Summary consolidated income statement

       
  52 weeks 52 weeks  
  December 2016 December 2015  
Rm (Audited) (Audited) % change
       
Revenue 91,564.9 84,857.4 7.9
Sales 91,250.0 84,731.8 7.7
Cost of sales (73,948.9) (68,689.6) (7.7)
Gross profit 17,301.1 16,042.2 7.8
Other income 216.8 125.6 72.6
Depreciation and amortisation (1,036.5) (946.2) (9.5)
Employment costs (7,346.6) (6,784.3) (8.3)
Occupancy costs (3,133.2) (2,865.6) (9.3)
Other operating costs (3,397.8) (3,245.8) (4.7)
Trading profit before interest and taxation 2,603.8 2,325.9 11.9
Impairment of assets (76.7) (25.7)  
Insurance proceeds on items in PP&E 98.1  
Operating profit before foreign exchange movements and interest 2,625.2 2,300.2 14.1
Net foreign exchange loss (141.8) (149.8) 5.3
Operating profit before interest 2,483.4 2,150.4 15.5
– Finance costs (601.0) (507.7) (18.4)
– Finance income 29.1 32.4 (10.2)
Net finance costs (571.9) (475.3) (20.3)
Profit before taxation 1,911.5 1,675.1 14.1
Taxation (588.9) (505.9) (16.4)
Profit for the year 1,322.6 1,169.2 13.1
       
Profit attributable to:      
– Owners of the parent 1,308.2 1,112.8 17.6
– Non-controlling interests 14.4 56.4 (74.5)
Profit for the year 1,322.6 1,169.2 13.1
       
Basic EPS (cents) 604.7 513.5 17.8
Diluted basic EPS (cents) 594.4 506.1 17.4
Dividend (cents):      
– Interim 74.1 146.0 (49.2)
– Final 224.8 112.2 100.4
– Total 298.9 258.2 15.8

 

The audited consolidated Group Annual Financial Statements for the year ended December 2016 can be found on here

 

 Sales

During a year where the sub-Saharan Africa consumer environment became increasingly challenging, total Group sales for the year to December 2016 increased by 7.7% over the prior year, with a comparable sales growth of 5.4%. Product inflation was estimated at 6.7%, suggesting a real comparable volume decline of 1.3%. Inflation in General Merchandise, Food & Liquor and Home Improvement increased to 5.9%, 7.7% and 4.7% respectively.

Sales split

Our ex-SA businesses represented 8.7% (2015: 8.4%) of total sales and grew by 11.2% in Rands and 13.4% in constant currencies, while comparable sales growth in Rands from these territories was 3.1%.

Inflation

% December
2016
December
2015
Group production 6.7 3.0
General Merchandise 5.9 3.2
Food & Liquor 7.7 3.8
Home Improvement 4.7 2.5


Gross profit

The Group’s gross margin of 19.0% is marginally higher than that of the prior year of 18.9%, mostly driven from business-mix and better category management. Gross profit includes rebates and other forms of income earned from suppliers.

Other income

Included in other income are dividends from unlisted investments and financial services’ income which were not received in the prior year and insurance proceeds on non-property, plant and equipment (PP&E) items, mainly related to the Jumbo Crown Mines fire.

 

Operating expenses were tightly controlled, increasing by 7.7% over the prior year, and great expense control resulted in comparable expense growth of only 5.4%. Pleasingly expenses as a % of sales were held at 16.3%. Growth in employment costs, the Group’s biggest cost category, increased by 8.3%. Occupancy costs increased by 9.3%, mainly due to store openings. Depreciation and amortisation increased by 9.5%. Other operating expenses increased by 4.7%. The non-capital costs of upgrading our IT infrastructure, as well as pre-opening store expenses are included in this expense category.

Earnings before interest, tax, depreciation and amortisation (EBITDA) of R3.6 billion increased by 15.2% over the prior year.

Jumbo Crown Mines impairment and insurance proceeds

Included in operating profit is the net insurance gain of R45.0 million arising from the excess of the insured replacement value over the net book value of the assets destroyed by the fire at the Jumbo Crown Mines store in February 2016.

Foreign exchange loss

Net realised and unrealised foreign exchange losses of R141.8 million (2015: loss of R149.8 million) are also included in operating profit. African currencies have been particularly volatile and mostly weaker during the year. We have been actively managing the value and currency of our foreign-denominated balances and we take out foreign exchange contracts on select exposures. All foreign-denominated inventory orders are automatically covered forward.

