|June 2011||% of||June 2010||% of||Year||% sales||% sales|
|Trading profit before interest and tax||2,182.9||4.1||2,027.8||4.3||7.6|| :|| :|
|Masscash||374.8||1.9||469.1||2.7||(20.1)|| :|| :|
|Trading profit before tax||2,331.6||4.4||2,190.9||4.6||6.4|| :|| :|
Trading profit excludes several items. A detailed reconciliation between trading and operating profit can be found below the 'Additional information' table over the page.
Massdiscounters – comprises the 100-store General Merchandise retail discounter Game, which trades in South Africa, Namibia, Botswana, Zambia, Uganda, Mozambique, Mauritius, Malawi, Tanzania, Nigeria and Ghana; and the 13-store Hi-tech retailer DionWired.
Divisional comparable store sales increased by 3.7% with estimated deflation of -7.3%. Total sales increased by 9.6% and trading profit before tax increased by 18.4%. Game SA performed well, with aggressive trading and good cost control. The post-Christmas over-stocked position has been cleared but interest received was adversely affected as a consequence. Game Africa’s sales continued to lag in Rands but are performing better in local currency as the African economies appear to be recovering. DionWired had another spectacular year.
Nine Game stores and two DionWired stores opened, increasing space by 9.1%. The new Gauteng Regional Distribution Centre opened in July 2010 and several small warehouses closed. The Foodco concept was rolled out into four stores during the financial year and in July 2011, it had a successful opening in Game Maputo, Mozambique.
Masswarehouse – comprises the 14-store Makro warehouse club trading in Food, General Merchandise and Liquor in South Africa.
Divisional comparable store sales increased by 6.9% with estimated deflation of -0.4%. Total sales increased by 10.6% and trading profit before tax increased by 8.1%. Despite the costs of a new Makro store, including pre-opening costs of R14.0 million, the Division controlled costs and margin well, delivering a solid result in a low Food inflation environment.
A new Makro store with a full Fresh offering was opened in Vanderbijlpark, and good progress has been made in securing several other sites, with three new stores scheduled to open during the period to December 2011.
Massbuild – comprises 81 stores, trading in DIY, Home Improvement and Builders Hardware, under the Builders Warehouse, Builders Express and Builders Trade Depot brands in South Africa.
Divisional comparable store sales increased by 7.2% with estimated inflation of 0.8%. Total sales increased by 14.2% and trading profit before tax increased by 21.6%.
Builders Warehouse and Builders Express reported very good trading performances, despite residential housing market statistics indicating a declining market. This performance suggests our sales growth is underpinned by market share gains. Builders Trade Depot sales growth was positive but muted as that sector of the building market showed no signs of recovery.
Three Builders Warehouse stores and three Builders Express stores were opened or acquired, and one Builders Trade Depot store was closed, resulting in a net trading space increase of 3.4%.
Masscash – comprises 105 Wholesale and Retail stores, which include the Cambridge brand, trading in South Africa, Lesotho, Namibia, Botswana and Mozambique, and Shield, a voluntary buying association.
Divisional comparable store sales increased by 4.1% with estimated inflation of 2.1%. Total sales increased by 12.7% but trading profit before tax decreased by 21.0%.
The Division suffered from, first, deflation and then low Food inflation. Profits were impacted by low margins, high conversion and investment costs in Retail, and some one-off costs related to the completion of the new IT system implementation in Wholesale. The underlying Wholesale business remains solid with high growth potential. We will be deliberate and patient as we build the new Retail Division.
One new Wholesale Cash and Carry store and seven new Retail Cash and Carry stores were opened or acquired. Net trading space increased by 4.8%.