Massmart sees better days ahead

Johannesburg - Wholesale retailer Massmart posted a 19.9% drop in first-half profit as consumers spent guardedly after nearly a million job losses last year and high debt levels.

Massmart, which runs chain stores such as Game and Makro, said on Thursday headline earnings per share fell to 347c in the six months to end-December, in line with its forecast range of a 16c-24c fall.

The company said sales rose 6.1% to R24.154bn boosted by new stores. Comparable store sales were down 0.5%.

Massmart, which maintained an interim dividend at 252c per share, expects consumers to open their purses more in second half with sales for the 34 weeks to Feb 21 up 6.7%.

"These recent sales trends suggest that the worst is behind us," the company said, adding it could comfortably grow operating profits in the second half and even for the 2010 financial year.

- Reuters