Our core Supermarket business performed well. However, the Hypermarkets profit contribution was below expectation as a result of cost pressures on opening 5 new format stores within a 12 month period.

Supermarkets – We opened 3 new corporate stores during the six months and converted 2 corporate stores to Family franchise stores. During the second six months of the year we will open a further 4 new corporate supermarkets and convert another 3 corporate supermarkets to Family stores.

Family Franchise – We continue to expand our successful Family franchise format opening a further 6 new stores during the period including 2 conversions from corporate stores. During the second six months of the year we will open a further 11 new Family stores, including 3 conversions.

Hypermarkets – During the period we opened the Greenstone Mall Hypermarket in Edenvale and in September 2007 we opened our first Pick ‘n Pay store in Soweto.

Also during the month of September we opened our new revamped Norwood Hypermarket which is trading well. These new generation Hypers are all outperforming at sales level and are proving popular with a broad spectrum of customers.

Liquor stores – During the period, the division opened a further 9 liquor stores, with another 11 to come in the second half of the year.

Score
The operating performance of Score was in line with last year. We are busy finalising discussions with various stakeholders regarding the future development of Score and will be communicating these plans in due course.

Boxer
Boxer had another excellent trading period and opened 2 additional stores, one being in the Boxer Build Hardware format. During the second six-month period, Boxer intend opening a further 4 stores. The management of Boxer are very aware of the inflationary pressure on basic foods and are doing everything they can to minimise its impact on customers.

Turnover for the six month period at AUD410.2 million showed an increase of 1.3% over the same period last year. This is despite the fact that we sold 2 stores to a Franchisee during the period. Due to the weakening of the SA Rand to the Australian Dollar, turnover for the period at R2.4 billion showed an increase of 21.3%.

Franklins produced an operating profit before interest of AUD1.1 million for the six months which included a profit on the sale of 2 corporate stores to a Franchisee of AUD7.9 million as part of our planned strategic Franchise roll-out. In this regard, these 2 corporate stores together with 2 further independent stores were converted to the Franklins Franchise model, bringing the total number of Franchise stores to 6 at the end of the period. We are confident that these 6 stores will provide a good platform for the expansion of further Franchise outlets.

In addition to 1 new corporate store planned to open in the second six months of the year, Franklins have also started an extensive refurbishment programme including the expansion of certain ranges and fresh foods in-store.

We are confident that this refurbishment programme and the continued roll-out of franchise stores will lead to greater real sales growth and a significant improvement in the overall operating profitability of the Franklins chain.

The conversion of our accounting systems to SAP throughout the Group is ongoing. The Western Cape region and the corporate accounting office installation is now complete and conversions are underway in the Kwa-Zulu Natal and Eastern Cape regions. In the short time that SAP has been live in the Western Cape region, users have already experienced significant benefit from improved operating efficiencies.

During the six month period we started implementing our strategy, which we shared with you in April 2007. Highlights in this area include the opening of our new Longmeadow warehouse which over time will distribute more than 60% of inland store purchases allowing us to enhance our customer offering through improved quality and a better in-stock position.

It will also enable the company to more effectively manage its investment in stock. During the second half of the financial year we will share with you more exciting developments as we implement further aspects of our strategy.

We are confident that the Group will be able to achieve an acceptable growth in headline earnings for the full 2008 financial year.