• Dangerous games

    Employers' body Neasa is playing a potentially dangerous game, says Terry Bell.

  • Rational thinking

    All players should first consider the net result of their actions, says Leopold Scholtz.

  • Telkom's property poser

    BEE may be hindering Telkom's plans to offload redundant real estate, says Gugu Lourie.

Data provided by iNet BFA
Loading...
See More

Massmart profit down as spending slows

Feb 28 2013 08:34 Reuters

(File) (Shutterstock)

Company Data

PICK N PAY STORES LIMITED [JSE:PIK]

Last traded 58.70
Change -0.7
% Change -0.01
Cumulative volume 593098
Market cap 28.61bn

Last Updated: 31/07/2014 at 04:25. Prices are delayed by 15 minutes. Source: McGregor BFA

SHOPRITE HOLDINGS LIMITED [JSE:SHP]

Last traded 162.00
Change -1.33
% Change -0.01
Cumulative volume 285061
Market cap 92.81bn

Last Updated: 31/07/2014 at 04:25. Prices are delayed by 15 minutes. Source: McGregor BFA

MASSMART HOLDINGS LIMITED [JSE:MSM]

Last traded 140.48
Change -1.21
% Change -0.01
Cumulative volume 101408
Market cap 30.50bn

Last Updated: 31/07/2014 at 04:27. Prices are delayed by 15 minutes. Source: McGregor BFA

Related Articles

Massmart sees margin pressure

Masstores hit with R7.5m TV licence fine

Massmart welcomes court ruling

Massmart profit misses the mark

Walmart shares drop on Mexico scandal

How Massmart, ABI scored in townships

 

Johannesburg - Massmart Holdings [JSE:MSM], the SA unit of Walmart Stores reported a 21% drop in first-half profit, hit by costs related to its deal with the world's biggest retailer.

Massmart, the high volume, low margin retailer that sells everything from televisions to groceries, said diluted headline earnings per share totalled 321.7 cents in the six months to end-December compared with 407.3 cents a year earlier.

A South African court last year ordered Massmart to double a planned fund to develop local suppliers to R240m to win regulatory approval for Walmart's acquisition.

Walmart paid $2.4bn for 51% of Massmart.

Excluding that cost, the company said headline EPS would have shown single-digit growth, reflecting tight margins from an aggressive cut-price strategy to double market share in food sales.

"As consumer expenditure slowed, we saw increased discounting amongst most retailers and the inevitable fight to hold or gain market share," the company said.

Massmart said last week that first-half earnings would likely drop by as much as 25%.

Massmart, South Africa's third-largest retailer by value, is expanding into food retailing, pitting it against dominant grocers such as Shoprite Holdings [JSE:SHP] and Pick n Pay Stores [JSE:PIK].

The Johannesburg-based company aims to take its grocery market share to as much as 20% in the next few years from 10% now.

Massmart said sales increased 14.7% to R36.1bn. It said sales for eight weeks to February 17, increased 11%.

"We are concerned that sales growth may be under some pressure for the remainder of the financial year," the company said.  

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

walmart  |  massmart holdings
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

A cash flow crunch often occurs in small businesses trying to balance cash coming in with cash going out. Watch this video to help you improve.
 
 

No need to keep up with the Joneses

Fin24 users provide their own personal tips on how to save money instead of trying to keep up with the Joneses.

 
 

Start saving...

Where can you stash your cash?
Time the key for retirement saving
Dummy's guide to saving
Save money with affordable account

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...