“Headline earnings increased by 29.9 per cent compared to 19.9 per cent at 52 weeks while headline EPS increased by 29.5 per cent compared to 19.5 per cent at 52 weeks over the prior year,” Massmart said in a statement.
The total Group sales growth for the 53-week period ended 29 December 2013 was 9.8 per cent. For the 52-week period, total and comparable sales growths were 7.5 per cent and 3.8 per cent respectively.
The Group’s product inflation was 2.7 per cent for the year suggesting real comparable volume growth of 1.1 per cent. General Merchandise’s inflation slowed to 0.1 per cent, Food and Liquor’s inflation slowed to 4.1 per cent and Home Improvement inflation increased to 3.7 per cent.
Massmart said sales in their African businesses represented 7.7 per cent of total sales and increased by 16.6 per cent in Rands and 10.9 per cent in local currencies.
“During the year, 15 stores were closed, one store was sold and 35 stores were opened, resulting in a total of 376 stores at December 2013. Net trading space increased by 4.8 per cent to a total of 1,481,308m2,” Massmart said.
The Group’s gross profit of 18.46 per cent is lower than that of the prior year of 18.65 per cent.
“This is as a result of a combination of an increased contribution from Game Africa and an improved margin performance in Massbuild; both of which were offset by the difficult trading conditions in Wholesale Food, a greater overall Food contribution at a lower margin and General Merchandise margins in Game SA being under pressure throughout the year”.
Total expenses (excluding foreign exchange movements and Walmart transaction, integration and related costs) increased by 10.4 per cent over the comparable 52-week period. Employment costs, the Group’s most significant cost, increased by 14.3 per cent for the 52-week period. The impact of the Group’s continued investment in capacity and growth can be seen in the 10.6 per cent higher depreciation and amortisation charge and the 10.8 per cent increase in occupancy costs.
The company said these increases relate to the opening of the Massbuild National Distribution Centre and 35 new stores. During the year new store pre-opening costs amounted to R108.5 million (2012: R70.3 million).
Comparable expenses increased by 7.2 per cent. During the prior year the Group incurred a cost of R140.0 million relating to increasing the value of the Supplier Development Fund as required by the Competition Appeal Court.
Included in operating profit are net realised and unrealised foreign exchange translation gains of R67.8 million (December 2012: R231.6 million loss). During the year the Rand weakened against the Group’s basket of African currencies.
The loss in the prior year related in most part to the devaluation of the Malawian Kwacha.
Excluding foreign exchange movements, earnings before interest, tax, depreciation and amortisation (EBITDA) of R2.9 billion increased over the prior year by 9.0 per cent (52 weeks: 3.2 per cent).
Net interest paid of R255.1 million increased as a result of the Group’s capital expenditure programme, including the acquisition of certain key properties, and some inefficiencies in working capital levels.
At R4.3 billion, the Group’s average borrowings are higher than the prior year’s figure of R3.2 billion and approximately R600.0 million of this relates to acquired properties.
Massmart declared a gross final cash dividend of 275.00 cents per share in respect of the period ended 29 December 2013.
The dividend has been declared out of income reserves and will be subject to the Dividend Tax rate of 15 per cent which will result in a net dividend of 233.75 cents per share to those shareholders who are not exempt from paying Dividend Tax.