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MSM
MSM
MSM - Massmart - Reviewed consolidated results for the 26 weeks ended 28
December 2008
Massmart Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration Number: 1940/014066/06)
Share code: MSM
ISIN: ZAE000029534
("Massmart" or "the company" or "the Group")
MASSMART
DEDICATED TO VALUE
Reviewed consolidated results for the 26 weeks ended 28 December 2008
Massmart is a managed portfolio of nine wholesale and retail chains, each
focused on high-volume, low-margin, low-cost distribution of mainly branded
consumer goods for cash, in 14 countries in sub-Saharan Africa through four
divisions comprising 254 stores.
The Group is the third largest distributor of consumer goods in Africa, the
leading retailer of general merchandise, liquor and home improvement equipment
and supplies, and the leading wholesaler of basic foods.
Accolades
For the second year running achieved "Top Performer" status in JSE Socially
Responsible Investment Index
Ranked third overall for quality of reporting in 2008 Carbon Disclosure Project
Awarded level 5 BBBEE contributor status by Empowerdex
Sales increase 13% to R22 758 million
Trading profit increases 11% to R1 334 million
Headline earnings increases 13% to R863 million
Headline EPS increases 13% to 433 cents
Cash generated from operations increases 41% to R2 529 million
Overview
In the midst of the global economic turmoil, the South African consumer is
behaving as one would expect through a traditional interest-rate cycle.
Consumers have focused their purchases on their more immediate needs, have
become more value conscious and have spent more using cash than using credit.
This consumer behaviour is evident in the differing performances across our four
Divisions, resulting in a satisfactory Group sales and profit performance
underpinned by powerful cash generation.
Group sales for the 26 weeks to 28 December 2008 increased by 13,1% and
comparable store sales increased by 11,9%. Annual rolling inflation for the
Group was 9,9%.
Profit before tax increased by 11,9%, and headline earnings per share increased
by 13,1%.
Cash generated by operations increased by 41,1% as working capital management
was tightened.
Trading patterns were as expected in this environment with strong Food and
Liquor sales growth of 18,6%, General Merchandise growth holding steady at 11,8%
and Home Improvement growth of 1,4% slowing through the period.
Masswarehouse and Masscash produced strong profit growth, Massdiscounters
performed well supported by a strong performance in Africa, and Massbuild bore
the brunt of the tighter interest-rate cycle with its exposure to bonded
residential property.
Whilst being mindful of the current volatile and uncertain environment, we have
continued to invest in our strategic growth plan. In this period, trading space
increased 3,9%, by opening a net five new stores and acquiring seven stores.
Environment
The global economic crisis dominated all agendas, introducing a recessionary
environment across much of the developed world and globally. Governments across
the world scrambled to shore up financial institutions and limit the downside
risk, the merits and success of which remain to be seen.
In South Africa, high interest rates continued to exert pressure on real
consumer spending, but inflation has finally reversed its upward trend, which
signals the beginning of a lower interest rate environment. The effects of the
global economic crisis however, began to be noticed in those sectors of the
South African economy most exposed to the global slowdown such as mining,
construction and export-orientated manufacturing.
African economies continued to perform well, but are likely to have a delayed
reaction to the global slowdown.
