Avior Capital Markets - Massmart Holdings Limited (10S2) Massmart | A scale game

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Avior Capital Markets

Atiyyah Vawda ...

Jiten Bechoo

Massmart | A scale game

MSM reported poor H1 '18 results, with adjusted HEPS down 20% yoy to 132cps (-42% yoy to 96cps after restructuring costs of R110m), following lower volumes and deflation. Management is rationalising its cost base to align to ongoing weak discretionary spend. Ultimately, we believe the Group needs more volumes to drive earnings growth. However, given the nascent retail environment, we forecast a modest rebound in margins over the next year following a leaner cost base and an effective supply chain.

03/09/2018 17 EN

Underlying

Massmart Holdings Limited

Massmart operates retail stores in nine formats in sub-Saharan Africa, aggregated into four reportable segments, focused on distribution of branded consumer goods for cash. Co.'s segment include: Massdiscounters, which provides general merchandise discounter and food retailer; Masswarehouse, which provides warehouse club; Massbuild, which provides home improvement retailer and building materials supplier; and Masscash, which provides food wholesaler, retailer and buying association. Co.'s four divisions operate in two principal geographical areas, South Africa and the rest of Africa.

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ZAE000152617 Johannesburg Stock Exchange South Africa

Provider

Avior Capital Markets

Avior is a globally recognised capital markets research and trading firm, with the broadest research coverage within the region, with 100+ SA and 20+ SSA companies under coverage. Avior services clients from offices in London, Cape Town and Johannesburg.

Our research quality is consistently recognised in local and global surveys, with 18 analysts currently rated in their respective sectors (FM 2017). Value add through in-depth, innovative, high quality and consistent research with comprehensive underlying fundamental modelling supported by regular analyst and roadshow interactions.

Avior has proven that by working closely with our clients we can mutually develop dominant positions in certain sectors, going from strength to strength. Avior has a dedicated ESG team, having been ranked #1 in Corporate Governance research since 2008.

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Analysts

Atiyyah Vawda

Jiten Bechoo

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Massmart | A scale game

Vermilion Booster Shots: Attractive bottom-fishing stocks

With a more favourable environment, MASSMART improves to Slightly Positive

Vermilion Booster Shots: Attractive bottom-fishing stocks

Tiger Brands | ESG | Pressed to execute

SA Investment Strategy | Review of January 2020 for SA investors: Coronavirus weighs on the ZAR

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