By Spy Uganda
Kampala: Massmart Holdings Limited a South African firm that owns Game Stores has announced that it’s selling 14 stores in East and West African countries, including Uganda, as the group losses narrowed during the half year ended June 2021.
Among the areas the company has registered huge losses include Uganda. Currency devaluations, low commodity prices and high inflation also saw Africa’s retail giant Shoprite last week announce plans to exit Uganda.
Speaking during the group’s virtual financial results presentation on Friday, Massmart Chief Executive, Mitchell Slape said the company was currently in discussion with potential purchasers to take over the stores.
“We have reached the conclusion that the performance and complexity in running the 14 stores in five markets in the east and west Africa is something frankly that we needed to address,” said Slape. The decision to sell Game stores in the east and west Africa comes a year after a review of the group’s portfolio outside of the Southern African Development Community.
Massmart recognized an impairment expense of R597.7 million, the majority of which related to Game’s SAP system software asset. The group said Game’s total sales for the 26 weeks of R7.6 billion was 8.7 percent lower than June 2020, while comparable-store sales contracted by 6.9 percent.
“Foot traffic in many super and regional malls and retail centers remained constrained compared to pre-pandemic levels, as consumers preferred local and more convenient shopping options in light of Covid-19 infection concerns,” Slape said.
Group sales for the 26-weeks ended June 27 of R41.3bn represented total growth of 4.4 percent and comparable-store sales growth of 4.8 percent. Gross margin increased by 43 basis points, and expenses decreased by 1.8 percent resulting in a trading profit of R444.2m, an increase of 266.6 percent from the previous year.
The group incurred a net loss of R1.072bn, an improvement of 8.1 per cent from the prior period loss of R1.166.8 bn. The headline loss amounted to R645.4m, a 40.8 percent improvement from the prior period headline loss of R1.09bn. Massmart withheld the dividend payments due to the headline loss reported and the need to preserve cash, “as a result of the subdued economic outlook as well as the continued evaluation of the civil unrest impact, no interim dividend has been declared”. (desertrose.com)
