Clothing and home goods retailer Mr Price was looking to acquire other stores in the apparel and home categories in the country as part of its expansion strategy in the next year.
The company, which owns Mr Price Home and Miladys, on Wednesday reported 20 percent operating profit to R991.5 million for the year ended March. Analysts remarked on Wednesday that the group, which was known for its low-priced merchandise was taking market share from upmarket retailer Woolworths.
The group said in a statement on Wednesday that its apparel chain increased sales by 13.1 percent to R6.9 billion adding that it had been gaining market share in the second half of the year.
Sales in Sheet Street increased by 4.9 percent to R846.4 million, while the Home chain's performance continued to be hampered by the financial pressure consumers were under. Sales in the Home category increased by 3.3 percent to R2.8 billion for the review period.
Milady's annual sales were down 1.3 percent, with profits lower than the previous year but the chain showed an improved performance in the second half. Milady's had a very different first half, which was of their own making. But we have changed the management and turned it around, McArthur said.
Chief executive Alistair McArthur said on Wednesday the group was looking at acquiring either a clothing or home group as part of its plans to expand in the next year.
We are looking for trading space opportunities and in order to maintain our track record of sales growth, are giving consideration to new business opportunities, he said.
But Abri du Plessis, retail analyst at Gryphon Asset Management, said the group's plans for acquisitions was ambitious.
I think they got ahead of themselves with the introduction of a credit retailing system and have now decided to focus on acquisitions instead, he said.
McArthur said however, that there continued to be an aggressive focus on credit management and risk processes in response to tougher economic conditions: An improved collection strategy, coupled with conservative credit granting philosophy resulted in the company maintaining a leading position with regard to the state of its credit portfolio, he said.
Net bad debt amounted to 3.7 percent of credit sales or 7 percent of the debtor's book. The group's final dividend increased by 36.6 percent to 126.8 cents per share.
McArthur said the group was considering different models in countries with large potential, including joint ventures and corporate stores. He added that he was also looking further afield than in Africa for expansion, but would not disclose where.