Mr Price Group reported a 15.5% increase in revenue for the fiscal year ending 30 March 2024. The company’s financial performance reflects significant growth despite numerous challenges.
Revenue and Market Share
Mr Price Group’s revenue reached R37.9 billion, a 15.5% increase from the previous year. Excluding the recently acquired Studio 88 Group, revenue grew by 5.8% to R30.3 billion. The group also saw its market share grow by 30 basis points, according to the Retailers’ Liaison Committee.
Earnings Per Share and Dividends
Basic earnings per share rose by 5.4% to 1,276.2 cents, while headline earnings per share increased by 6.7% to 1,286.2 cents. Diluted headline earnings per share grew by 6.3% to 1,252.6 cents. The company declared a final dividend of 526.8 cents per share, a 17.8% increase, maintaining a payout ratio of 63%.
Operating Profit and Margins
Operating profit for the group exceeded R5 billion for the first time, reflecting a 7.9% increase. In the second half, diluted headline earnings per share grew by 17.4%. The gross profit (GP) margin expanded by 160 basis points to 40.6% during this period.
Challenges and Strategic Responses
Mr Price faced significant challenges, including load shedding and supply chain disruptions. Load shedding resulted in an estimated revenue loss of R226 million. However, the group achieved 100% backup power by the end of Q1. Despite these issues, the group managed to maintain robust inventory management.
Segmental Performance
Apparel Segment
Retail sales in the Apparel segment increased by 20.5% to R29.1 billion, with comparable sales up by 3.3%. Excluding Studio 88, retail sales grew by 7.9%. The largest division, Mr Price Apparel, gained market share for seven consecutive months.
Homeware Segment
The Homeware segment saw a marginal retail sales increase of 0.3% to R6.3 billion. Comparable retail sales, however, declined by 3.8%. The segment’s performance improved in the second half, aligning more closely with market growth rates.
Telecoms Segment
The Telecoms segment achieved a 10.2% increase in retail sales to R1.2 billion. Comparable sales grew by 1.5%, with Mr Price Cellular standalone stores performing strongly.
Financial Services Segment
Revenue from the Financial Services segment increased by 4.8% to R869 million. Debtors’ interest and fees rose by 12.1% due to a higher average debtors’ book and increased repo rates.
Operational Highlights
Mr Price Group opened 238 new stores, bringing the total to 2,900. Total unit sales increased by 3.8% to 292 million units, with 103 million units sourced from South Africa. The group maintained strong stock management, with gross inventory down by 4.2% and stock freshness improving by 240 basis points to 85.8%.
Financial Health
The group ended the year with a cash balance of R2.8 billion and a cash conversion rate of 86.9%. Capital expenditure amounted to R1.1 billion, primarily for new store development and backup power solutions.
Outlook
Mr Price Group anticipates consumer relief in the latter half of FY2025 due to moderating inflation and potentially decreasing interest rates. The group plans to open 200 new stores and expects capital expenditure of around R1.0 billion.
Conclusion
Despite facing a challenging retail environment, Mr Price Group has demonstrated resilience and strategic agility. The company remains focused on delivering value to its customers and strengthening its market position.
Financial Summary
| Metric | FY2024 | Change (%) |
|---|---|---|
| Revenue | R37.9bn | +15.5% |
| Revenue (Excl. Studio 88) | R30.3bn | +5.8% |
| Basic Earnings Per Share | 1,276.2c | +5.4% |
| Headline Earnings Per Share | 1,286.2c | +6.7% |
| Diluted Headline EPS | 1,252.6c | +6.3% |
| Final Dividend Per Share | 526.8c | +17.8% |
| Operating Profit | > R5bn | +7.9% |
| Cash Balance | R2.8bn | – |
| Cash Conversion Rate | 86.9% | – |
| New Stores Opened | 238 | – |