Retailer Massmart Earnings Up 28 pct

By Reuters Posted 24 August 2006 @ 01:11 pm EET     Print     Reprint     E-Mail     Comments

JOHANNESBURG (Reuters) - South African retailer Massmart said its annual headline earnings per share increased by 28 percent on record sales and it expects a solid first half.

Annual headline earnings -- the key profit measure for South African firms which excludes non-trading, capital and certain extraordinary items -- were 419.3 cents per share, the company said on Thursday.

Massmart said sales in the 52 weeks to end-June rose 15 percent to 30 billion rand and that it expected a good first half and a promising Christmas season.

The group, which has a portfolio of 10 wholesale and retail chains including Game, Dion and Makro, said its trading profit rose 37 percent to 1.341 billion rand.

"The record sales, profits, cash flow and profitability reported on today are testament to the effectiveness of Massmart's strategy of aggressive organic and acquisitive growth," Massmart Chief Executive Officer Mark Lamberti said in a statement.

Sales on a comparable-stores basis increased 5.5 percent, and sales before acquisitions climbed 8.3 percent.

Massmart said it was clear that the value of acquisitions as the primary driver of its sales and profit growth was declining.

"Instead, sales growth over the next three years will be increasingly driven by expeditious new store development, innovative merchandising and marketing, and the refinement of the positioning of the retail proposition to customers," Lamberti said.

Massmart shares were unchanged at 50.50 rand by 0742 GMT, outperforming a 0.28 percent weaker JSE Securities Exchange mid-cap index.

The group's shares have dropped 2.23 percent so far this year.

Massmart said it will pay a final dividend of 80 cents per share.