Divisional Operating Review
26 weeks 26 weeks
December December
2008 % of 2007 % of
Rm (Reviewed) sales (Reviewed) sales
Sales 22 758,2 20 122,9
Massdiscounters 6 087,7 5 383,6
Masswarehouse 5 868,1 5 108,4
Massbuild 2 936,2 2 896,6
Masscash 7 866,2 6 734,3
Trading profit 1 333,8 5,9 1 200,5 6,0
before interest
and tax*
Massdiscounters 513,2 8,4 444,0 8,2
Masswarehouse 405,9 6,9 335,8 6,6
Massbuild 146,2 5,0 222,7 7,7
Masscash 268,5 3,4 198,0 2,9
Trading profit 1 444,7 6,3 1 285,9 6,4
before tax**
Massdiscounters 541,5 8,9 462,7 8,6
Masswarehouse 445,3 7,6 367,7 7,2
Massbuild 168,9 5,8 238,4 8,2
Masscash 289,0 3,7 217,1 3,2
Period Comparable Estimated 53 weeks
% % sales % sales June 2008 % of
Rm growth growth inflation (Audited) sales
Sales 13,1 11,9 9,9 39 783,6
Massdiscounters 13,1 14,6 1,8 10 406,5
Masswarehouse 14,9 11,8 11,9 10 103,8
Massbuild 1,4 (2,7) 10,6 5 662,9
Masscash 16,8 16,9 15,9 13 610,4
Trading profit
before interest
and tax* 11,1 2 156,9 5,4
Massdiscounters 15,6 724,6 7,0
Masswarehouse 20,9 640,2 6,3
Massbuild (34,4) 390,1 6,9
Masscash 35,6 402,0 3,0
Trading profit
before tax** 12,3 2 386,4 6,0
Massdiscounters 17,0 783,2 7,5
Masswarehouse 21,1 730,8 7,2
Massbuild (29,2) 433,0 7,6
Masscash 33,1 439,4 3,2
*Trading profit before interest and tax is before asset impairments and the BEE
transaction IFRS 2 charge of R30,6 million (2007: R33,9 million).
** Trading profit before tax is after divisional net interest but before
corporate net interest of R140,0 million (2007: R113,3 million), asset
impairments and the BEE transaction IFRS 2 charge of R30,6 million (2007: R33,9
million).
Massdiscounters - comprises the 87-store General Merchandise retail discounter
Game, which trades in South Africa, Namibia, Botswana, Zambia, Uganda,
Mozambique, Mauritius, Malawi, Tanzania, Nigeria, and Ghana; and the six-store
Hi-tech retailer Dion Wired.
Divisional comparable store sales increased by 14,6% with estimated inflation of
1,8%. Total sales increased by 13,1% and trading profit before tax increased by
17,0%.
Given the exposure of the Game brand to the middle income consumer, the South
African business performed well with comparable sales growth of 5,3%. The
African business performed exceptionally with sales growing by 62,3% and 32% in
local currency.
The investments in efficiency and competitiveness continued, and the new Cape
Town Regional Distribution Centre opened in August 2008 is operating
effectively.
In October 2008, a new look Game store in Boksburg was unveiled and achieved
record-breaking opening sales.
During the period, two Game stores and one Dion Wired store were opened,
increasing net trading space by 1,5%.
Masswarehouse - comprises the 13-store Makro warehouse club trading in Food,
General Merchandise and Liquor in South Africa (and two Zimbabwean stores, not
consolidated in the Group results).
Divisional comparable store sales increased by 11,8% with estimated inflation of
11,9%. Total sales increased by 14,9% and trading profit before tax increased by
21,1%.
By focusing on the detail, Makro took advantage of multiple trading
opportunities. Internally, momentum gathered in securing new store sites and
implementing the new SAP Forecasting and Replenishment system.
No new stores were opened.
Massbuild - comprises 71 stores, trading in DIY, Home Improvement and Builders
Hardware, under the Builders Warehouse, Builders Express and Builders Trade
Depot brands in South Africa.
Divisional comparable store sales decreased by 2,7% with estimated inflation of
10,6%. Total sales increased by 1,4% and trading profit before tax decreased by
29,2%.
Despite the pressure on sales, the Division delivered a strong operational
performance with improvements in the control environment on all fronts.
Inventory was significantly better controlled in both its absolute level and in
age profile. Divisional management was strengthened with the appointment of a
new CEO and Financial Director towards the end of the calendar year.
With the challenges resulting from the mergers now resolved, we are in a
stronger position to respond to the softening sales and to prepare for the
recovery in the bonded residential property market.
Our latest thinking for the look of the Builders Warehouse format was evident in
the new Northriding store and in the relocated Centurion store.
One Builders Warehouse store, one Builders Express store and one Builders Trade
Depot store were opened. Net trading space increased by 4,6% from the 2008 year-
end.
Masscash - comprises 77 Cash and Carry stores trading in South Africa, Lesotho,
Namibia and Botswana, and Shield, a voluntary buying association.
