Mr Price shares leap on bumper annual dividend
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JOHANNESBURG - MR PRICE shares leapt by nearly 12 percent on the bumper annual dividend declared during 53 weeks ended April 3 and as it announced it had gained market share despite Covid-19 restrictions that rocked the retail sector during the year under review.
The share price closed the day 11.2 percent higher at R220.47.
Durban-based Mr Price, whose brands include Mr Price, Mr Price Home and Sheet Street, said it had lost R1.8 billion in sales during the year under review, reflecting the impact of level 5 lockdown measures to stop the spread of the Covid-19 pandemic.
Retailers were forced to close their retail outlets as the country went into a hard lockdown in April and May, resulting in a 50.4 percent plunge in retail sales in April and a 12 percent decline in May.
Mr Price declared a 462.7 cent final dividend per share, bringing the annual dividend for the year under review to 672.8c per share, up 116.1 percent compared to a year ago. Diluted headline earnings shot up by 21.4 percent in the second half of the year on strong momentum in the second half of the year.
Highlights included a surge in online sales, market share growth and the turnaround in the group's fortunes during the second half of the year including Mr Price apparel retail sales, which recorded double digit growth in the fourth quarter of the year on the relaxation of trade restrictions.
Group chief executive Mark Blair said the group's financial results were commendable when given that it was forced to close all stores in April last year and yet maintained profitability at a similar level to the previous year.
“The 2021 financial year was a year like no other, and I could not be more pleased with the way that our business model has proven its resilience in the midst of extreme uncertainty and how our people adapted to the unprecedented demands placed on them by the pandemic,” Blair said.
The group said given the store closures in April last year, it was satisfied with the 2.9 percent decline in total revenue to R22.3bn, and the 2.4 percent fall in retail sales to R21.2bn.
In the second half of the year retail sales increased 8.5 percent and the group gained 180 basis points of market share.
Mr Price said the homeware division recorded a double digit growth in retail as it acquired market share in eight out of 10 months since the lifting of trading restrictions. As more people worked from home, the homeware segment recorded a 4 percent increase in retail sales and other income to R5.6bn during the year under review. The telecoms segment grew by 11.6 percent to R862 million driven by the cellular segment.
However, credit sales took a 14.5 percent knock and cash sales which account for 86.4 percent of group retail sales declined by a minor 0.2 percent.
“This supports the group's strategic approach of being predominantly cash based, which is beneficial in a constrained credit environment. The introduction of lay-bys was very successful and provides customers with an additional tender type,” the group said.
Mr Price added Power Fashion to its portfolio and is awaiting competition approval for the acquisition of Yuppiechef, focused on a strategy to become Africa's most valuable retailer.