Massmart heads a pack of very impressive companies, even though it's a retailer and that sector has been coming under pressure for at least part of the year under review.

It seems to be a case of an impressive track record and good management trumping unfavourable sectoral factors, when it comes to investment prospects. The point about really good companies is that they don't make excuses. They take cyclical factors and the occasional unpleasant surprise as a given, and ensure that their strategy and business model are sufficiently robust and flexible to deal with whatever comes their way.

CEO Grant Pattison (35) took over from Mark Lamberti (57) in June last year, and he would be the first to credit this achievement to the momentum built up over Lamberti's 20 years in the hot seat.

Unusually for the sector, Pattison is a retail CEO who had no intention of going into retail. He trained as an electrical engineer and spent four years at Anglo American - on the mines and at head office as a management trainee - and Impala Platinum, followed by two years in consulting with the Monitor Group.

Pattison joined the company a decade ago. His first piece of work for Lamberti was "to help him reduce Massmart's strategy to writing". Since then they have spent a lot of time together. "We have a great belief in the value of debate - it's part of the Massmart culture," says Pattison. "We believe in clarity over certainty. You have to ignore the temptation to make decisions quickly, merely in order to get them over and done with."

Pattison started work as CEO off a high base. Since the listing of Massmart in July 2000, the retailer's story has been one of sustained success. In 2006, for instance, sales were up 160% to over R30bn, and cash flow was at R1,8bn, up 452% over five years and 45% on the previous year.

In March this year, for the first time in 37 consecutive financial half-years, Massmart was unable to announce real sales growth exceeding 8%. Instead it achieved modest real growth of 3,1%, in a year when there were no acquisitions. Sales grew from R18bn to R20bn, while profit before interest and tax was up to R1,2bn, from R1bn.

In hard times for retailers, the best route to growth is to gain market share. If the cake isn't getting much bigger, you need to make sure you get more of it.

And Makro, to name just one Massmart division, has been gaining market share, particularly in brown goods - audio and plasma - and more recently in white goods. According to Nedcor Securities analyst Syd Vianello: "That is all about slick marketing. It's having the right product in the right place at the right price - and convincing the customer that your pricing is better... When times get tough, consumers look for perceived value, and they will pay cash for it. This business model is all about value."

The store network - Massmart brands include Makro, Dion, Game and Jumbo Cash & Carry - now stands at 235, with 22 000 employees in 13 Southern African countries. Massmart is the third-largest retailer in Africa and ranks 140th in the world.

The lessons here are clear. Critical mass in terms of market presence can compensate for tougher conditions. Marketing is even more important when times are hard - whereas inferior companies tend to cut the marketing and PR budgets at the first sign of trouble.

As Lamberti's right-hand man for the past few years, Pattison has to share the credit for Massmart's performance. Those who have watched him in action expect a continuation of Lamberti's toughness in performance management, but moderated by a cooler, more empowering style and less obsession with detail.

Pattison's fascination for the complex challenges of retail doesn't mean his life is consumed by it. "I don't believe in 18-hour working days," he told the FM when he took over as CEO, "and I'm not available 24/7. When I was a consultant I saw the pointlessness of that, and I have seen my own rapidly diminishing performance in those conditions. I like the proposition that a chief executive needs to concern himself mainly with things that nobody else in the organisation can do."

Second-placed Grindrod has perhaps the most distinguished record in the top 20 in the six years since the format was created, though MTN is the only company to finish in the elite in every one of those years. In management terms, the similarities between Massmart and Grindrod are striking. The global shipping company is being run by a new young CEO (Alan Olivier), who was groomed for the position and who took over from a man (Ivan Clark) whose individual influence was instrumental in taking the company from obscurity to excellence.

Since 2002, total Grindrod assets have increased in value by 350%, and revenue by 700% to R17bn. Year-to-year from 2005 and 2007, revenue rose by 68% and 36%. In the same six-year period, which started with the share price on 140c, earnings rose 620% to R1,2bn, and the stock hit a record high of R140 (taking out the effect of a share split).

Grindrod's exposure to SA is little more than 5% of revenue, which means that investors have to think differently about it. An understanding is needed of global shipping markets and the structure of the industry itself, as well as its particular financial instruments. That's why the company has to be considered out of the context of an economy that is set to slow, and is vulnerable to high interest rates, high inflation and infra-structural fragility.

The shipping environment looks much brighter. Grindrod told shareholders in May this year that earnings per share and headline earnings per share for the six months to June 30 are expected to rise by between 55% and 75%. For last year's first half, the profit attributable to shareholders was R571m, a 23% increase on the 2006 first half.

Olivier says: "We're coming off a low base in some ways. If you look at 2007, the results were stifled by a huge contract base and losses in two operations, including IVS Parcel Service. These contracts have been renewed at significantly higher levels. There was also a forex loss in 2007, but we expect a substantial correction there because of a much weaker rand."

In theory, the higher you finish in this particular table, the more difficult it should be to repeat the feat because the base for the next year's performance is set ever higher.

But the top two companies in this year's assessment, like many others in the table, demonstrate that there is no substitute for daring, innovative management; a conservative approach to the financials; a thoughtful and carefully considered succession plan; and a refusal to rest on laurels.