Mr Price grows earnings in tough retail climate
MR PRICE on Monday reported a 23% jump in first-half earnings as its focus on budget-conscious shoppers and cash sales helped it ride out weak retail and consumer credit markets.
Mr Price, which sells clothing, household goods and sporting equipment, has been on a push to boost its cash sales and insulate itself from souring consumer debt.
African Bank Investments, a lender to low-income South Africans, was toppled by bad debts in August, triggered in part by exposure to furniture sold on credit by its Ellerine unit.
Mr Price’s focus on budget-conscious shoppers has also helped it ride out a weak economic outlook. Consumers in Africa’s most developed economy are under pressure from high unemployment and rising food and fuel costs.
The low-cost retailer reported on Monday that its diluted headline earnings per share rose to 349c in the 26 weeks to September 27, up 23% from the year-earlier period.
Cash sales across the group’s operations increased by 14.4% to R7.9bn and now account for 80.9% of its sales.
Sales to customers outside South Africa grew by 25.4% to R690.9m and now represents 8.8% of group sales.
Mr Price declared an interim dividend of 211.5c per share, an increase of 25.9% from the previous comparable period.
At 2.29pm, the stock was up 0.2% to R245.
Shares of Mr Price finished flat at R244. The stock is the best performer on the benchmark top-40 index this year, up 50%.