Divisional comparable store sales increased by 16,9% with estimated inflation of
15,9%. Total sales increased by 16,8% and trading profit before tax increased by
33,1%. The new BATSA cigarette distribution model adversely affected total sales
growth in Masscash by 3,8% and comparable sales by 4,6% this period.
With Food inflation close to 20% during the period, efforts were focused on
securing the lowest possible prices and passing them on to customers. Food
inflation is expected to return to lower levels towards the middle of the
calendar year, and deflation in some categories like oil and rice, for example,
is expected.
The new in-store IT system continues to be rolled out as fast as possible.
The acquisition of Retail Cash and Carry formats continued with the acquisition
of 51% of the six-store Cambridge Food business which became effective 1
December 2008. The Masscash executive team is focused on the growth of this
format both through acquisition and new sites.
Net trading space increased by 8,3% from the 2008 year-end.
Financial Review
Income Statement
Total sales growth for the 26-week period to 28 December 2008 was 13,1% and
comparable sales growth was 11,9%. Total African sales represented 8,8% of Group
sales and grew by 45,4%. Group sales inflation on an annual rolling basis is
estimated to be 9,9%.
During the period one store was closed, six opened, and seven acquired,
resulting in a total of 254 stores at the end of December 2008. Net trading
space increased by 3,9% to a total of 1 052 555mSquared.
Gross profit of 18,1% was lower than the prior period`s 18,4%, a combination of
steady gross margins in Makro and Masscash, and lower gross margins in
Massdiscounters and Massbuild.
Total expenses increased by 11,8% and improved as a percentage of sales over the
prior period.
Disclosed separately in operating profit are net realised and unrealised foreign
exchange gains of R52,7 million (2007: R14,9 million loss), most of which arose
from the translation of Massdiscounters` African stores and foreign cash
balances.
Profit before taxation and foreign exchange movements of R1 221,4 million grew
5,9% on the equivalent figure in the prior period.
Net interest paid increased due to higher inventory levels for most of the six-
month period, but which has now normalised, and higher commercial interest
rates.
A 51% shareholding in Cambridge Food was acquired for cash with effect from 1
December 2008. The effect of this acquisition on this period`s results is not
material.
The non-cash IFRS 2 charge associated with the Group`s Staff Empowerment scheme,
Thuthukani, was R30,6 million (2007: R33,9 million). The total cost of the
scheme during the period was R42,4 million (2007: R38,9 million) and has
increased because of the greater proportion of the preference dividend now
accruing to scheme participants (see Note 5).
Adjusting for the non-deductible total IFRS 2 charges, the Group`s effective tax
rate is 28,2% (2007: 30,2%), which includes the effect of STC of 2,1% (2007:
2,3%).
The minority interests comprise mainly the CBW store managers` holdings in
certain Masscash stores and the 49% minority interest in Cambridge Food.
Both headline earnings and headline EPS grew by 13,1% (the growth in both
figures before net foreign exchange gains: 6,6%).
Balance Sheet
The sale of the Massdiscounters Consumer Credit division and debtors book was
effective immediately after the close of the 2008 financial year. An amount of
R174,3 million was received in cash on 30 June 2008.
Group inventory levels were higher at June 2008 and for much of this reporting
period for reasons described at that time, but have since returned to acceptable
levels as evidenced by the improvement in Cash generated from Operations.
Massdiscounters and Massbuild, in particular, achieved substantial improvements
to their respective inventory levels.
At the end of the period, the non-current interest-bearing debt of R213,4
million (2007: R346,2 million) represented an average debt:equity ratio of 9,7%
(2007: 16,5%). Using net finance costs as a proxy, however, average interest-
bearing debt for the year was R418 million, representing average gearing of
14,4%.
The 12-month rolling return on equity of 49,5% at December 2008 is an
improvement on the equivalent December 2007 figure of 48,0%.
