Financial
resultsMasswarehouse
Masswarehouse Brands
Masswarehouse, the founding entity of Massmart, operates 14 massive warehouse stores branded as Makro. These are situated in the large metropolitan centres in South Africa selling food, liquor and general merchandise to retail and wholesale customers. This big-box warehouse club format with our no-frills approach keeps costs down and provides the platform for our high-volume, low-margin sales offering of quality branded merchandise.
Masswarehouse Fast Facts
- New Vaal Store
- Merchandise proposition: an extensive range of food, liquor and general merchandise including appliances, sports, outdoor, DIY, and home entertainment.
- Masswarehouse Brand: Makro
- Number of stores: 14 stores
- Target market: Liquor and general merchandise (LSM 6-10) and food (LSM 2-6)
- Divisional comparable store sales: 6.9% with estimated inflation of 0.4%
- Total 52 week sales: 12,722.9m
- 2011 trading profit (before tax): R803.2m
- Comparable sales growth: 10.6%
- 2011 Trading Area: 128 417 m2
- Average Trading Area per store: 9 173m2
- Geographic presence: South Africa
- Number of employees: 2 877
Makro's Value Proposition
Makro’s offerings are tailor-made to fit a variety of customer needs across all our merchandising categories.
Our food offering caters to wholesale shoppers ranging from informal traders and grocery store owners to hoteliers, restaurateurs, offices and schools. Wholesale customers account for up to 80% of Makro’s food sales and most shop during the week for the convenience of our wide range of good value, quality consumables. At weekends, our focus shifts to promoting good buys for retail food and grocery shoppers who can achieve substantial savings on their monthly household basket compared to other mass retail outlets.
Our liquor offering also caters to both the retail and wholesale customer. Our liquor outlets, immediately adjacent to our main outlet, continue to increase their range of premium brands, especially in wine and whisky. These products are sold at a low margin to maintain and grow our share of the market. At the same time we have maintained a strong presence in beer and budget brands for liquor wholesalers looking for good value.
Financial Performance (June 2011)
| 2011 | 2010 | 2009 | ||
| 52 week | 52 week | 52 week | ||
| Sales | Rm | 12,722.9 | 11,501.2 | 11,102.4 |
|---|---|---|---|---|
| Trading profit before interest3 | Rm | 749.0 | 685.4 | 713.0 |
| Trading profit before interest as % sales | % | 5.9 | 6.0 | 6.4 |
| Net finance income | Rm | 54.2 | 57.8 | 89.6 |
| Trading profit before taxation3 | Rm | 803.2 | 743.2 | 802.6 |
| Trading profit before taxation as % sales | % | 6.3 | 6.5 | 7.2 |
| Operating profit before taxation | Rm | 780.5 | 738.5 | 808.2 |
| Operating profit before taxation as % sales | % | 6.1 | 6.4 | 7.3 |
| Inventories | Rm | 1,239.2 | 1,161.0 | 1,159.2 |
| Inventory days | days | 42 | 44 | 45 |
| Net capital expenditure1 | Rm | 188.4 | 77.3 | 102.3 |
| Cash flow from operating activities | Rm | (7.3) | 246.3 | 145.5 |
| Number of stores | 14 | 13 | 13 | |
| Trading area | m2 | 128,417 | 118,208 | 117,859 |
| Average trading area per store | m2 | 9,173 | 9,093 | 9,066 |
| Number of employees | 2,877 | 2,644 | 2,805 | |
| Sales per store | R000 | 908,779 | 884,708 | 854,031 |
| Sales per m2 | R000 | 99 | 97 | 94 |
| Sales per employee | R000 | 4,422 | 4,350 | 3,958 |
| 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. | The above results exclude Makro Zimbabwe. Details can be found in note 8. |
| 5. | Definitions/explanations to the ratios and terms above can be found here. |
Sustainability Performance (June 2011)
- Value added: R 3,353.7m
- Customer satisfaction: 89.8%
- Tested HIV/AIDS prevalence: 1.9%
- Black professionals as a percentage of management professionals: 68%
- Our B-BBEE score: 75.1%
- Our purchased electricity emissions intensity: 378.5 CO2e(kg)/m2
- Corporate social investment as a percentage of PAT: 1%
