The South African consumer economy appears to have emerged in early 2010 from the recession that dominated 2009. This is confirmed by our second-half results, being the six months to June 2010, where the Group increased sales by 14.4%, operating profit before foreign exchange losses by 9.7% and headline earnings by 29.0%.

The Group’s full-year financial performance, however, bears the scars of the challenging first half with sales increasing by 10.0%, operating profit before foreign exchange losses increasing by 0.1% and headline earnings decreasing by 5.7%.

With Group comparable-store sales growth of 2.6% and product deflation of 0.4%, we saw volume growth across all categories. With this level of comparable sales growth however, it was critical that we closely managed expenses and so comparable expenses increased by only 2.8% for the year.

The large difference between total sales growth of 10.0% and comparable sales growth is indicative of the Group’s continued investment in growth with store space increasing by 8.5%, of which 3.1% is in new stores and 5.4% through acquisition.

In addition to the investment in growth, excellent control of expenses, margin and stock protected the income statement, enabling us to grow operating profit before foreign exchange losses by 0.1%.

After adjusting for foreign exchange losses operating profit reduced by 4.3%.

Independent data sources indicate the Group has been trading well relative to our competitors in all major categories and has gained market share, particularly in large ticket items such as Multimedia, Technology and Appliances.