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2020/08/20, 12:46:00
Johannesburg Stock Exchange - SENS NEWS DELAYED
Sales  Update and Trading Statement for the 26 weeks ended 28 June 2020

Massmart Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration Number: 1940/014066/06)
Share code: MSM
ISIN: ZAE000152617
(‘Massmart’ or ‘the Company’)

SALES UPDATE AND TRADING STATEMENT FOR THE 26 WEEKS ENDED 28 JUNE 2020

Shareholders are referred to the SENS announcement issued on 17 June 2020, which provided an update
on sales for the 23 week period ended 7 June 2020 and the impact of the Covid-19 national lockdown on
the Massmart Group.

SALES UPDATE

June 2020 marked an improvement in sales in comparison to sales in prior months during the national level
5 and 4 Covid-19 lockdown periods. Liquor, General Merchandise and Home Improvement sales benefitted
from pent-up consumer demand, resulting in total sales for June increasing by 0.8% compared to the same
period last year.

For the 26-week period ended 28 June 2020, Massmart’s total sales amounted to R39.6 billion,
representing a decrease of 9.7% on the same period last year, with comparable store sales decreasing by
the same level. Internal product inflation is estimated at 3.7%.

Total sales from South African stores for the 26-week period decreased by 10.6%, while comparable sales
decreased by 10.5%.

Total sales from our rest of Africa stores for the 26-week period decreased by 0.1%, with comparable store
sales decreasing by 1.5%

ESTIMATED IMPACT OF COVID- 19 LOCKDOWN REGULATIONS

As reported previously, the Covid-19 national lockdown in South Africa had a significant impact on the
trading performance of the Massmart Group. For the 9-week period from 30 March 2020 to 31 May 2020,
total sales were R4.6 billion lower than the same period last year. Operating costs attributable to the
execution of safety protocols in our stores in accordance with regulated requirements amounted to R62
million on a YTD basis, while we have seen other indirect costs related to the pandemic increasing by R13
million.

The focus of the Group relating to our turnaround plan announced at our Investor Strategy Day at the end
of January 2020 continues at pace, with the lockdown serving to accelerate many of our initiatives,
specifically those relating to our cost reset, the Group restructure into Wholesale and Retail Business Units
and the Game turnaround plan. Further information on the progress of our turnaround initiatives will be
provided at our interim results presentation.

TRADING STATEMENT FOR THE 26-WEEK PERIOD ENDED 28 JUNE 2020

As referenced, the Covid-19 lockdown has had a significant impact on trading performance. While sales
have been lower than the same period last year, an increased focus on trading discipline and driving
everyday low prices while maintaining our competitive pricing gap has led to enhanced gross profit margin
percentages. At the same time, expense control and cost savings initiatives are yielding results, with
substantially lower expense growth through the period compared with the prior year and well below inflation.
Earnings are expected to be adversely affected by the impairment of the carrying value of some store level
assets, as well as retrenchment costs relating to the announced closure of all of the Dion Wired and 11
Masscash stores. A possible sale of the Masscash stores is currently under review.

Consequently, Massmart expects with a reasonable degree of certainty, that earnings and headline
earnings will be within the ranges reflected in the table below:

                                              Expected             Reported                     Expected
                                             June 2020            June 2019                     % change

Rm
Headline loss (Rm)               (1,050.3) to (1,130.3)               (800.7)*            (31%) to (41%)
HEPS (cents)                         (483.3) to (519.9)               (366.6)*            (32%) to (42%)
Net loss (Rm)                    (1,119.3) to (1,202.9)                (836.1)            (34%) to (44%)
Basic EPS (cents)                    (515.1) to (553.3)                (382.8)            (35%) to (45%)

*Restated to apply the SAICA Circular 1/2019 on headline earnings which resulted in a prior year amount of R5.7 million
relating to the pre-tax loss arising from the partial or full termination of leases no longer being a headline earnings
adjustment.

Excluding the impact of Covid-19, we expect that the loss and headline loss would have been better than
the same period last year.

Massmart’s financial results for the 26 weeks to June 2020 will be released on the Stock Exchange News
Service of the JSE Limited on 27 August 2020.

The information above has not been audited or reviewed or otherwise reported on by the Company’s
external auditors.


Johannesburg
20 August 2020


Sponsor: J.P. Morgan Equities South Africa (Pty) Ltd

Date: 20-08-2020 12:46:00
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