Progress with Vision 2011
Although management focus has been somewhat diverted by managing a changing
economic environment, overall excellent progress was made on all fronts of our
Strategic Agenda. Highlights include:
- Upgrading our buyers and marketers skills in managing private brands and
establishing internal performance targets;
- Securing at least one new site for a Makro store;
- Committing to building a Game Regional Distribution Centre in Gauteng,
which is the second stage in our three-stage process to switch to a new
Massdiscounters supply chain model;
- Concluding several purchase agreements for new Retail Cash and Carry
stores, subject to the normal regulatory approvals; and
- Achieving independent verification of our increased BEE score moving us
from a level 6 to a level 5 contributor.
Prospects
For the 34 weeks to 22 February 2009, total sales increased by 12,7% and
comparable sales increased by 11,3%.
All economists and participants in the consumer goods industry agree that 2009
will be more difficult than 2008, despite the expected interest rate cuts. Save
for any further economic shocks, we anticipate some improvement in the South
African consumer environment in the second half of the calendar year.
For the remainder of this financial year however, management is focused on
achieving 2008 Group operating margins (adjusted for the 53rd week), which will
require particular focus on Massbuild.
Conclusion
We are satisfied with the performance of the Group in this environment, but
still see many opportunities for improved performance. Management is
endeavouring to balance a disciplined operating focus that is responding to the
most recent trends, with investments in long-term competitiveness and growth,
whilst being alert to cash preservation.
The Group is in a healthy position to weather the economic storm and we
anticipate being in an advantageous position to participate in the next economic
upswing.
Distribution and Dividend Policy
Massmart`s dividend policy is to declare and pay an interim and final cash
dividend representing a 1,7 times dividend cover unless circumstances dictate
otherwise.
Notice is hereby given that an interim cash dividend of 252 cents per share in
respect of the period ended 28 December 2008 has been declared payable to the
holders of ordinary shares recorded in the books of the company on Friday, 20
March 2009. The last day to trade cum-dividend will therefore be Friday, 13
March 2009 and Massmart shares will trade ex-dividend from Monday, 16 March
2009. Payment of the dividend will be made on Monday, 23 March 2009. Share
certificates may not be dematerialised or rematerialised between Monday, 16
March 2009 and Friday, 20 March 2009, both days inclusive.
A Thuthukani dividend of 189 cents, equivalent to 75% of the Massmart ordinary
dividend per share, will be paid to the Thuthukani participants on Monday, 23
March 2009.
On behalf of the Board
Grant Pattison Guy Hayward
Chief Executive Officer Chief Financial Officer
25 February 2009
Income statement
26 weeks 26 weeks 53 weeks
December 2008 December 2007 June 2008
Rm (Reviewed) (Reviewed) % change (Audited)
Revenue 22 812,7 20 217,8 12,8 39 944,8
Sales 22 758,2 20 122,9 13,1 39 783,6
Cost of sales (18 630,4) (16 411,0) (13,5) (32 481,4)
Gross profit 4 127,8 3 711,9 11,2 7 302,2
Other income 54,5 91,8 (40,6) 161,2
Depreciation and
amortisation (171,2) (143,1) (19,6) (297,8)
Impairment of assets
(note 3) - - - (4,7)
Employment costs (1 492,6) (1 350,4) (10,5) (2 736,2)
Occupancy costs (538,1) (468,5) (14,9) (962,7)
Foreign exchange
profit/(loss) 52,7 (14,9) 62,5
Other operating costs (729,9) (660,2) (10,6) (1 439,4)
Operating profit 1 303,2 1 166,6 11,7 2 085,1
