Results point to consumer recovery

Massmart, South Africa’s biggest food and general goods retailer recently announced its results, with sales for the twelve month period ending 27 June 2010 up ten per cent to R 47.5 billion, whilst operating profit grew by 0.1 per cent to R 2.03 bn before forex. The DIY and Home Improvement Division Massbuild, which comprises a total of 76 stores under the Builders Warehouse, Builders Express and Builders Trade Depot brands in South Africa increased sales by 13.6 per cent to R 6.37 bn (€ 584 mio), whilst Trading Profit before interest and tax increased by a very healthy 24.6 per cent to R 277.3 mio. During the period they opened or acquired two Builders Warehouses, four Builders Express and two Builders Trade Depot stores, and three closed resulting in net trading space increasing by 7.6 per cent. Massbuild like for like store sales increased by 3.4 per cent with estimated inflation of 1.8 per cent.Massmart commented “In the current negative residential building market, this is a very good trading performance that reflects the intensive management focus over the past few years. Homeowners’ efforts to maintain and improve their homes managed to compensate for the decline in new homes built. We completed the integration of all the formats under one management team and made several strategic and opportunistic acquisitions. The largest of these is Pupkewitz (a chain of Builders Merchants stores in Namibia), which we expected to have completed by June 2010 but remains yet to be fully approved by the Namibian authorities”.