CEO statement at AGM

Massmart have released the CEO's statement from the AGM. There are some interesting pointers in there, perhaps "stuff" that would surprise you. First and foremost, CEO Grant Pattison points out that "Whilst the South African consumer environment is dominated by headlines of consumers' over-indebtedness, the reality is that household debt as a percentage of disposable income has improved to 2006 levels. At the same time, national inflation has been low for most of the past few years, and the employed have enjoyed above-inflation salary increases, all of these factors resulting in higher levels of disposable income." Surprised? At first I guess you could say that this does go against the grain of what we have been reading, but we all know what local company's have had to shell out in terms of a rising wage bill. So perhaps not so much of a surprise, if you gave it a little more thought.

He continued and said the following: "We have seen a relatively strong sales performance in the Massmart Group. At 20 November, being the first 21 weeks of the 2011 financial year, Massmart's total sales growth was 15.2% and comparable sales growth was 8.8%, with year-to-date sales inflation running at 0.8%." Sounds pretty good to me, perhaps not so much to others who are worried about the lofty valuation. As we often point out, the reason why the stock attracts a higher valuation relative to their peers is as a result of the big outside (foreign) shareholder(s).

Here are the sales numbers for the divisions of Massmart:

"Total and comparable sales growth in each Division is: