| Wed 21 Nov 2007, 9:45 | | MSM - Massmart - Results Of Annual General Meeting |
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MSM
MSM
MSM - Massmart - Results Of Annual General Meeting And CEO`s Statement
Massmart Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1940/014066/06)
Share Code: MSM
ISIN: ZAE000029534
("Massmart")
RESULTS OF ANNUAL GENERAL MEETING and CEO`s STATEMENT
Shareholders are advised that at the Massmart Annual General Meeting held on
Wednesday 21 November 2007, the requisite majority of shareholders passed
all the ordinary resolutions, except for ordinary resolution 10. The
special resolution, as set out in the notice of meeting dated 10 October
2007 was passed by the requisite majority. The special resolution will be
lodged with the Companies and Intellectual Property Registration Office for
registration.
CEO`s STATEMENT
Consistent with the trends evident in the national retail data, we are
experiencing a tightening in the retail environment as a result of higher
interest rates and the effect on consumers of the implementation of the
National Credit Act. However, as experienced in previous tightening
interest rate cycles our cash-based model, combined with the participation
of wholesale food, is proving to be relatively resilient.
For the first 21 weeks of the 2008 financial year, Massmart`s total sales
growth was 12.7% and comparable sales growth was 10.6%, with overall Group
inflation of 5.9% for the same period.
High Food and Liquor inflation (9.1%), with volumes unaffected by interest
rates, resulted in comparable Food and Liquor sales growth of 13.7%. Low
General Merchandise inflation (1.2%), coupled with slowing volume growth,
reduced comparable General Merchandise sales growth to 7.6%. For the first
time in several years the General Merchandise categories, which include Home
Improvement, are simultaneously experiencing both low product-inflation and
high interest rates, with obvious negative effects on sales growth. A
further increase in interest rates, seemingly in response to rising Food
inflation, will exacerbate this trend.
Despite the overall pressure on General Merchandise sales, we experienced
strong sales growths in Multimedia and Hi-Tech of 26.5% and in DIY of 17.3%.
The cool, wet start to summer ensured a good clearance of Winter Seasonal
products, but delayed the traditional spending patterns in Summer Seasonal
sales - although this picked up recently. The relatively high rainfall in
most of the country in the first quarter also reduced the sales growth in
Building Materials and related categories.
The last few weeks saw successful store openings at Makro, in Silver Lakes
Pretoria, Builder Warehouse, in Nelspruit, and Dion Wired in Gateway Durban,
which contributed, albeit marginally, to total Group sales growth. With the
continued difficulties securing land in the broader Durban market, total
unweighted forecast space growth for the 2008 financial year is 4%, with 8%
forecast for each of the 2009 and 2010 financial years.
As at September 2007, the foreign share ownership in Massmart had reduced to
61% with the balance held by South African shareholders.
Since 23 August 2007, a Massmart subsidiary has purchased 3 070 238 Massmart
shares from the open market for a total consideration of R257m and at an
average price of R83.67 per share.
We continue to believe that the medium- to long-term South African consumer
story remains sound and whilst we have already shifted management priorities
in response to the tightening short-term cycle, we continue to invest for
long-term growth.
Johannesburg
21 November 2007
Sponsor: Deutsche Securities (SA) (Proprietary) Limited
Date: 21/11/2007 09:45:03 Produced by the JSE SENS Department.
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