Finance costs

Net finance costs have grown to R571.9 million (2015: R475.3 million), mainly aggravated by two interest rate increases during 2016.

Taxation

The Group’s effective tax rate of 30.8% is in line with expectation (2015: 30.2%). Massmart is not concerned about any specific element of historical tax risk in the Group, but there remains the uncertainty that adjustments could arise from potentially unfavourable tax assessments of previous tax returns. Management believes that the final outcomes of any such matters will not have a material adverse effect on the Group’s financial position.

     
  52 weeks 52 weeks
  December 2016 December 2015
% (Audited) (Audited)
Standard tax rate 28.0 28.0
Non-taxable income and disallowable expenses 2.9 1.0
Assessed loss not utilised 2.7 2.6
Other – including foreign tax adjustments (2.8) (1.4)
Group tax rate 30.8 30.2
 

 

 

Headline earnings

  52 weeks 52 weeks  
  December 2016 December 2015  
Rm (Audited) (Audited) % change
Reconciliation of profit for the year to headline earnings      
Profit for the year attributable to owners of the parent 1,308.2 1,112.8 17.6
Impairment of assets 76.7 25.7  
Loss on disposal of tangible and intangible assets 6.7 2.3  
Profit on sale of non-current assets classified as held for sale (5.2)  
Compensation from 3rd parties for items of tangible assets that were impaired, lost or given up (98.1) (1.2)  
Foreign currency translation reserve re-classified to the Income Statement (12.7)  
Total tax effects of adjustments (0.2) (2.9)  
Headline earnings 1,293.3 1,118.8 15.6
Foreign exchange loss after taxation 95.3 111.0  
Headline earnings before foreign exchange (taxed) 1,388.6 1,229.8 12.9
       
Headline EPS (cents) 597.8 516.3 15.8
Headline EPS before foreign exchange (taxed) (cents) 641.8 567.5 13.1
Diluted headline EPS (cents) 587.6 508.8 15.5
Diluted headline EPS before foreign exchange (taxed) (cents) 630.9 559.3 12.8
 

 

 

Summary consolidated statement of comprehensive income

       
  52 weeks 52 weeks  
  December 2016 December 2015  
Rm (Audited) (Audited) % change
Profit for the year 1,322.6 1,169.2 13.1
Items that will not subsequently be re-classified to the Income Statement: 3.6 5.0  
Net post retirement medical aid actuarial profit 3.6 5.0  
Items that will subsequently be re-classified to the Income Statement: (368.2) (21.2)  
Foreign currency translation reserve (376.9) (24.2)  
Cash flow hedges – effective portion of changes in fair value (23.2) 4.4  
Fair value movement on available-for-sale financial assets (3.5)  
Income tax relating to components of other comprehensive income 31.9 2.1  
Total other comprehensive loss for the year, net of tax (364.6) (16.2)  
Total comprehensive income for the year 958.0 1,153.0 (16.9)
Total comprehensive income attributable to:      
– Owners of the parent 943.6 1,096.6  
– Non-controlling interests 14.4 56.4  
Total comprehensive income for the year 958.0 1,153.0 (16.9)

 

 

Summary consolidated statement of financial position

       
  December 2016 December 2015 %
Rm (Audited) (Audited) change
ASSETS      
Non-current assets 12,517.6 12,031.2  
Property, plant and equipment 8,470.2 8,117.8 4.3
Goodwill and other intangible assets 3,159.0 2,999.1 5.3
Investments and other financial assets 164.2 165.1  
Deferred taxation 724.2 749.2  
Current assets 19,348.3 18,687.6  
Inventories 11,803.0 11,934.5 (1.1)
Trade, other receivables and prepayments 4,684.7 4,697.4 (0.3)
Taxation 58.3 50.8  
Cash on hand and bank balances 2,802.3 2,004.9 39.8
Non-current assets classified as held for sale 17.7 11.5  
Total assets 31,883.6 30,730.3  
       
EQUITY AND LIABILITIES      
Total equity 6,183.7 5,791.1  
Equity attributable to owners of the parent 6,108.1 5,636.0 8.4
Non-controlling interests 75.6 155.1  
Non-current liabilities 4,722.4 3,053.4  
Interest-bearing borrowings 3,301.9 1,819.6 81.5
Deferred taxation 73.9 73.5  
Other non-current liabilities and provisions 1,346.6 1,160.3  
Current liabilities 20,977.5 21,885.8  
Trade, other payables and provisions 19,634.0 20,077.7 (2.2)
Taxation 138.4 155.6  
Bank overdrafts 180.6 446.4  
Interest-bearing borrowings 1,024.5 1,206.1  
       
Total equity and liabilities 31,883.6 30,730.3  

 

Property, plant and equipment and other intangible assets

During the past few years, investment spending has been focused on new IT infrastructure, store openings, and the refurbishment of existing stores. The net book value of property, plant and equipment increased by 4.3% over the prior year.

