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Mr Price ups its market share as it beds down acquisitions

MR PRICE expects headwinds to continue next year.

MR PRICE expects headwinds to continue next year.

Published Jun 10, 2022


RETAILER Mr Price, for the 52 weeks to end April, continued to strengthen its market position within South Africa boosted by acquisitions of Power Fashion and Yuppiechef and despite several trading constraints.

During this period, the retailer said yesterday, its headline earnings per share grew 20.1 percent to 1 282.1 cents per share, while its operating profit exceeded R4 billion for the first time. The group declared a final dividend of 807.7c per share.

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Cash sales contributed 86.1 percent of group retail sales and increased by 26.4 percent, largely bolstered by the inclusion of Power Fashion and Yuppiechef, which are both cash-based. Mr Price is free of financing debt and has a cash balance of R4.6bn.

Total group revenue increased 23 percent to R28.1bn, and on a 52-week comparable basis, increased by 25.9 percent. Net profit grew by 26.4 percent to R3.35bn, as all divisions in its apparel segment reported an increased reception, staging, onward movement and integration (RSOI) by 30.9 percent to R19.5bn.

Its online sales increased by 48.2 percent compared to the previous period and contributed 2.9 percent of retail sales. The homeware segment reported double-digit growth of 15.6 percent. The telecoms segment exceeded R1 bn in revenue for the first time, increasing 34.4 percent to R1.2bn.

Financial services segment revenue increased 6.2 percent to R697m.

The group reported that operating profit rose by 28 percent to R4.95bn, with its apparel segment, which includes clothing, sportswear, footwear, sporting equipment and accessories, accounting for about three-quarters of this.

According to the group, as previously reported, external challenges were faced during the period, which included the Covid-19 third and fourth waves, frequent load shedding, civil unrest causing 111 of the group’s stores to close temporarily, and numerous global supply chain disruptions.

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Mr Price chief executive Mark Blair said: “I am very satisfied with the way in which the team has responded to the multiple challenges we have faced this year. It is important to remember that we were one of the first businesses in South Africa to get back to pre-Covid-19 earnings levels.

“Our base is much higher than most of the market as we reported earnings growth in FY2021 when most companies’ earnings were declining. We have continued to grow market share and have further entrenched ‘Your Value Champion’ promise to our customers.”

During the year the group opened 130 new stores, acquired seven, and reopened 96 of the 111 stores looted in July 2021’s civil unrest, giving it 1 721 at the end of the period. It also expects to reopen 15 stores that were extensively damaged during the unrest in its 2023 and 2024 years.

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Looking forward, Mr Price said it was likely to be characterised by ongoing volatility. Global supply chain challenges, rising inflation and interest rate hikes were expected to continue, placing pressure on forecasting efforts and the cost of doing business.

“These knock-on effects will be felt domestically, amid other previously communicated local challenges, exerting pressure on businesses and households. A constrained consumer environment is anticipated to persist for most of 2022 as post-year-end trade has reflected,” it said.

Blair said: “We have faced two tough years in a row, and with all the headwinds it looks like FY2023 will be no different. We will navigate the short term as we always have, with good execution, agility and confidence.

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“We have good momentum, our growth plan is coming together, and we are excited to welcome the Studio 88 team once we have regulatory approval.

“This business and its people are resilient, and I am extremely proud of the way in which everyone has responded, which is testament to our mantra of ordinary people doing extraordinary things,” he said.


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