Finance costs (60,9) (49,8) (22,3) (110,6)
Finance income 31,8 21,9 45,2 46,5
Net finance costs (29,1) (27,9) (4,3) (64,1)
Profit before taxation 1 274,1 1 138,7 11,9 2 021,0
Taxation (378,2) (359,3) (5,3) (662,9)
Profit for the period 895,9 779,4 14,9 1 358,1
Attributable to:
Equity holders of the 868,3 762,9 13,8 1 314,1
parent
Preference shareholders 11,8 5,0 22,5
(note 5)
Minority interest 15,8 11,5 21,5
895,9 779,4 1 358,1
Basic EPS (cents) 435,5 382,5 13,9 660,3
Diluted basic EPS 422,8 370,3 14,2 644,6
(cents)
Dividend (cents):
- Interim 252,0 223,0 13,0 223,0
- Final - - 163,0
- Total 386,0
Reconciliation of net
profit for the period to
headline earnings
Net profit attributable 868,3 762,9 1 314,1
to equity holders of the
parent
Impairment of assets - - 4,7
(note 3)
Loss on disposal of
property, plant and
equipment 0,6 0,2 3,8
Profit on sale of assets
classified as held for
sale (7,0) - -
Total tax effects of
adjustments 0,7 (0,1) (3,2)
Headline earnings 862,6 763,0 13,1 1 319,4
Headline EPS (cents) 432,6 382,6 13,1 663,0
Headline EPS before
foreign 413,6 387,9 6,6 640,4
exchange (cents)
Headline EPS (cents) -
52 Weeks - - 634,1
Diluted headline EPS
(cents) 420,1 370,3 13,4 647,2
Balance sheet
December December June
2008 2007 2008
Rm (Reviewed) (Reviewed) % change (Audited)
ASSETS
Non-current assets 4 221,7 3 670,6 3 840,6
Property, plant and equipment 1 571,6 1 326,9 18,4 1 393,0
Goodwill and other intangible
assets 1 699,1 1 488,0 1 494,4
Investments and loans 538,8 437,8 538,0
Deferred taxation 412,2 417,9 415,2
Current assets 10 524,3 9 415,7 7 892,7
Inventories 5 533,5 5 300,2 4,4 4 758,6
Accounts receivable and
prepayments 2 309,0 2 352,3 (1,8) 1 764,1
Taxation 62,0 13,5 310,4
Cash and bank balances 2 619,8 1 749,7 1 059,6
Assets classified as held for
sale (note 6) - - 167,6
Total 14 746,0 13 086,3 11 900,9
EQUITY AND LIABILITIES
Total equity 3 259,7 2 563,0 2 766,5
Equity attributable to equity
holders of the parent 3 232,7 2 542,2 27,2 2 735,8
Minority interest 27,0 20,8 30,7
Non-current liabilities 937,6 1 075,7 1 015,9
Non-current liabilities -
interest-bearing 213,4 346,2 267,7
Other non-current liabilities
and provisions 568,3 601,4 606,3
Deferred taxation 155,9 128,1 141,9
Current liabilities 10 548,7 9 447,6 8 118,5
Accounts payable and accruals 9 750,4 8 952,0 8,9 7 391,5
Taxation 395,0 309,4 543,1
Bank overdrafts and short-term
borrowings 403,3 186,2 183,9
Total 14 746,0 13 086,3 11 900,9
Additional information
26 weeks 26 weeks 53 weeks
December December June
2008 2007 2008
(Reviewed) (Reviewed) (Audited)
Net asset value per share
(cents) 1 606,1 1 264,0 1 359,8
Ordinary shares (000`s):
- In issue 201 277 201 129 201 195
- Weighted average 199 390 199 451 198 996
- Diluted weighted average 205 348 206 048 203 867
Preference shares (000`s):
- Thuthukani "A" shares (note 4) 17 784 17 912 17 868
- Black Scarce Skills Trust "B"
shares (note 4) 1 979 2 000 1 979
Capital expenditure (Rm)
- Authorised and committed 220,4 149,6 278,0
- Authorised not committed 223,7 208,3 287,2
Operating lease commitments
(2009 - 2022) (Rm) 8 209,4 6 327,1 6 270,7
US dollar exchange rates - 7,96
period end 9,77 7,08
- average 8,85 6,96 7,31
Cash flow statement
26 weeks 26 weeks 53 weeks
December December June
2008 2007 2008
Rm (Reviewed) (Reviewed) (Audited)
Operating cash before working
capital movements 1 503,9 1 283,3 2 394,9
Working capital movements 1 024,6 509,3 (73,2)
Cash generated from operations 2 528,5 1 792,6 2 321,7
Taxation paid (279,5) (315,0) (668,1)
Net interest paid (29,1) (27,9) (64,1)
Investment income 18,1 32,7 47,7
Dividends received 2,5 2,2 2,2
Dividends paid (335,9) (249,5) (709,9)
Cash inflow from operating