Deferred taxation

The deferred tax asset includes the operating lease liability arising from lease smoothing and unutilised assessed losses. This net asset will reduce over time as the associated tax benefits are utilised. The net deferred tax asset decreased from R675.7 million at December 2015 to R650.3 million at December 2016.

Inventories

Improved inventory management saw our Inventory balance decrease by 1.1% compared to December 2015, with inventory days reducing by five days to 58 days, despite store openings.

Trade, other receivables and prepayments

Trade and other receivables were in line with 2015 and debtors’ days stayed flat, at nine days.

Capital management and shareholder returns

Interest-bearing borrowings increased by R1 billion, the Group’s average borrowings only increased by R208 million against average borrowings in 2015. During the year, a R2.0 billion facility was entered into and was offset by the settlement of older term loans, the settlement of overdrafts of R265.8 million and a working capital outflow of R263.0 million due to year-end being on Christmas weekend.

The Group’s gearing ratio (debt:equity) increased to 62.6% (2015: 54.6%) at the end of the current year. Return on average shareholders equity for the year improved to 22.0% (2015: 20.4%).

Provisions and other liabilities

The largest non-interest-bearing liability is the net operating lease liability of R1.3 billion (2015: R1.0 million) arising from the lease smoothing adjustment which will be reversed over the remaining period of the Group’s operating leases. The increase in the operating lease liability primarily relates to the roll-out of new stores during the current year.

At year-end, the actuarial valuation of the Group’s potential unfunded liability arising from post-retirement medical aid contributions owed to current and future retirees amounted to R111.7 million (2015: R104.2 million), R6.0 million of which has been reflected as a current provision.

At the end of the current year, the Group’s onerous lease provision decreased from R33.8 million to R22.9 million.

Trade, other payables and provisions

Creditors’ days decreased from 76 days to 70 days partly due to the lower inventory levels but also from the early settlement of some foreign-denominated creditor balances as part of our foreign exchange risk management strategy.

The Supplier Development Programme, a separate fund created in response to the judgement of the Competition Appeal Court at the time of the Walmart transaction, had a closing balance of R72.2 million (2015: R111.6 million) and is reported on annually to the Competition Tribunal highlighting our expenditure and achievements.

Lease exclusivity and contingent liabilities

During 2016 there were several developments regarding lease exclusivities. These lease exclusivities are legal arrangements contained within certain shopping centre lease agreements that appear to entrench the incumbent major food supermarkets in certain localities within South Africa. In 2014 Massmart formally requested the Competition Commission to investigate these market practices and in mid-2015 self-referred this complaint to the Competition Tribunal. In November 2016 the Constitutional Court handed down judgement in which Game won the right to operate as a supermarket that sells Food at the Cape Gate shopping centre. This ruling gives momentum to our Food business as it allows for free and fair trade in this space.

In addition to this matter, the Group and our subsidiaries are party to a variety of legal, administrative, regulatory and government proceedings, claims and inquiries arising in the normal course of business. While the results of these proceedings, claims and inquiries cannot be predicted with certainty, management believes that the final outcome of the foregoing will not have a material adverse effect on the Group’s financial position.

Commitments

     
  52 weeks 52 weeks
  December 2016 December 2015
Rm (Audited) (Audited)
Commitments in respect of capital expenditure approved by Directors:    
Contracted for 612.0 953.4
Not contracted for 1,147.8 1,033.9
  1,759.8 1,987.3

 

Massmart has the right of first refusal on the sale of any shares by the non-controlling interest holders in various Masscash stores. Historically Massmart has exercised this right. All capital commitments will be funded using current facilities.

