5% and headline earnings per share decreased by 19,9%.

With the volatility of the Rand across the reporting periods still affecting the interpretation of our performance, management continues to focus on managing operating profit which declined by 5,9% excluding the effects of the foreign exchange balance sheet translation.

It is encouraging that both in our recent monthly comparable-sales trends and in some recent national economic data, it appears that South African consumer spending may be recovering.