| Wed 26 Nov 2008, 9:39 | | MSM - Massmart - Results of annual general meeting and Ceo`s statement |
|
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" or "the Group")
RESULTS OF ANNUAL GENERAL MEETING and CEO`s STATEMENT
Shareholders are advised that at the Massmart Annual General Meeting held on
Wednesday, 26 November 2008, the requisite majority of shareholders passed all
the ordinary resolutions and the two special resolutions, as set out in the
notice of meeting dated 1 October 2008. The special resolutions will now be
lodged with the Companies and Intellectual Property Registration Office for
registration.
Included in the resolutions were those required for the approval of the sale of
discounted treasury shares to Massmart`s Black non-executive directors, which
will now be implemented.
CEO`s STATEMENT
As we enter the Festive trading season, the fallout from the global financial
crisis and the likely global recession are sobering reminders that business
cycles are a reality. South Africa`s relative insulation from the global
financial crisis is a credit to the quality of financial leadership in both the
Public and Private sectors. Our relative insulation from the likely global
recession however, remains to be seen.
For the first 21 weeks of the 2009 financial year Massmart`s total sales growth
was 13.3% and comparable sales growth was 12.3%, with 12-month rolling sales
inflation running at 9.3%.
Within our portfolio we are experiencing strong performances from Masswarehouse
and Masscash benefiting from steady volumes in the Food and Liquor categories.
We are pleased with the performance of Massdiscounters, where the Game brand in
South Africa has benefited from the consumer`s shift to value and the African
business continues to perform strongly and is benefiting from a weaker Rand. On
the other hand Massbuild is beginning to show signs of the extent to which it is
exposed to the dynamics of the residential property market: higher interest
rates, lower property prices and tighter credit granting criteria by the banks.
Total and comparable sales growths in each Division are:
- 13.5%, 15.8% (0.5% inflation) in Massdiscounters;
- 16.1%, 12.2% (10.4% inflation) in Masswarehouse;
- 2.6%, -1.2% (10.6% inflation) in Massbuild; and
- 15.7%, 16.6% (15.4% inflation) in Masscash.
Whilst Massbuild has now successfully digested all aspects of the merger, as a
result of the slowing sales, profits in that Division are below the prior year.
Excluding the positive effect of unrealised foreign exchange translation gains,
profit margins in the remaining three Divisions are currently at or above those
for the prior comparable period.
Despite the international financial turmoil foreign share ownership in Massmart
was 60.5% as at September 2008.
With 29 months passing since South African interest rates first began
increasing, the Group has so far performed well through the cycle. The first
drop in CPIX in September 2008 was encouraging and with the data clearly showing
a slowing economy, we are anticipating the first reduction in interest rates,
signaling the turn in the economic cycle, in the first or second quarter of
2009. However, should there be any further financial shocks that may cause
interest rate cuts to be delayed towards the end of 2009, the risk of expense
growth exceeding sales growth rises.
We believe that the medium- to long-term South African consumer market remains
sound and we continue with our plans to invest for growth, whilst operating the
business as tight as possible. In the short-term we are focused on holding net
operating margins to June 2009, which is most dependant on our ability to
minimise the downside in Massbuild.
The financial information contained in this announcement has not been reviewed
or reported on by the Group`s auditors.
Johannesburg
26 November 2008
Sponsor: Deutsche Securities (SA) (Proprietary) Limited
Date: 26/11/2008 09:39:04 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
