Massmart Holdings Limted. JSE: MSM

Massmart shares

Background of Massmart

  • Massmart Holdings is a South African-based regional management group owning nine wholesale and retail chains comprising more than 400 stores, with a focus on high volume and low cost distribution of products for sale to the lower and middle-income LSM markets. Operations are split into a portfolio of four divisions, namely Massdiscounters, Masswarehouse, Masscash and Massbuild.

  • Well-known brands under the group’s control include Game, Makro, Builders Warehouse, Dion Wired and Liquorland. The group was founded in 1990 with six Makro stores. Whilst the majority of the group’s stores are based in South Africa, Massmart also operates in 12 other countries in sub-Saharan Africa. It is the second-largest distributor of consumer goods in Africa and employs over 48 000 employees.

  • Massmart shares are available to buy under the Consumer Services – Retail sector of the Johannesburg Stock Exchange (JSE) with a market cap of almost R30 billion.

Massmart Shares Growth Driver

  • Massmart achieves competitive advantage through continual improvement of a high-volume, low-expense business model that enables low prices on an extensive portfolio of products. The model is further based on strategic and structural clarity, management depth, quality and diversity, geographic diversification and relatively lower risk.

  • Massmart has managed a good performance despite difficult economic conditions of late, increasing revenue and sales across all divisions. For the year ended 31 December 2015, total sales stood at R84 billion, an 8.3% increase from the previous year. As a result, operating profit increased by 14.1% to R2.3 billion.

  • This solid financial data was mirrored in the first six months of 2016, with sales increasing by 8.7% and operating profit increasing by 13.5%. Growth was supported by effective margin management and good expense control. Sales growth from stores outside South Africa was particularly good at 23.2%. Despite this, Massmart share price has been steadily declining.

  • Massmart’s key strategies include growing the group’s penetration of the food retail market through Makro, Masscash Retail and Game. The group is also targeting measured expansion in Africa through Builders Warehouse, Game and Masscash. Ecommerce also plays an integral part in Massmart’s growth strategy, with online sales rapidly growing through DionWired, Makro and Masscash Wholesale.

  • In the short term, Massmart has forecast that the economic environment will continue to constrain consumer spending, particularly within the general merchandise and home improvement categories. Food and liquor categories are however likely to outperform. Trade conditions at non-South African stores are unlikely to deteriorate, allowing the group to buy into its geographic diversification drive.

Massmart Investor Tip

  • Massmart has managed to grow sales and pay increasing dividends throughout a difficult consumer spending environment. The live online stocks chart shows that Massmart share price has however not experienced any growth over the past five years, and has in fact dropped from a high of R205.04 in 2013 to R131 by August 2016. A competitive business model should however bode well for Massmart share price as consumer spending starts to pick up. Investors will buy Massmart shares with the hope of long term growth.

Massmart Major Shareholders

Main Street 830 (Pty) Ltd. (Walmart), Aberdeen Asset Management Group, Public Investment Corporation and Westwood Global Investments LLC.

  • Sector

    Consumer Staples

  • Industry

    Retail – Consumer Staples

  • Sub industry

    Mass Merchants

How to buy Massmart Group Shares

  • Massmart : How to buy Massmart Group Shares Online

    We have made it simple to buy JSE listed firm shares online. The easiest way to buy Massmart Group shares or stocks is to; start by submitting the ‘BUY THIS SHARE’ form. Next, one of our experienced and certified stock brokers will personally get in contact with you to discuss your custom stock request. Finally, a stock advisor will confirm the amount of shares you are looking to invest in Massmart Group and assist you with the setup and management of your stock portfolio account.

  • Here are the steps you must follow to Buy / Purchase Massmart Group shares with utmost confidence:

    1. Start by Filling in the BUY THIS SHARE form.
    2. Insert your name, email, telephone number and monthly remuneration.
    3. Then, Indicate the amount you are looking to invest in Massmart Group.
    4. Click the “ INVEST NOW” button
    5. Once we have received your info, a dedicated stock advisor will personally call you back to discuss your personal share request.
    6. Lastly, your newly appointed personal stock advisor will handle all account setups and reporting as stipulated by the financial services board of South Africa (FSB)
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