ONLINE ANNUAL REPORT 2010

GROUP PROFILE


 

MASSMART GROUP

MASSDISCOUNTERS

   

General merchandise discounter

Divisions  
Stores and outlets 288 stores 91 stores 11  stores
Countries SA, Botswana, Ghana, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Nigeria, Swaziland, Tanzania, Uganda, Zambia, Zimbabwe SA, Botswana, Ghana, Malawi, Mauritius, Mozambique, Namibia, Nigeria, Tanzania, Uganda, Zambia SA
Product categories Food/liquor/general merchandise/home improvement supplies General merchandise and FMCG Electrical appliances
Financial highlights and contribution to Group Sales Sales
R47,451.0 million R12,164.9 million
 
Trading profit before tax* Trading profit before tax*
R2,267.5 million R690.3 million
 
Highlights
  • Operating profit before foreign exchange movements grew 0.1% to R2,031.0 million
  • No consumer credit sales
  • 7.6% of sales from African stores
  • Strong performance by Game SA with profi ts up 20%
  • DionWired now a national brand with 11 stores
  • New 70,000m2 Gauteng regional distribution centre operational
  • Level 4 B-BBEE contributor
Key sales drivers
  • Consumer confidence and disposable income
  • New stores
  • Interest rates
  • Social grants
  • Product inflation
  • Product inflation
  • Price perception
  • Interest rates
  • Consumer confidence and disposable income
  • New stores

* Trading profit definitions can be found here

 

MASSMART GROUP

MASSDISCOUNTERS

    General merchandise discounter
Divisions  
2010 trading space (m2) 1,179,466 355,423  
2013 net new stores target 61 31  
2013 net new trading space target (m2) 202,425 101,871  
Medium-term target trading PBT return on sales 5.5%
Target
5.7%
International benchmark
8.0%
Target
7.4%
International benchmark
4.2%
Current
5.7%
Target
Wal-Mart ex-food
Medium-term objectives
  • Maintain trading aggression
  • Organic store growth
  • Explore greenfield opportunities
  • Sustainability
  • Explore acquisitions
  • New Game outlets in South Africa and Africa
  • Develop DionWired
  • Build a supply chain capability
  • Private label
  • Leverage financial services capability
Performance against objectives
  • Despite difficult trading, gained market share in both Massdiscounters and Builders Warehouse
  • Food retail acquisitions and new stores in Masscash
  • Group B-BBEE score of 66.1% up from 55.7%
  • Seven new Game stores in South Africa
  • Five new DionWired stores
  • Johannesburg, Gauteng, RDC opened in June 2010
  • Very successful July 2009 launch of Game credit card with third party financial services provider RCS
Revised medium-term objectives
  •  Maintain trading aggression
  •  Organic store growth
  • Explore greenfield opportunities
  •  Sustainability
  • Explore acquisitions
  •  African expansion
  • New Game stores in South Africa and Africa
  • Private label
  • Finalise switch-over to Gauteng RDC and realise supply chain effi ciencies. Focus on a new KwaZulu-Natal RDC
  • Leverage further benefi ts from RCS relationship
  • New DionWired stores in South Africa
Major potential risk areas noted in the risk register
  • Poor business model or strategic execution
  • Insufficient progress with transformation at executive level
  •  Economic volatility
  •  Acquisition risk
  • Talent retention and succession
  • Customer safety
  •  Financial health and confidence of consumers in South Africa and Africa
  • Supply chain execution
  • African economic volatility and recovery

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