Massmart CEO discusses results, COVID-19 impact & turnaround efforts

Massmart CEO, Mitch Slape, joined CNBC Africa to discuss the company's full-year results, which saw a widening of headline earnings loss by 35 per cent. Despite the challenges posed by COVID-19, Slape shared insights into the company's turnaround efforts and optimization program. He emphasized three key steps that Massmart has been focusing on over the last 18 months: stabilizing the business, focusing on core assets for market leadership, and investing in growth. The CEO pointed out that the turnaround plan is beginning to show positive signs, with strong statistics in the second half of 2020, such as an increase in profit before interest and tax, gross profit margin, and a decrease in expenses. These improvements have been driven by various initiatives, including portfolio optimization, such as divesting non-core assets like Dionwired, Mass Cash Retail stores, Cambridge, Rhino stores, and Mass Fresh production facilities. Slape highlighted the impact of COVID-19 on the business, estimating a loss of approximately 6.1 billion rand in sales due to restrictions. However, he noted that the pandemic has also helped focus the business and accelerate turnaround programs. With restrictions being lifted since March 1, Massmart is poised for strong performance going forward. The CEO shared positive portfolio performance in the nine weeks leading up to February, with strong growth in DIY, wholesale, online, and general merchandise businesses. Looking ahead, Slape emphasized the focus on investing in core assets and growing the business to position Massmart as a growth story. While the timeline for the return of dividends remains uncertain, the company's priority is on strengthening key business segments and e-commerce investments to drive future profitability.