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The group said South African store sales increased 2% while SA store sales increased 0.5%.
rand's total sales from its ex-SA stores increased by 1%. However, the group said the results fell 2.2% with the inclusion of Shield, one of its brands, in the results and same-store sales fell 3.9% . "Mbadmart no longer includes Shield with the group's sales figures, but includes only the Shield margin," the group said.
Ron Klipin, Senior Analyst at Cratos Capital, said Mbadmart's total sales were up 1.9%, which was a consensus of 2%, with product deflation of 0.7%. "The main players have probably been Makro, followed by Builders Warehouse, but showing a slower growth rate because of the pressure on disposable income," said Klipin. "The stock price has rebounded sharply after the update."
Mbadmart is a South African retail and wholesale distributor, with 381 stores locally and 30 in the rest of the sub-Saharan region. Its brands include Game, Cambridge Food, Shield, Makro, Jumbo, Shield, Rhino Cash and Carry and Saverite. Klipin said the game was likely to be under pressure from margins as the demand for durable and semi-durable goods should be dull.
"Deflation is another negative factor in the update." The diversified business model has produced a fair result in a very difficult environment, with African currencies probably weighing on profits, "said Mr. Klipin.Action Mbadmart rose 7.98% on the JSE yesterday to close at R115.The group is expected to release its half-year results next month.
– COMPANY REPORT
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