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Massmart half-year profit down 25%
Massmart half-year profit down 25%

Massmart half-year profit down 25%

RETAILER NEWS - Aug 29th 2014, 09:52

Retailer Massmart reported a 25.2% fall in half-year profit on Thursday as debt-laden consumers battling rising living costs cut back on spending. 

Massmart said diluted headline earnings per share totalled 166.4c in the six months ended June compared with 222.6c a year earlier.

Sales rose 10% to R35.7bn ($3.36bn) for the 26 weeks ended June 29.

With the exception of Game SA, the group achieved most of its objectives. Two divisions — Massbuild and Masscash — grew trading profit ahead of sales, while Makro’s growth in trading profit was slightly below sales growth due to new stores in the year-earlier period.

Massdiscounters was compromised by continued soft sales in Game SA, resulting in significantly lower trading profit compared with the year-earlier period.

Higher net interest paid from funding several property acquisitions and an adverse movement in foreign exchange resulted in headline earnings decreasing by 25.5%, while headline earnings declined by 5.7%, excluding foreign-exchange movements, the group said.

Total operating expenses (excluding foreign-exchange movements) increased by 11.3%, with comparable operating expenses increasing by 7.7%. Employment costs, the group’s largest cost category, increased by 12.9%.

Retailers are among the worst performing stocks in Johannesburg over the past 12 months, reflecting investor fears about the impact of tepid economic growth, rising fuel prices and high household debt on consumer spending.From DFM Publishers (Pty) Ltd 

Read more about: south africa | massmart | makro | game sa

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