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Trading update for the 21 weeks ended 22 August 2015
Mr Price Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1933/004418/06)
ISIN: ZAE000026951
Share Code: MPC
("Mr Price Group" or "the Group" or "the Company")
TRADING UPDATE FOR THE 21 WEEKS ENDED 22 AUGUST 2015
During the first 21 weeks (29 March 2015 to 22 August 2015)
(“Period” or “Current Period”) of the financial year ending 2
April 2016, Mr Price Group recorded total sales growth of 9.0%
(comparable sales growth: 4.6%) over the corresponding period in
the prior year (“Corresponding Period”). The high sales base
(total sales growth of 15.5% and comparable sales growth of
11.5%), particularly in the MRP Apparel division, was previously
brought to the attention of the investment community. Sales
growth for the Period was also impacted by low levels of
consumer confidence, some poor fashion calls and the very late
onset of Winter. In addition, the Easter school holidays, which
were included in the Corresponding Period, fell outside the
Current Period.
Monthly sales growth is summarised below, with disappointing
sales growth for April and May inhibiting overall performance:
FY2016 FY2015
Stats SA# Group Group
April 7.4% 8.0% 18.5%
May 6.4% 3.7% 16.9%
June 10.6% 11.3% 13.8%
July ## 10.7% 15.1%
August ## 12.6% 10.8%
Total ## 9.0% 15.5%
# Type D retailers (clothing, footwear and leather goods)
## Information not yet available
Divisional sales growth and contributions are summarised below:
F2016 F2015
Total Comp Contribution Total Comp
MRP 11.8% 6.3% 59.8% 20.6% 16.2%
MRP Sport 11.9% 3.1% 6.5% 15.2% 3.8%
Miladys -0.2% -0.8% 7.6% -0.3% 0.6%
MRP Home 5.6% 3.1% 18.4% 12.7% 8.6%
Sheet Street 4.2% 1.9% 7.7% 6.4% 2.3%
Total 9.0% 4.6% 100.0% 15.5% 11.5%
As all August 2015 financial information has not yet been
finalised, the information presented hereafter is based on the
first 18 weeks (29 March 2015 to 1 August 2015) of the financial
year ending 2 April 2016, with reference to same 18 week period
in the previous financial year.
Sales W.Avg RSP
Total Comp Space Units Inflation
MRP 11.5% 5.8% 8.3% 3.4% 7.9%
MRP Sport 11.7% 2.7% 11.3% 7.6% 3.8%
Miladys -1.3% -2.0% 1.0% -2.0% 0.7%
MRP Home 5.1% 2.4% 2.4% -2.4% 7.7%
Sheet Street 2.5% 0.1% 2.7% -2.5% 5.1%
Total 8.5% 3.9% 5.8% 1.8% 6.6%
MRP (Apparel) – although achieving sales growth on the
Corresponding Period was demanding, opportunities in the current
trading period were lost in the mens’ and ladies’ junior
businesses, due to not finding the balance between a consistent
core offer and fashion-right key items in volume. Despite this,
good growth was achieved in most other parts of the business.
MRP Sport – double digit sales growth was recorded for all
months except May, which was a particularly difficult month
across most departments. Heavier, warmer apparel initially
underperformed but recovered in June when colder weather was
experienced.
Miladys - April and May sales were 7.6% lower than the
Corresponding Period due to the late Winter and low stock
levels. Subsequent sales growth of 5.9% was aided by the onset
of colder weather, an improved in-stock position and an
encouraging start to Spring.
MRP Home - as anticipated, the economy and resultant low level
of consumer confidence is impacting discretionary homeware
purchases. Merchandise performance was fairly consistent across
major departments.
Sheet Street – the increased level of fashionability in certain
departments moved taste levels away from its mid-LSM customers,
who are under greater financial pressure than those of the other
chains.
MRP Money - although not included in retail sales, the division
has traded well due to the continued growth in financial
services revenue and a superior bad debt performance. Credit
sales growth of 7.3% was lower than cash sales growth of 8.9%,
which constituted 80.8% of total sales.
The Group is targeting an improved sales performance for the
remainder of the financial year which has a less challenging
comparative sales growth base of 12.5% (comparable sales growth
7.8%). The debtors’ book and stocks are in good shape and,
whilst exchange rate volatility is proving testing, overhead
control is expected to contribute to operating profit growth.
The MRP division will be opening two test stores in Melbourne,
Australia, in October.
The above-mentioned figures do not constitute an earnings
forecast and have not been reviewed and reported on by the
Company’s external auditors.
Interested parties are reminded of the conference call at 15h00
(SA time) on 3 September 2015, which will provide further
insight to the information contained in this trading update.
Kindly contact Rod Salmon of Barclays Capital at
priscilla.leroux@barclays.com by 10h00 on 3 September 2015 in
order to participate in the conference call.
Durban
1 September 2015
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
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