Massmart targets disposal of further assets
Massmart, the owner of brands including Game, Makro, Builder’s Warehouse on Monday (8 March) reported total sales for the 52-weeks ended 27 December 2020 of R86.5 billion representing a decline of 7.7%, with a 7.5% decline in comparable store sales.
Sales for the group were impacted by the Covid-19 pandemic and more specifically by restrictions on the sale of certain product categories, it said.
Massmart reported a net loss of R1.8 billion for the period, compared to a loss of R1.3 billion during the same period in 2019, while reporting a headline loss of R900 million for the period compared to a headline loss of R1.2 billion during the same period in 2019.
A headline loss per share improved 19.3% from the prior period.
A trading profit of R1.17 billion was reported for the period representing an increase of 5.5% from the R1.11 billion trading profit reported in 2019.
Due to the headline loss reported and the need to preserve cash, as a result of the uncertain economic outlook, no final dividend has been declared. No final dividend was declared in December 2019, Massmart said.
For the year, Massmart said it incurred total retrenchment costs of approximately R132.5 million, relating to the closure of the 23 DionWired stores, the previously announced potential closure of 11 Masscash stores, the reorganisation of the Game store level operating model and the reorganisation of certain corporate support functions into centralised ‘Centres of Excellence’.
In January 2020, Massmart announced a portfolio optimisation initiative as one of six work streams in the group’s turnaround plan. To date this has informed the closure of DionWired stores and the decision to divest a number of underperforming Masscash stores.
The process continues as an ongoing part of the turnaround of the group’s South African store portfolio and will be extended, during the second quarter of 2021, to include a review of stores outside SADC.
“We are also now moving beyond our turnaround imperative to align the group portfolio to our strategic objective to prioritise investment in core and high returning trading assets,” it said. Massmart has appointed Barclays to facilitate the disposal of its Cambridge Food, Rhino and Massfresh assets.
Further update announcements will be made in due course, it said.
Massmart meanwhile, reported total sales of R13.9 billion – a decline of 6.6% – for the nine weeks to 28 February 2021 in a further trading update “This decline is attributed mainly to the liquor ban in January and delayed reopening of schools,” it said.
Read: Massmart says Covid-19 restrictions cost the group R6 billion in lost sales
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