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Massmart - The Results Of Annual General Meeting And The

Release Date: 28/11/2001 16:23
Code(s): MSM
Wrap Text
Executive Chairman's Statement
Massmart Holdings Limited
(Registration number 1940/014066/06)
ISIN: ZAE00029534   Share Code: MSM
("Massmart")

THE RESULTS OF ANNUAL GENERAL MEETING AND THE EXECUTIVE CHAIRMAN'S STATEMENT Results of Annual General Meeting
At the Massmart annual general meeting held today at Massmart
House, Sunninghill, Johannesburg, all proposed ordinary and
special resolutions were passed with the necessary majorities. Executive Chairman's Statement Environment
Indicators on the state of the South African retail environment are mixed.
The 2001 third quarter report on consumer confidence by the
Stellenbosch Bureau for Economic Research indicates that while
upper income consumer confidence recovered slightly as a
result of the June and September interest rate reductions,
lower income consumer confidence was dampened by unemployment.
Both groups are now equally pessimistic at a lower level than the second quarter.
Statistical Services reported nominal retail sales growths of
10.9% in July and 7.4% in August. The Retail Liaison
Committee reported nominal retail sales growths of 9.6% in July, 10.2% in August and 8.2% in September.
Leading retailers are reporting growth rates in excess of those that I have mentioned. Performance
Massmart's trading and growth strategies are proving to be resilient within this environment.
Each of the divisions are making progress with their strategic
and operating plans, divisional and group management continues
to be strengthened and the focus on delivering specific value
propositions to our broad range of customers in seven
countries throughout Southern Africa is higher than ever.
Noteworthy achievements in the current year are the better
than expected reopening of the Makro Woodmead store on the
25th October and a strong growth of sales and profitability in Game and Dion.
The results for the 22 weeks to the 24th of November are
pleasing. Sales growth before acquisitions grew 11% with
total sales growth including acquisitions in excess of 27%. Like-for-like sales grew 12%. Acquisitions
Jumbo is being run as a fifth division of Massmart, while the
22 Browns and Weirs stores are being merged with CCW. The
integration of the acquired businesses into Massmart is proceeding according to plan
In terms of the acquisition agreement, Massmart had the right
to put the small three-outlet Sip `n Save chain back to the
sellers by December 2001. Following an in-depth assessment we
have exercised the put and will reverse R7m of the purchase price plus interest. Delay in the release of the Annual Report
The delay in the release of the annual report was occasioned
by the final approval of the Jumbo Browns and Weirs
acquisition by the Competitions Tribunal, received on the 21st September 2001.
It is our intention in future to release the Annual Report around the end of September. Wooltru
On the 23rd November 2001, Wooltru Limited ("Wooltru") advised
that sufficient progress had been made to enable the Wooltru
board to commit to the unbundling of 100% of Wooltru's shares in Massmart sometime after the 8th January 2002.
We welcome this development, which will increase Massmart's
share liquidity on the Johannesburg Stock Exchange from approximately 20% to approximately 60%. Prospects
While there is no doubt that South Africa will be affected by
the decline in the economic growth of most international
economies and the exacerbating effects of the terrorist
attacks on the United States, the economy is in a far better
position than most emerging and many developed economies.
Massmart's divisions - particularly Massdiscounters - are in a
better state than at this time last year and the acquisitions
will add a significant tranche of sales and earnings.
In the absence of deterioration in Southern African economic
conditions, we continue to anticipate earnings growth in
excess of sales growth and the retail sector, in line with the Group's expectations on listing.
Our results for the six months to December will be announced
on the 25th February, to be preceded by a trading announcement
on the six months to December, on or before the 7th January 2002. 28 November 2001 Johannesburg

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