Trading update for the third quarter and nine month period ended 29 December 2018
Mr Price Group Limited
Registration number 1933/004418/06
Incorporated in the Republic of South Africa
ISIN: ZAE 000200457
JSE share code: MRP
TRADING UPDATE FOR THE THIRD QUARTER AND NINE MONTH PERIOD ENDED
29 DECEMBER 2018
Group retail sales and other income (RSOI) for the nine month
period ended 29 December 2018 increased 5.8% over the
corresponding period in the prior year (“Corresponding Period”).
The Group’s South African retail sales growth exceeded the
combined sales growth of Type D and Type E retailers per Stats
SA for April to November (the period for which market information
is available) indicating continued market share gains.
During the third quarter (30 September 2018 to 29 December 2018)
of the financial year ending 30 March 2019, RSOI grew 3.5% to
R7.1bn. Total retail sales of R6.7bn (including franchise) were
2.0% higher. Corporate owned store performance was as follows:
Total Comparable Units *RSP
sales Store sales Inflation
MRP Apparel 0.4% -2.7% -4.3% 5.9%
MRP Sport 12.7% 12.1% 8.9% 4.5%
Miladys 0.2% -0.7% 1.6% -0.9%
1.4% -1.6% -3.3% 5.7%
MRP Home 4.9% 3.0% -2.0% 8.0%
Sheet Street 1.0% -1.4% -0.1% 2.0%
3.7% 1.6% -1.3% 6.0%
Group 1.9% -0.8% -2.9% 5.8%
*Includes South African VAT increase effect from 14% to 15% in April 2018
The corporate store sales performance detailed above was below
expectations and analysis thereof should consider:
- sales growth of 8.5% in the Corresponding Period, which
included a strong performance by the largest division, MRP
Apparel, which grew sales 11.3%.
- the prevailing poor economic and retail environments in
several markets in which the Group trades. In our largest
market, South Africa, the following factors have reduced
consumer spending power: low GDP growth, rising
unemployment and inflation levels, a VAT rate increase,
higher average fuel prices and an interest rate increase
in November 2018.
- The deterioration in South African consumer confidence into
Q3. This was in contrast to the optimism experienced in
December 2017 post the ANC election outcome and subsequent
change in South Africa’s president, which provided
temporary support to the retail sector.
- November trade being impacted by lower Black Friday sales.
- December school holidays commencing a week later than the
Corresponding Period. These holidays will return to normal
South African retail sales grew 1.1% to R6.2bn. Store sales were
up 0.7% and online sales up 38.7%. The MRP Apparel online channel
achieved sales growth of 35.4%, MRP Home 54.9% and MRP Sport
40.5%. Non-South African corporate owned stores sales increased
by 13.1% to R505.8m.
Trading space increased 1.4% on a weighted average basis and
3.1% on a closing basis.
Despite high levels of competitor price discounting and
promotional activity over the quarter, the gross margin %
improved slightly on the prior year in all divisions.
Other income grew 35.3% to R411.1m, driven by an 85.9% increase
in mobile and cellular. Interest and fees relating to the credit
portfolio grew 7.7%, while insurance revenue declined 0.5%.
Consumers continue to favour transacting in cash, with cash
sales increasing 2.2%(constituting 84.7% of sales), and credit
sales increasing 1.4%.
The trading environment in Q4 is expected to remain very
challenging. Global and domestic market uncertainty continues
and improvements in the economy and consumer health are likely
to be muted until the risk events settle and the general
elections in South Africa take place in May 2019. Key focus
areas are inventory management (including clearing Q3 excess
stock and controlling Q4 fresh inputs) and delivering
merchandise that offers great value to our customers.
The above-mentioned figures and any information contained herein
do not constitute an earnings forecast and have not been reviewed
and reported on by the Company’s external auditors.
17 January 2019
Sponsor: Rand Merchant Bank (A division of FirstRand Bank Ltd)
Date: 17/01/2019 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Email this JSE Sens Item to a Friend.