Loading...
See More

Massmart profit misses the mark

Aug 22 2012 08:16 Reuters

Company Data

PICK N PAY STORES LIMITED [JSE:PIK]

Last traded 49
Change -1
% Change -1
Cumulative volume 1156959
Market cap 0

Last Updated: 01-04-2015 at 04:15. Prices are delayed by 15 minutes. Source: McGregor BFA

MASSMART HOLDINGS LIMITED [JSE:MSM]

Last traded 146
Change -4
% Change -2
Cumulative volume 440768
Market cap 0

Last Updated: 01-04-2015 at 04:15. Prices are delayed by 15 minutes. Source: McGregor BFA

SHOPRITE HOLDINGS LIMITED [JSE:SHP]

Last traded 164
Change 0
% Change 0
Cumulative volume 795784
Market cap 0

Last Updated: 01-04-2015 at 04:15. Prices are delayed by 15 minutes. Source: McGregor BFA

Related Articles

Walmart shares drop on Mexico scandal

Walmart is the new gold

Vavi attacks Walmart deal

Walmart advent a boon to SA shoppers

Massmart in talks to enter Kenya

How Massmart, ABI scored in townships

 

Johannesburg - Walmart’s South African unit Massmart Holdings [JSE:MSM] posted a 6.1% rise in full-year profit, falling well short of expectations as weak selling prices and rising costs weighed.

The nation’s third-largest retailer by market value said diluted headline earnings per share were 619 cents in the year to end-June, well-below a 656 cents in Reuters poll of 13 analysts.

Stripping out costs related to Walmart’s $2.4bn takeover of a 51% stake in Massmart, headline EPS increased 30.3 cents.

Consumer spending is improving in Africa’s biggest economy due to decades-low interest rates and above-inflation wage hikes, but the outlook is uncertain due to high debt levels and chronic unemployment.

South African retail sales jumped 8.3% year-on-year May, official data showed, beating the 4.7% growth economists had expected.

But Massmart has failed to fully capitalise on improving consumer spending as it spends a chunk of its cash expanding into food retail to take on established players such Shoprite Holdings [JSE:SHP] and Pick 'n Pay Stores [JSE:PIK] .

The company was also hit by weak selling prices, which averaged 1.8%, and above-average increase in the prices of electricity.    

Massmart said sales rose 15.6% to R53bn.

Rival Shoprite also missed forecasts with a 20% rise to 607 cents in full-year profit on Tuesday, as nagging unemployment and rising debt levels put pressure on consumer spending.

Shares in Massmart are little changed so far this year, underperforming a 10% rise in the JSE Top 40 - (Tradeable) [JSE:J200] index.


* Follow Fin24 on FacebookTwitter and Google+.


 
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

Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.
 
 

The Fast and Furious R40 million

With the Fast and the Furious 7 hitting South African cinema’s this April, all eyes are on the cars and we’re in for a treat!

 
 

Luxury living

This is the most expensive burger in the world!
Exclusive food items that WILL break the bank
Top 10 most expensive homes in the world
You can permanently live on a ship and sail the world!

Money Clinic

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

Voting Booth

How will you manage Vodacom’s price hike for contracts?

Previous results · Suggest a vote

Loading...