 

Group cash flow analysis

Working capital movements

The working capital outflow is largely as a result of timing differences. The cash inflows obtained from inventory and trade receivables in the current period are comparable to those in the prior period, however the cash outflow on trade creditors in the current period exceeds that of the prior period comparative due to the significantly large trade creditor balance at the end of December 2015 (10% higher than that at December 2014). In addition, the early settlement of foreign denominated creditors, to limit potential currency exposure, contributed to this position.

Dividend paid

In August 2015 Massmart indicated to shareholders that the Group’s future dividend policy would likely be changed to levels similar to South African retail peers. This adjustment was necessary as a result of significant property acquisitions between 2012 and 2015 and store growth into Africa which increasingly entail investing in real estate. Therefore, with effect from that dividend cycle, the dividend cover was amended to 2.00 x cover.

A gross final cash dividend of 224.80 cents per share (December 2015: 112.16), in respect of the year ended December 2016 was declared out of income reserves as defined in the Income Tax Act, 1962, and will be subject to the South African dividend withholding tax (DWT) rate of 20%. This was distributed to shareholders registered in the books of the Company on 20 March 2017.

 

Capital expenditure

The total capital expenditure of R1.8 billion comprises: R0.8 billion on replacement expenditure including store refurbishments and our IT systems’ investments; and R1.0 billion on expansionary expenditure.

     
  December 2016 December 2015
Rm (Audited) (Audited)
Land and buildings/leasehold improvements 393.3 281.8
Motor vehicles 31.0 14.3
Fixtures, fittings, plant and equipment 443.3 353.6
Computer hardware 56.8 31.4
Computer software 29.4 29.6
Investment to expand operations 953.7 710.7
     
Land and buildings/leasehold improvements 123.8 134.7
Vehicles 43.0 64.7
Fixtures, fittings, plant and equipment 300.7 586.3
Computer hardware 157.5 105
Computer software 201.5 92.8
Other 0.2 0.2
Investment to maintain operations 826.7 983.7

 

Summary consolidated statement of changes in equity

                           
Rm Share capital   Share premium   Other reserves   Retained profit   Equity attributable to owners of the parent   Non-controlling interests   Total
Balance as at December 2014 (Audited) 2.2   733.4   550.5   4,048.3   5,334.4   192.8   5,527.2
Dividends declared       (914.1)   (914.1)   (52.7)   (966.8)
Total comprehensive income     (16.2)   1,112.8   1,096.6   56.4   1,153.0
Changes in non-controlling interests     (18.7)     (18.7)   (41.4)   (60.1)
IFRS 2 charge and Share Trust transactions     218.5   (23.6)   194.9     194.9
Treasury shares acquired   (58.3)   1.2     (57.1)     (57.1)
Balance as at December 2015 (Audited) 2.2   675.1   735.3   4,223.4   5,636.0   155.1   5,791.1
Dividends declared       (404.4)   (404.4)   (48.5)   (452.9)
Total comprehensive income     (364.6)   1,308.2   943.6   14.4   958.0
Changes in non-controlling interests     (132.3)     (132.3)   (45.4)   (177.7)
IFRS 2 charge and Share Trust transactions     198.5   (28.1)   170.4     170.4
Treasury shares acquired   (106.1)   0.9     (105.2)     (105.2)
                           
Year ended December 2016 (Audited) 2.2   569.0   437.8   5,099.1   6,108.1   75.6   6,183.7

 

 

Segmental review

The Group is organised into four Divisions for operational and management purposes, being Massdiscounters, Masswarehouse, Massbuild and Masscash. Massmart reports its operating segment information on this basis. The principal offering for each Division is as follows:

  • Massdiscounters (MDD) – General Merchandise discounter and Food retailer
  • Masswarehouse (MWH) – warehouse club trading in Food, General Merchandise and Liquor
  • Massbuild (MB) – Home Improvement retailer and Building Materials supplier
  • Masscash (MC) – Food wholesaler, retailer and buying association

No single customer represented more than 10% of any of one of the Divisions’ revenue in the current and prior financial year.

 

Geographic segment

The Group’s four Divisions operate in two principal geographical areas – South Africa and the rest of Africa.

