We show the extent to which the two under-performing units (MassDiscounters and MassCash) have been a drag on MSM’s group performance. We believe that these units face structural challenges and argue that a business combining only the two well-performing, strategically sound business units (MassWarehouse and MassBuild) may offer a more compelling long-term growth story. We show that while MSM may not have delivered on Walmart’s (WMT) initial objective to use it as a vehicle to grow into Africa, MSM is comfortably achieving WMT’s peculiar ROI target, and there may therefore be little impetus for any dramatic change in growth trajectory. In our view, the KPI’s used by the strategic shareholder may not be aligned with the interests of other shareholders.
