Mr Price wants to channel R1.3-billion towards capital expenditure as the retail giant plans to grow its footprint by 250 new stores in the 2023 financial year.
The JSE-listed group opened 78 new stores and expanded 11 more in the six months to October.
Mr Price CEO Mark Blair said the fashion retailer’s new stores continue to deliver returns on invested capital, adding that the return on capital expenditure and on invested capital over the last five years are market leading.
“It’s been a tough period for trading. But against all the uncertainty, we’ve gained traction on our strategy implementation,” said Blair.
“Our acquisitions have been value-accretive, we launched the Mr Price Baby concept, proved the business case for the rollout of Mr Price Cellular stores, closed out the Studio 88 acquisition, were recognised as the only fashion-value retailer in the FTSE/JSE Responsible Investment Top 30 Index, and carried out an extensive organisational design review to ensure we have the capacity and skills to execute our long-term plan.”
Mr Price said group revenue was up 6.5% to R13.3-billion in the six months under review, while profits grew 10.6% to 496 cents. Cash sales constitute 84.9% of group retail sales and increased 5.2% during the period.
Like many businesses in the country, Mr Price said it is adversely affected by the ongoing power cuts implemented by Eskom, noting that 56% of trading days were interrupted by loadshedding during the period. The group estimates that more than 80 000 trading hours were lost.
The retailer, valued at R48.2-billion on the JSE, rewarded its shareholders by declaring an interim gross cash dividend of 312.5 cents per share, a 10.6% increase against the prior year.
Blair said the top-line performance did not meet internal targets, but the group’s market-leading retail performance post-Covid-19 with sales growth of 37.8% in the base, in which it gained further market share, was always going to present a challenge.
“I take comfort that the systems impact in particular is once-off and we have achieved a significant milestone in our retail modernisation programme aimed at derisking our IT [information technology] environment and establishing an infrastructure to support our ambitions,” he said.
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