                         
    December 2016   December 2015
    52 weeks   52 weeks
    Total   South Africa   Rest of Africa   Total   South Africa   Rest of Africa
Sales   91,250.0   83,292.9   7,957.1   84,731.8   77,579.2   7,152.6
Operating profit before interest and tax   2,483.4   1,824.8   658.6   2,150.4   1,495.8   654.6
Segment assets (Total)   23,735.8   22,746.2   989.6   23,387.8   21,541.2   1,846.6
Segment assets (Non-current)   11,629.2   10,895.0   734.2   11,128.4   10,118.7   1,009.7
Net capital expenditure   1,770.8   1,624.0   146.8   1,649.6   1,366.1   283.5


Segment assets excludes financial instruments and deferred taxation and reflects the geographic location of the Group’s assets

 

 

Business segment

                         
Rm   Total   Other   Massdiscounters   Masswarehouse   Massbuild   Masscash
December 2016                        
Sales   91,250.0     20,544.5   26,270.3   12,687.1   31,748.1
Operating profit before foreign exchange movements and interest   2,625.2   45.2   345.5   1,251.3   712.6   270.6
Trading profit before interest and taxation   2,612.9     364.3   1,251.3   712.6   284.7
Net foreign exchange loss   (141.8)   (61.4)   (10.1)     (77.6)   7.3
Net finance (costs)/income   (571.9)   (337.3)   (74.0)   60.6   (157.7)   (63.5)
Operating profit/(loss) before taxation   1,911.5   (353.5)   261.4   1,311.9   477.3   214.4
Trading profit/(loss) before taxation   2,041.0   (337.3)   290.3   1,311.9   554.9   221.2
                         
Inventory   11,803.0   2.3   3,869.2   2,942.3   2,000.9   2,988.3
Total assets   31,883.6   1,032.8   8,320.4   8,515.5   4,918.8   9,096.1
Non-current asset held for sale   17.7   10.6         7.1
Total liabilities   25,699.9   (3,461.8)   8,469.5   7,105.8   4,592.8   8,993.6
                         
Net capital expenditure   1,770.8   278.3   529.3   386.2   188.2   388.8
Depreciation and amortisation   1,036.5   73.1   330.2   204.1   216.0   213.1
Impairment losses   76.7   43.8   18.8       14.1
Non-cash items other than depreciation and impairment   438.5   132.8   196.6   30.0   (9.4)   88.5
                         
Cash flow from operating activities   2,255.5   (77.3)   757.8   1,186.5   (51.2)   439.7
Cash flow from investing activities   (1,774.9)   (275.2)   (529.3)   (393.5)   (188.2)   (388.7)
Cash flow from financing activities   959.5   1,941.2   (35.1)   (805.6)   55.6   (196.6)
                         
Inventory days   58.3     93.5   48.7   80.8   38.4
Number of stores   412     165   20   104   123
Trading area (m2)   1,568,744     545,094   217,907   449,212   356,531
Trading area (m2) increase on December 2015   1.2%     2.3%   11.3%   0.0%   (4.3%)
Average trading area per store (m2)   3,808     3,304   10,895   4,319   2,899
Distribution centre space (m2)   337,097     160,071   67,847   60,235   48,944
Distribution centre space (m2) increase/(decrease) on December 2015   (2.8%)     (10.3%)   16.0%   0.0%   (1.0%)
                         
                         
Rm   Total   Other   Massdiscounters   Masswarehouse   Massbuild   Masscash
December 2015                      
Sales   84,731.8     19,514.1   23,675.9   12,010.6   29,531.2
Operating profit before foreign exchange movements and interest   2,300.2   (39.8)   235.4   1,198.7   693.6   212.3
Trading profit before interest and taxation   2,349.7     235.4   1,198.7   693.6   222.0
Net foreign exchange (loss)/ gain   (149.8)   (78.1)   (65.4)     (3.4)   (2.9)
Net finance (costs)/income   (475.3)   (292.6)   (49.5)   53.0   (100.7)   (85.5)
Operating profit before taxation   1,675.1   (410.5)   120.5   1,251.7   589.5   123.9
Trading profit before taxation   1,874.4   (292.6)   185.9   1,251.7   592.9   136.5
                         
Inventory   11,934.5   22.1   4,064.7   3,095.7   1,865.3   2,886.7
Total assets   30,730.3   (626.7)   8,234.5   8,314.0   5,122.1   9,686.4
Non-current asset held for sale   11.5   11.5        
Total liabilities   24,939.2   (4,608.9)   7,999.0   7,865.3   4,602.8   9,081.0
                         
