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South African retailer Mr Price scraps dividend as annual earnings drop

JOHANNESBURG (Reuters) – South African budget retailer Mr Price on Thursday reported a 10.4% drop in annual earnings due to COVID-19 impairment provisions, and did not declare a final dividend in order to preserve cash.

Headline earnings per share (HEPS), the main profit measure in South Africa, fell to 1,047 cents in the 52 weeks ended March 28 from 1,168.6, while diluted HEPS decreased 9.9%.

Mr Price, known for its no-frills clothing and furniture stores, said anticipated consumer distress resulted in the company taking additional impairment provisions on stock, its debtors’ book and insurance claims.

Total revenue from continuing operations grew 2.1% to 23 billion rand ($1.32 billion), with retail sales up by 1.5%, boosted by clothing and home divisions.

Following the announcement of a national lockdown on March 15, sales growth slumped 32.9% as consumers prioritised essential items in the last two weeks of the month.

($1 = 17.4159 rand)

(Reporting by Nqobile Dludla; Editing by Kim Coghill and Sherry Jacob-Phillips)

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