Massmart sales in 9.7% slump for 26 weeks
MASSMART said yesterday the national lockdown resulted in a 9.7 percent decline in its total sales for the 26 weeks to June 28 compared with a year earlier.
Massmart – the owner of Game, Makro and Builders Warehouse – reported sales of R39.6 billion compared with R43.8bn a year earlier, with a similar decline in comparable-store sales.
The company reported a R1.2bn net loss, compared with an R80 million loss a year earlier. The headline loss was R1.1bn compared with a headline loss of R800m for the same period last year. The group also reported a trading loss of R266.6m.
Massmart parked its interim dividend to preserve cash.
“Due to the headline loss reported and the need to preserve cash, as a result of the uncertain economic outlook, no interim dividend has been declared. No interim dividend was declared in June 2019,” said the group.
Massmart, which closed 23 DionWired stores during the period, said the restructure costs associated with the store closures and the potential closure of 11 Cambridge and Wholesale Cash & Carry stores resulted in additional costs of R47.4m.
“We have also impaired certain Game, Cambridge and Wholesale Cash & Carry stores, resulting in impairment expenses of R55.5m during the period,” said the group.
Employment costs fell 2.2 percent compared to an increase of 1.1 percent a year earlier, due to the closure of DionWired stores, recruitment freezes and the impact of the Temporary Employer/Employee Relief scheme and Skills Development Levy relief.
The company paid once-off bonuses of R12m to front line staff during April in appreciation of their commitment during the most severe period of the lockdown.
Massmart said occupancy costs fell 6.4 percent during the period, mainly as a result of rental relief and lower utility costs due to the lockdown.
“Rental re-negotiation benefits will be realised from the second half of the year and beyond,” said the group.