SOUTH AFRICA – Massmart said on Thursday it remained concerned about the deteriorating South African economy and expected its business to remain under pressure during the year ahead.

“As with most local retailers, Massmart’s sales growth slowed in the latter period to December 2015.

The impact of the drought across large parts of SA is likely to be severe, potentially causing the price of a basic monthly shopping basket to increase.

“The weaker rand and declining upper-income consumer confidence levels will adversely impact sales of large appliances, hi-tech, multimedia and home improvement products,” the company said.

Massmart is the owner of Makro, Game, Builders Warehouse and Cambridge Foods.

It consists of a managed portfolio of four divisions, each focused on high-volume, low-margin, low-cost distribution of mainly branded consumer goods for cash, in 13 countries in sub-Saharan Africa.

In the year to December 27 2015, Massmart reported a 1.3% rise in headline earnings per share (HEPS) to 516.3c compared with the year-earlier period.

Total group sales increased 8.4% and operating expenses rose 9.3%.

Group operating profit, excluding foreign exchange movements and interest, was up 14.1% at R2.3bn.

Massmart declared a gross final cash dividend of 112.16c per share.

Massmart’s share price has declined by 40% in the past year. At the close of the JSE on Wednesday, shares were at R99, valuing the company at about R21.5bn.

February 29, 2016;