MR Price Group Limited, one of the major clothing retailer in Nigeria and across Africa said its 26 weeks ended 1 October 2016 that its revenue rose by 1.5% year on year.
Total revenue grew to R9.2bn with retail sales increasing by 0.4% (comparable stores -3.2%) to R8.6bn. Cash sales grew by 1.9% and constitute 82.6% of total sales, whilst credit sales continued to be affected by the introduction of new credit regulations in September 2015, and declined by 6.2%.
Selling price inflation was 11.4% and unit sales were 10.2% lower. Weighted average trading space increased by 2.2%, while net of closures and reductions, space was up 3.6%. Other income, derived mainly from the financial services division, MRP Money, increased by 27.9% to R543.4m, driven by cellular which increased by 73.9%, while insurance and debtors’ interest and fees was up 9.4%.
The merchandise gross margin decreased by 0.9% to 39.8%, impacted by a weak and volatile currency and higher markdowns. The cellular margin improved from 2.1% to 13.1% due to scale and product mix. On a normalised basis selling and administrative expenses were well controlled and increased by 2.2%, however this was insufficient to offset the lower gross profit and normalised operating profit was down 4.2% at R1.3bn.
Commenting on the result, Stuart Bird, Group CEO MR Price Group Limited said “We were happy with the earnings growth in four of our six trading divisions.
He added that “Despite the challenges brought about by a poor economy and resulting constrained consumer environment, they held or improved their GP%’s, managed costs and delivered good profit growth. However MRP Apparel, which represents 59.3% of Group sales, and Miladys performed well below expectations.”
The company did not make mention of its business posture in Nigeria. MR Price in its August trading update said it saw ‘little improvement’ in its Nigerian unit. The company did made over 10% increase on its clothing line across Nigeria as a result of devaluation and Forex impact on its business.
MR Price has over eight major stores across Nigeria. This includes South Africa and Australia where it opened shop in 2013. The company employs over 16,000 people in South Africa with over 1062 retail stores worldwide.