activities 1 904,6 1 235,1 929,5
Investment to maintain operations (123,7) (153,1) (263,1)
Investment to expand operations (215,1) (196,9) (309,6)
Disposal of assets classified as
held for sale 174,3 - -
Businesses acquired (147,2) - -
Other investing activities 4,8 (343,1) (325,5)
Cash outflow from investing (306,9) (693,1) (898,2)
activities
Cash outflow from financing (104,9) (48,3) (222,7)
activities
Net increase/(decrease) in cash and
cash equivalents 1 492,8 493,7 (191,4)
Foreign exchange gain/(losses)
taken to statement of changes in
equity 30,2 (8,4) 4,6
Opening cash and cash equivalents 1 021,9 1 208,7 1 208,7
Closing cash and cash equivalents 2 544,9 1 694,0 1 021,9
Statement of changes in equity
General
6 months ended December 2008 Ordinary non-
(Reviewed) share Share distributable Retained
Rm capital premium reserve profit
Opening balance 2,0 151,7 269,0 2 313,1
Exchange differences - - 30,1 -
Dividends declared - - - (336,8)
Cash flow hedges taken
directly to equity - - 8,6 -
Profit for the period - - - 880,1
Changes in minority interests
and distribution to minorities
- - - -
Financial liability raised on
a business acquisition - - (120,0) -
Net movement of treasury - (20,2) 33,7 -
shares
Share trust transactions and - - 68,0 (46,6)
IFRS 2 charge
Total 2,0 131,5 289,4 2 809,8
Equity
attributable
6 months ended December 2008 to equity
(Reviewed) holders of Minority
Rm the parent interest Total
Opening balance 2 735,8 30,7 2 766,5
Exchange differences 30,1 - 30,1
Dividends declared (336,8) - (336,8)
Cash flow hedges taken directly to
equity 8,6 - 8,6
Profit for the period 880,1 15,8 895,9
Changes in minority interests and
distribution to minorities - (19,5) (19,5)
Financial liability raised on a
business acquisition (120,0) - (120,0)
Net movement of treasury shares
13,5 - 13,5
Share trust transactions and IFRS 2
charge 21,4 - 21,4
Total 3 232,7 27,0 3 259,7
General
6 months ended December 2007 Ordinary non-
230200720072007
(Reviewed) share Share distributable Retained
Rm capital premium reserve profit
Opening balance 2,0 254,7 205,4 1 776,9
Exchange differences - - (8,5) -
Dividends declared - - - (249,5)
Cash flow hedges taken
directly to equity - - (8,0) -
Profit for the period - - - 767,9
Changes in minority
interests and distribution - - - -
to minorities
Release of deferred taxation
on trademarks - - (2,9) 2,9
Net movement of treasury
shares - (215,5) - -
Share trust transactions and - - 52,4 (35,6)
IFRS 2 charge
Total 2,0 39,2 238,4 2 262,6
Equity
attributable
6 months ended December 2007 to equity
(Reviewed) holders of Minority
Rm the parent interest Total
Opening balance 2 239,0 25,8 2 264,8
(8,5) - (8,5)
Exchange differences
Dividends declared (249,5) - (249,5)
Cash flow hedges taken directly to
equity (8,0) - (8,0)
Profit for the period 767,9 11,5 779,4
Changes in minority interests and
distribution to minorities - (16,5) (16,5)
Release of deferred taxation on
trademarks - - -
Net movement of treasury shares (215,5) - (215,5)
Share trust transactions and IFRS 2
charge 16,8 - 16,8
Total 2 542,2 20,8 2 563,0
General
Year ended June 2008 Ordinary non-
(Audited) share Share distributable Retained
Rm capital premium reserve profit
Opening balance 2,0 254,7 205,4 1 776,9
Exchange differences - - 4,6 -
Dividends declared - - - (709,9)
Cash flow hedges taken - - (1,9) -
directly to equity
Profit for the period - - - 1 336,6
Changes in minority - - - -
interests and
distribution to
minorities
Gains and losses not - - 3,3 -
recognised in the income
statement
Release of deferred - - (5,8) 5,8
taxation on trademarks
Net movement of treasury - (103,0) (45,7) -
shares
Share trust transactions - - 109,1 (96,3)
and IFRS 2 charge
Total 2,0 151,7 269,0 2 313,1
