JSE:MSM

Stock Analysis Report

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Executive Summary

Massmart Holdings Limited operates as a retail and wholesale distributor.


Snowflake Analysis

Fair value with moderate growth potential.


Similar Companies

Share Price & News

How has Massmart Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MSM's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-1.7%

MSM

3.4%

ZA Consumer Retailing

-0.7%

ZA Market


1 Year Return

-68.3%

MSM

-21.3%

ZA Consumer Retailing

-23.8%

ZA Market

Return vs Industry: MSM underperformed the ZA Consumer Retailing industry which returned -21.1% over the past year.

Return vs Market: MSM underperformed the ZA Market which returned -23.6% over the past year.


Shareholder returns

MSMIndustryMarket
7 Day-1.7%3.4%-0.7%
30 Day-13.4%-2.3%-0.6%
90 Day-49.0%-8.8%-8.1%
1 Year-68.3%-68.3%-19.2%-21.3%-13.0%-23.8%
3 Year-80.4%-81.3%-16.6%-22.2%0.3%-18.8%
5 Year-83.8%-85.2%1.6%-10.5%9.9%-17.5%

Price Volatility Vs. Market

How volatile is Massmart Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Massmart Holdings undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MSM (ZAR21.37) is trading below our estimate of fair value (ZAR50.5)

Significantly Below Fair Value: MSM is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: MSM is unprofitable, so we can't compare its PE Ratio to the Consumer Retailing industry average.

PE vs Market: MSM is unprofitable, so we can't compare its PE Ratio to the ZA market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate MSM's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: MSM is good value based on its PB Ratio (1x) compared to the ZA Consumer Retailing industry average (4x).


Next Steps

Future Growth

How is Massmart Holdings forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

77.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MSM is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (9.5%).

Earnings vs Market: MSM is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: MSM's is expected to become profitable in the next 3 years.

Revenue vs Market: MSM's revenue (3% per year) is forecast to grow slower than the ZA market (8.5% per year).

High Growth Revenue: MSM's revenue (3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MSM's Return on Equity is forecast to be low in 3 years time (10.8%).


Next Steps

Past Performance

How has Massmart Holdings performed over the past 5 years?

-25.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MSM is currently unprofitable.

Growing Profit Margin: MSM is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: MSM is unprofitable, and losses have increased over the past 5 years at a rate of -25.4% per year.

Accelerating Growth: Unable to compare MSM's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: MSM is unprofitable, making it difficult to compare its past year earnings growth to the Consumer Retailing industry (6.2%).


Return on Equity

High ROE: MSM has a negative Return on Equity (-27%), as it is currently unprofitable.


Next Steps

Financial Health

How is Massmart Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: MSM's short term assets (ZAR18.6B) do not cover its short term liabilities (ZAR24.4B).

Long Term Liabilities: MSM's short term assets (ZAR18.6B) exceed its long term liabilities (ZAR11.1B).


Debt to Equity History and Analysis

Debt Level: MSM's debt to equity ratio (77.5%) is considered high.

Reducing Debt: MSM's debt to equity ratio has increased from 65.3% to 77.5% over the past 5 years.

Debt Coverage: MSM's debt is well covered by operating cash flow (62.6%).

Interest Coverage: MSM is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet


Next Steps

Dividend

What is Massmart Holdings's current dividend yield, its reliability and sustainability?

0.91%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate MSM's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate MSM's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if MSM's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if MSM's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: MSM is not paying a notable dividend for the ZA market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of MSM's dividend in 3 years as they are not forecast to pay a notable one for the ZA market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

0.8yrs

Average management tenure


CEO

Mitch Slape (51yo)

0.58

Tenure

R6,503,000

Compensation

Mr. Mitchell Slape, also known as Mitch, had been the Chief Executive Officer and Executive Director of Massmart Holdings Ltd. since September 1, 2019. He was the Chief Operating Officer and Executive Vice ...


CEO Compensation Analysis

Compensation vs Market: Mitch's total compensation ($USD368.52K) is below average for companies of similar size in the ZA market ($USD548.04K).

