Get more Mail & Guardian
Subscribe or Login

Mr Price’s profit up on cash sales

Mr Price, the South African-based clothing and household goods retailer, said first-half profit gained 24% as it focused on customers paying in cash amid falling consumer confidence.

Net income in the six months through September 28 advanced to R747-million from R605-millon a year earlier, Mr Price said in a statement. Sales increased 15% to R7.2-billion.

"We focused on avoiding chasing credit sales to drive top- line growth and are pleased that cash sales growth of 15.1% exceeded credit sales growth of 11.6%," Mr Price said. "The performance is against a backdrop of low consumer confidence in a challenging retail environment, caused by slowing real wage and credit growth."

Consumer confidence in Africa’s largest economy dropped to a 10-year low in the third quarter as higher inflation curbed spending. Truworths, South Africa’s largest listed clothing retailer that generates 71% of its sales in credit, said last week that revenue growth slowed in the 18 weeks through November. Mr Price cash sales made up almost 80% of total revenue, the company said.

Rising shares
Mr Price shares rose as much as 2.8%, the most since October 28, and traded 2.6% higher at R150.98. The stock has gained 7.8% this year, compared with a 11% decline in the 11-member FTSE/JSE Africa General Retailers Index.

"Mr Price cash sales are high and this means they have been able to consistently put good results on the table," Henre Herselmanm, a derivatives trader at Nedbank, said. "These earnings are brilliant, considering the current retail sector sentiment."

The company raised its interim dividend 26% to R1.68 a share.

Mr Price opened two new stores in Nigeria during the six- month period, bringing its total in the West African country to four. Woolworths Holdings, the South African food-and- clothing retailer, said last week it plans to close its three stores in Africa’s most populous nation because of high rental costs and difficulties with its supply chain.

Stores in Nigeria and Ghana are "performing well", chief executive Stuart Bird said in the statement. Mr Price no longer sees the west African countries as test markets, he said. – Bloomberg

Subscribe for R500/year

Thanks for enjoying the Mail & Guardian, we’re proud of our 36 year history, throughout which we have delivered to readers the most important, unbiased stories in South Africa. Good journalism costs, though, and right from our very first edition we’ve relied on reader subscriptions to protect our independence.

Digital subscribers get access to all of our award-winning journalism, including premium features, as well as exclusive events, newsletters, webinars and the cryptic crossword. Click here to find out how to join them and get a 57% discount in your first year.

Related stories

WELCOME TO YOUR M&G

If you’re reading this, you clearly have great taste

If you haven’t already, you can subscribe to the Mail & Guardian for less than the cost of a cup of coffee a week, and get more great reads.

Already a subscriber? Sign in here

Advertising

Subscribers only

The South African Bone Marrow Registry celebrates 30 years of...

‘It’s not drilling into bones!’: Misconceptions keep donors away, says SABMR, but a match outside of a patient’s family is a needle in a haystack

R500-million Covid-19 Gauteng hospital contract was irregularly awarded — SIU

The bank accounts of Pro Service Consulting and Thenga Holdings have been frozen

More top stories

With its industrial base decimated, SA’s economy needs real change...

Speaking at a book launch on Tuesday, the finance minister said a focus on manufacturing is critical to stem the country’s deepening unemployment crisis

Defence team cagey about Zuma’s health after state advised he...

The former president was absent from court, but his counsel argued that health matters be left aside, so as to hear his case for the removal of Billy Downer

The South African Bone Marrow Registry celebrates 30 years of...

‘It’s not drilling into bones!’: Misconceptions keep donors away, says SABMR, but a match outside of a patient’s family is a needle in a haystack

New clean fuel standards could be the end of refineries...

In the absence of mechanisms to recoup investment into cleaner fuels, refineries may be faced with tough decisions
Advertising

press releases

Loading latest Press Releases…
×