Net capital expenditure   1,649.6   186.8   527.4   234.4   351.6   349.4
Depreciation and amortisation   946.2   62.0   336.0   169.5   184.8   193.9
Impairment losses   25.7   16.0         9.7
Non-cash items other than depreciation and impairment   316.6   101.7   133.0   39.7   6.6   35.6
                         
Cash flow from operating activities   1,770.4   450.6   276.1   259.0   1,095.1   (310.4)
Cash flow from investing activities   (1,645.6)   (183.2)   (527.2)   (234.4)   (351.6)   (349.2)
Cash flow from financing activities   (25.5)   (60.9)   166.2   (71.5)   (712.0)   652.7
                         
Inventory days   63.4     102.3   57.2   80.0   39.6
Number of stores   403     161   19   102   121
Trading area (m2)   1,550,719     533,078   195,794   449,133   372,714
Trading area (m2) increase on December 2013 (excluding re-measurements)   0.7%     5.3%     2.9%   (7.0%)
Average trading area per store (m2)   3,848     3,311   10,305   4,403   3,080
Distribution centre space (m2)   346,660     178,488   58,475   60,235   49,462
Distribution centre space (m2) increase on December 2013   5.6%       14%   (2.4%)   34.9%
                         
                         
  • The other column includes consolidation entries.
  • All intercompany transactions have been eliminated in the above results.
  • Trading profit before taxation is earnings before corporate net interest, asset impairments, BEE transaction IFRS 2 charges and foreign exchange movements.
  • Net capital expenditure is defined as capital expenditure less disposal proceeds.

 

Related-party transactions

Massmart and its Divisions enter into certain transactions with related parties in the normal course of business. Details of these are disclosed in more detail in Massmart’s Annual Financial Statements. Of the Walmart integration and related costs, an amount due to Walmart of R1.0 million (December 2015: R299.4 million) remains unpaid at the end of the current financial year. There are no amounts due from Walmart at the end of the current financial year (December 2015: R6.7 million). The Group has a R600.0 million medium-term loan with Walmart repayable in one instalment in April 2018, on which interest of 7.5% is paid quarterly. This loan is accounted for under interest-bearing non-current liabilities. As a 52.4% shareholder, Main Street 830 Proprietary Limited, a subsidiary of Walmart, will also be receiving the ordinary dividend based on their number of shares held.

Directors’ emoluments

A detailed breakdown can be found in the Remuneration Report.

Accounting policies, critical judgements and key sources of estimation uncertainty

I have supervised the preparation of these audited summary consolidated results which have been prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS), its interpretations issued by the IFRS Interpretations Committee, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council, presentation and disclosure as required by International Accounting Standard (IAS) 34 Interim Financial Reporting, the JSE Limited Listings Requirements and the requirements of the Companies Act 71 of 2008 of South Africa. The accounting policies and methods of computation used in the preparation of these audited summary consolidated results are in terms of IFRS and are consistent in all material respects with those applied in the most recent Annual Financial Statements, as none of the amendments coming into effect in the current financial year have had a material impact on the financial reporting of the Group, besides impacting disclosure within the Annual Financial Statements.

Going concern assertion

The Board has formally considered the going concern assertion for Massmart and its subsidiaries and believes that it is appropriate for the forthcoming financial year.

The year ahead

This Integrated Annual Report was finalised a day after the announcement of several changes to key roles in the South African Cabinet. This development may increase policy uncertainty in South Africa, potentially with negative consequences for the economy, and thus it is extremely difficult to currently provide any useful short- to medium-term economic or performance outlook.

Appreciation

2016 was a challenging year, marked by volatility in our operating environment. However, through the dedication of our people we were able to meet these challenges head-on, producing the good results that we did. This year our finance team continued to grow, we welcomed new talent to the team and were delighted with the internal promotions we made. Our processes and controls have been streamlined through the application of new technology, and as a consequence we are better able to more innovatively serve the business.

We have embarked on the implementation of King IV principles as we continually strive to deliver an excellent Integrated Annual Report; this has been achieved through the collaboration of our finance teams at Massmart’s corporate office and across our Divisions.

I feel proud and privileged to have the opportunity to work with such an excellent team. The contribution and efforts of the Group Finance teams, both at the Divisions and the corporate office, have once again been outstanding. I want to express my gratitude for their ways of working together as a team and putting business performance, as well as personal and collective development, at the same level. The result of this is fully to their benefit and to the advantage of all of our stakeholders.

 

Johannes van Lierop

Chief Financial Officer

31 March 2017