DURBAN – Mr Price’s share price gained as much as 11.91percent on Friday after the retailer announced that its sales exceeded R20billion for the first time in the year to the end of March.
Retail sales increased by 4.4 percent to R20.9bn, boosted by a strong performance from the apparel and homeware segments.
The share price responded positively, rising to R198.77 a share, up from Thursday’s closing price of R177.62. The share closed the day at R197.15.
Chief executive Mark Blair said the group was able to deliver solid earnings growth in a very tough retail year.
“Despite this, both our apparel and homeware segments outperformed the market and gained market share on an annual basis. For the first time, our retail sales exceeded R20bn and profit before tax R4bn,” Blair said.
Total revenue increased by 5.8percent to R22.6bn. Other income was up by 24.7percent to R1.5bn, mainly from financial services and cellular.
Headline earnings per share (Heps) increased by 6.2percent to 1168.6cents a share.
The group declared a 6.2percent increase in dividends to 736.20c a share.
Looking ahead, Blair said the retail environment was likely to remain under pressure in the short term as flat real wage growth and low levels of disposable income continue to challenge the consumers’ ability to spend.
“The national elections delivered a positive outcome which we hope will lead to reformed economic policies that will encourage business growth and job creation,” he said.
The group expects a very tough first half of the new financial year, but expects a better trading performance in the second half.
“Increased focus is being applied to our key differentiators to ensure that we continue to gain market share and deliver above market related returns for our shareholders,” Blair added.
Blair, who took over the reins in January, made key appointments, including newly formed roles of chief operating officer Arn de Haas and chief retail officer Nicci Lyne to strengthen the team.
He said the new management team had identified potential opportunities for growth across the business and prioritised key areas of focus which will form part of the process of updating the group strategy.
The group opened 82 new stores and expanded 11 during the period, closed 17 stores and reduced the size of 30 stores. This took the total number of corporate-owned stores to 1323.
It expects to open 70 new stores in the 2020 financial year.
The apparel segment increased retail sales and other income by 3.8percent to R15.6bn. Sales in MRP Apparel grew 3.1percent to R12.6bn and online sales increased by 30.2percent.
Miladys grew sales 4percent and MRP Sport reported strong sales growth of 9.7percent, with online sales growing at 43.8percent.