Equity
attributable
Year ended June 2008 to equity
(Audited) holders of Minority
Rm the parent interest Total
Opening balance 2 239,0 25,8 2 264,8
Exchange differences 4,6 - 4,6
Dividends declared (709,9) - (709,9)
Cash flow hedges taken directly to
equity (1,9) - (1,9)
Profit for the period 1 336,6 21,5 1 358,1
Changes in minority interests and
distribution to minorities - (16,6) (16,6)
Gains and losses not recognised in
the income statement 3,3 - 3,3
Release of deferred taxation on
trademarks - - -
Net movement of treasury shares (148,7) - (148,7)
Share trust transactions and IFRS 2
charge 12,8 - 12,8
Total 2 735,8 30,7 2 766,5
Notes
1. These condensed financial statements have been prepared in accordance with
IAS 34 Interim Financial Reporting, using accounting policies that are in line
with IFRS and consistently applied to prior periods.
2. Shares bought in the market by the Share Trust for the period was 0,7 million
shares (2007: 3,3 million) at an average price of R80,49 (2007: R83,10)
totalling R56,3 million (2007: R271,8 million).
3. The impairment of assets in the prior year relates to the impairment of
computer software and trademarks.
4. The Massmart BEE transaction, which came into operation in October 2006, gave
rise to an IFRS 2 Share-based Payment charge of R30,6 million (2007: R33,9
million). The "A" and "B" preference shares have been issued to the Thuthukani
Trust and the Black Scarce Skills Trust respectively.
5. The preference shareholders amount of R11,8 million (2007: R5,0 million)
represents the final dividend of 81,5 cents (2007: 30,75 cents) paid to all
Thuthukani participants. In year one (to June 2007), the Thuthukani dividend was
equivalent to 25% of the ordinary dividend, in year two (2008) it was equivalent
to 50%, in year three (2009) it is equivalent to 75%, in year four (2010) it
will be equivalent to 100%.
6. The assets classified as held for sale in the prior year relates to the cash
sale of the Massdiscounters Consumer Credit division and debtors book effective
from 30 June 2008, immediately after closing the 2008 financial year.
7. Related party transactions include certain properties used by Masscash that
are leased from CCW Property Holdings (Pty) Ltd in which Robin Wright has a
minority shareholding. Robin Wright is a director and former owner of CBW. From
time to time, in the normal course of business, Massmart and its divisions make
use of private aircraft hired from competitively selected charter companies, one
of which operates an aircraft indirectly beneficially owned by Mr MJ Lamberti.
8. The number of treasury shares held at December 2008 totalled 1 140 000 shares
(2007: 2 620 238 shares).
9. Due to Christmas trading, Massmart`s earnings are weighted towards the six
months to December.
10. These results have been reviewed by independent external auditors, Deloitte
& Touche, and their unmodified review opinion is available for inspection at the
registered office.
Directorate
MJ Lamberti (Chairman), CS Seabrooke (Deputy Chairman) GM Pattison* (Chief
Executive Officer), MD Brand, ZL Combi, KD Dlamini, NN Gwagwa, GRC Hayward*
(Chief Financial Officer), JC Hodkinson**, P Langeni,
IN Matthews, P Maw, DNM Mokhobo, MJ Rubin
*Executive **United Kingdom
Registered office
Massmart House, 16 Peltier Drive
Sunninghill Ext 6, 2191
Company secretary
I Zwarenstein
Transfer secretaries
Computershare Investor Services (Pty) Ltd
Registered auditors
Deloitte & Touche
For more information
www.massmart.co.za
Johannesburg
26 February 2009
Sponsor
Deutsche Securities (SA) (Proprietary) Limited
Date: 26/02/2009 07:05:07 Produced by the JSE SENS Department.
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