Compensation vs Earnings: Insufficient data to compare Mitch's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Mitchell Slape
CEO & Executive Director0.58yrR6.50mno data
Mohammed Abdool-Samad
CFO & Executive Director0.75yrR12.74mno data
Richard J. Inskip
Group Chief Information Officer and Group Supply Chain & Logistics Executive3.33yrsno datano data
Louise Lackay-Walters
Group Chief Ethics & Compliance Officer0.83yrno datano data
Natasha Pramchand
Interim Group General Counsel0.33yrno datano data
Jane Bruyns
Group Human Capital Executive5yrsno datano data
Llewellyn Walters
Chief Executive of Massmart Retailno datano datano data
Dhari Moodley
Chief Audit Executiveno datano datano data
Varsha Dayaram
Group Financial Services Executive0.75yrno datano data
Kevin Vyvyan-Day
Divisional Chief Executive of Masscashno datano datano data

0.8yrs

Average Tenure

49.5yo

Average Age

Experienced Management: MSM's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Mitchell Slape
CEO & Executive Director0.58yrR6.50mno data
Mohammed Abdool-Samad
CFO & Executive Director0.75yrR12.74mno data
Kuseni Dlamini
Independent Non-Executive Chairman6yrsR2.31m0.0046% ZAR212.6k
Nolulamo Nobambiswano Gwagwa
Independent Non-Executive Director13.42yrsR1.14m0.0045% ZAR209.3k
Phumzile Langeni
Lead Independent Director1yrR1.70mno data
John Suarez
Non-Independent Non-Executive Director1.17yrsno datano data
Lindiwe Mthimunye-Bakoro
Independent Non-Executive Director1.17yrsR720.00kno data
Olufunke Ighodaro
Independent Non-Executive Director2yrsR1.09mno data
Charles Redfield
Non-Executive Director0.17yrno datano data
Susan Muigai
Non-Independent Non-Executive Director3yrsno datano data

1.2yrs

Average Tenure

51.5yo

Average Age

Experienced Board: MSM's board of directors are not considered experienced ( 1.2 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Massmart Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Massmart Holdings Limited
  • Ticker: MSM
  • Exchange: JSE
  • Founded: 1990
  • Industry: Hypermarkets and Super Centers
  • Sector: Consumer Retailing
  • Market Cap: R4.652b
  • Shares outstanding: 217.67m
  • Website: https://www.massmart.co.za

Number of Employees


Location

  • Massmart Holdings Limited
  • Massmart House
  • 16 Peltier Drive
  • Sandton
  • Gauteng
  • 2157
  • South Africa

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MSMJSE (The Johannesburg Securities Exchange)YesOrdinary SharesZAZARJul 2000
MMRT.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJul 2000
MMRT.YOTCPK (Pink Sheets LLC)UNSPONSORED ADSUSUSDOct 2008

Biography

Massmart Holdings Limited operates as a retail and wholesale distributor. It operates through four divisions: Massdiscounters, Masswarehouse, Massbuild, and Masscash. The Massdiscounters division operates discount retail stores that offer general merchandise, fresh food, groceries, and liquor, as well as technological solutions in multimedia and hi-tech under the Game and DionWired retail formats. This division operates 173 stores in South Africa, Botswana, Ghana, Kenya, Lesotho, Malawi, Mozambique, Namibia, Nigeria, Tanzania, Uganda, and Zambia. The Masswarehouse division operates warehouse stores under the Makro and The Fruitspot names that sell food, liquor, and general merchandise for retail, commercial, and wholesale customers; and fresh and cut fruit and vegetables, as well as provides crowd-sourced final mile delivery services to individuals and corporates. This division operates 22 stores in South Africa. The Massbuild division operates DIY, home improvement, and building materials stores under the Builders Warehouse, Builders Express, Builders Superstore, and Builders Trade Depot brands. This division operates 118 stores in South Africa, Botswana, Mozambique, and Zambia. The Masscash division engages in the wholesale of food and cosmetic products under the CBW, Trident, Jumbo Cash & Carry, Sunshine, Eureka, Saverite, and Shield brands; and operation of retail outlets under the Cambridge Food and Rhino brands. This division operates 130 stores South Africa, Botswana, Lesotho, Mozambique, Namibia, Swaziland, and Zambia. It also engages in the management, investment, and finance businesses; and property holding business. The company was founded in 1990 and is headquartered in Sandton, South Africa. Massmart Holdings Limited is a subsidiary of Main Street 830 Proprietary Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/05/31 18:53
End of Day Share Price2020/05/29 00:00
Earnings2019/12/29
Annual Earnings2019/12/29


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.