Online Annual Report 2009

Group profile


 

Massmart Group

Massdiscounters
    General merchandise discounter
Chains        
     
Stores and outlets 256 stores   87 stores 6 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
         
  Sales
R43,128.7m		   Sales
R11,206.0m
  
  Trading profit
*R2,348.9m		   Trading profit
R746.6m
  
         
Highlights*
  • Two Divisions held net trading margins
  • No consumer credit sales
  • 9% of sales from African stores
  • Headline earnings before foreign exchange movements grew 3.8% to R1,263.5 million**
  
  • Sales exceed R11.2 billion
  • Completed the Western Cape Regional Distribution Centre (RDC)
  • Game’s new look-and-feel successfully piloted at our Boksburg store
  • Good growth in Africa
         
         
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.
**   52-week percentage change.


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Massmart Group

Massdiscounters
    General merchandise discounter
         
     
2009 trading space (m2) 1,087,459   341,687  
         
2012 net new stores target 62   20  
         
2012 net new trading space target (m2) 171,620   50,022  
         
Medium-term target PBT
return on sales 		5.5%
Target		 5.7%
International
benchmark		   8.0%
Target		 7.4%
International
benchmark
Wal-mart ex-food		 
4.4%
current		   6.7%
current		    
         
         
Medium-term objectives
  • Maintain trading aggression
  • Organic store growth
  • Explore greenfields opportunities
  • Sustainability
  • Explore acquisitions
 
  • New Game outlets in South Africa and Africa
  • Grow Dion Wired
  • Build supply chain capability
  • Private label
  • Leverage financial services capability
         
Performance against objectives
  • Despite tough environment, held trading margins in two Divisions
  • Acquisitions in Masscash
  • Group BBBEE score of 55.7% up from 49.4%
  
  • Three new Game stores in South Africa
  • One new Dion Wired store
  • Western Cape RDC opened in August 2008
  • Sold Consumer Credit division in July 2008
       
Revised medium-term objectives
  • Maintain trading aggression
  • Organic store growth
  • Explore greenfields opportunities
  • Sustainability
  • Explore acquisitions
  
  • New Game stores in South Africa and Africa
  • Private label
  • Complete Gauteng RDC and realise supply chain efficiencies
  • Extract benefits from RCS relationship/Consumer Credit division
       
Major potential risk areas
  • Poor business model or strategic execution
  • Insufficient progress with transformation at executive level
  • Economic volatility
  • Talent retention and succession
  • Consumer safety
  
  • Financial health and confidence of consumers
  • Private label
  • Supply chain execution
  • Fraud, security and crime
  • African economic volatility


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