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Reuters
Published
Nov 14, 2016
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S.Africa's Mr Price reports 13.7 pct fall in half-year profit

By
Reuters
Published
Nov 14, 2016

South African no-frills retailer Mr Price on Monday reported a 13.7 percent drop in half-year profit as cash-strapped consumers cut back on clothing purchases due to weak economic growth and food inflation.

Mr Price apparel division revenues performed below expectations for the last six months


Diluted headline earnings per share of 351.2 cents for the six months to end-September, compared with 406.8 cents in corresponding period. Headline EPS is the main profit measure in South Africa and strips out certain one-off items.

The apparel division, which accounts for around 60 percent of sales, performed below expectations, the firm said.

"The poor economic environment, revised credit-granting regulations, late arrival of winter weather and higher prices caused by the weak rand were all contributing factors," the firm said in a statement.

Mr Price cut interim dividend 8 percent to 228.2 cents per share.

Total revenue grew by 1.5 percent to 9.2 billion rand ($640.87 million) with retail sales increasing by 0.4 percent.

Selling price inflation was 11.4 percent and unit sales were 10.2 percent lower, the firm said. Consumers under "considerable pressure" and have diverted spending from clothing to food and other essentials, the firm said.

Mr Price said it expects trading conditions to remain difficult in second half with no relief in sight for embattled consumer.

($1 = 14.3554 rand) 
 

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