Cape Town - Shrugging off the effects of a stronger rand, diversified mass market retailer and wholesaler Massmart had pencilled in record sales and profit for the full year to June, it said in a trading statement this week.

The appreciating rand had a damping effect on subsidiary Massdiscounters, made up of Dion and Game, in the second half of the financial year.

But this would be felt only in Massdiscounters' performance in the six months to June. For the full year the division would still produce record sales, profit and profit before tax.

At group level the diversified retailer was expected to show profit growth in excess of sales growth in both the second half and the full year to June.

This followed healthy real sales growth for the 43 weeks to April, when sales jumped 26 percent and sales before acquisitions grew 22 percent.

Executive chairman Mark Lamberti said: "Based on an average exchange rate of R8 to the dollar, budgets for the year to June 2004 reflect exciting progress towards earnings growth and margin objectives."

Of the two Massdiscounters chains, Game generated most of Massmart's foreign earnings.

Lamberti said that although Game's foreign stores were trading well in their local currencies, the substantial strengthening of the rand continued to reduce their reported rand sales and margins.

It also increased the unrealised losses on the translation of the foreign net assets into rand values.

As a result, the Massdiscounters division would produce significantly lower profit before tax in the six months to June compared with a year ago - despite a robust performance from the South African stores.

But for the full year to June, the division would still pull in record sales, profit and profit before tax.

For the financial year to June Massmart achieved record sales growth of 44 percent to R16.7 billion - a solid year for most listed food and clothing retailers.

Massmart shares ended 20c higher at R18.20 in Johannesburg yesterday.