Financial
resultsMassdiscounters
Massdiscounters Brands
Massmart bought Dion in 1993 and Game in 1998, merging them a year later. At that time, both operated similar, competing formats and the decision was taken to close or convert all Dion stores to Game where this was facilitated by impending store lease terminations. A core of ten Dion stores was retained in Gauteng until those leases came up for renewal, and in 2008 all these stores were closed or converted to Game.
Massdiscounters operates two retail formats: Game and DionWired. Game is a discount retailer of general merchandise FMCG, and non-perishable groceries for home, leisure and business use, operating throughout South Africa and in 13 major cities in sub-Saharan Africa. DionWired is a South African electronics and appliances speciality store catering for the middle- to upper-end income consumer. During the past financial year we opened nine new Game stores, bringing its footprint to 100 stores and opened two new DionWired stores taking the total number of DionWired stores to 13.
Massdiscounters Fast Facts
- 70 000m2 Gauteng Regional Distribution Centre operational
- Merchandise proposition: wide range of general merchandise, electrical appliances and non-perishable groceries
- Massdiscounters Brands: Game and DionWired
- Number of stores: DionWired increased to 13 stores, Game has 100 stores
- Four Game stores now also provide a food offering under the Foodco sub-brand and this will be rolled out at the rate of about 15 stores annually.
- Target Market: Game: General merchandise and FMCG (LSM 5 -10) and General Merchandise: (LSM 8 – 10)
- Divisional comparable sales growth: 3.7% with estimated inflation of 7.3%
- Total 52 week sales: R13,332.5m
- 2011 trading profit (before tax): R782m
- Comparable sales growth: 10.9%
- 2011 trading area (m2): 387 594m2
- Average trading area per store: 3 430m2
- Game geographic presence: South Africa, Botswana, Ghana, Malawi, Mauritius, Mozambique, Namibia, Nigeria, Tanzania, Uganda and Zambia
- DionWired geographic presence: South Africa
- Number of employees: 8 445
Game Value Proposition
At Game our positioning offers customers the widest range of branded products, at the best price, for a given set of product specifications. Customers are presented with a wide range to choose from and are assured of the best value product for that price. The Game business model is promotionally driven, with more than four million of our weekly promotional leaflets distributed each week. During this financial year, we continued to take large positions on selected products and through working closely with our suppliers, were able to offer our customers well-priced products representing great value.
DionWired Proposition
The DionWired slogan is 'Experience the Future'. Our product displays create an easy, interesting and interactive shopping experience in the latest home entertainment, computing, video and digital photographic equipment and appliances. DionWired sells complete technological solutions, demonstrating in-store the interconnectivity of the latest innovations and products. The IT experts manning our in-store service centre, the 'Propeller Heads', are on hand to offer the best advice and onsite repairs and services.
Although our products are well-priced, DionWired is not a discounter. Our main proposition is to offer the widest range in South Africa of some of the world's biggest upmarket brands, such as Apple, Smeg, Miele, Marantz, Jamo and Onkyo to the South African middle- and higher-end consumer.
The concept has proven to be exceptionally successful and we are about to establish a national footprint
Financial Performance (June 2011)
| 2011 | 2010 | 2009 | ||
| 52 week | 52 week | 52 week | ||
| Sales | Rm | 13,332.5 | 12,164.9 | 11,206.0 |
|---|---|---|---|---|
| Trading profit before interest3 | Rm | 744.0 | 612.8 | 680.0 |
| Trading profit before interest as % sales | % | 5.6 | 5.0 | 6.1 |
| Net finance income | Rm | 38.0 | 47.6 | 66.6 |
| Trading profit before taxation3 | Rm | 782.0 | 660.4 | 746.6 |
| Trading profit before taxation as % sales | % | 5.9 | 5.4 | 6.7 |
| Operating profit before taxation | Rm | 749.7 | 586.9 | 651.0 |
| Operating profit before taxation as % sales | % | 5.6 | 4.8 | 5.8 |
| Inventories | Rm | 2,283.8 | 2,134.7 | 1,856.0 |
| Inventory days | days | 84 | 85 | 81 |
| Net capital expenditure1 | Rm | 336.3 | 285.1 | 212.2 |
| Cash flow from operating activities | Rm | 81.6 | 290.6 | 110.5 |
| Number of stores | 113 | 102 | 93 | |
| Trading area | m2 | 387,594 | 355,423 | 341,687 |
| Average trading area per store | m2 | 3,430 | 3,485 | 3,674 |
| Number of employees | 8,445 | 8,876 | 9,469 | |
| Sales per store | R000 | 117,987 | 119,264 | 120,495 |
| Sales per m2 | R000 | 34 | 34 | 33 |
| Sales per employee | R000 | 1,579 | 1,371 | 1,183 |
| 1. | Net capital expenditure is defined as capital expenditure less disposal proceeds. |
| 2. | The ratios have been calculated using year-end balance sheet figures. |
| 3. | Trading profit is earnings before asset impairments, BEE transaction IFRS 2 charges and foreign exchange movements. |
| 4. | Definitions/explanations to the ratios and terms above can be found here. |
Sustainability Performance (June 2011)
- Value added: R3,852.4m
- Customer satisfaction: 84.4%
- Tested HIV/AIDS prevalence: 4.1%
- Black professionals as a percentage of management professionals: 87.9%
- Our B-BBEE score: 80.9%
- Our purchased electricity emissions intensity: 263.8 CO2e(kg)/m2
- Corporate social investment as a percentage of PAT: 2%
