MSM
MSM
Massmart - Prospects
Massmart Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1940/014066/06)
Share Code: MSM
ISIN Code: ZAE000029534
("Massmart" or "the Company")
Prospects
The following prospects were included in the Annual Report posted to the
shareholders of Massmart today:
It can be expected that a tightening of the monetary policy in response to
gradually increasing inflation will slow the extraordinary rate of retail sales
growth that South Africa has enjoyed in recent years. There is as yet no
evidence of slower growth in Massmart"s sales and indeed recent trends suggest a
promising Christmas season, which will include the sales of 12 new stores
planned to open before then. Our current view is therefore that Massmart will
enjoy a good first half with sales and profit growth ahead of that of the
comparable period in 2005 and with earnings well ahead of sales growth for the
year to June 2007.
Looking beyond this, shareholders should be mindful of two important facts.
The first is that as a cash retailer, Massmart"s value proposition has
traditionally become relatively more attractive to consumers in periods of
higher interest rates. The second is that company initiated growth and profit
initiatives have historically had a greater impact on Massmart"s sales and
profit performance than economic cycles.
For the 15 weeks to 8 October 2006, total sales grew 16.2% and comparable store
sales grew 12.9% with profit growth significantly ahead of sales growth and last
year. Inflation for the same period was 3.8%.
Johannesburg
31 October 2006
Sponsor:
Deutsche Securities (SA) (Proprietary) Limited
Date: 31/10/2006 08:10:25 AM Produced by the JSE SENS Department
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