“Our cautious approach to credit has resulted in cash sales growth of 16.1 per cent outstripping credit sales growth of 9.6 per cent,” said [DATA MPC:Mr Price Group] chief executive, Stuart Bird.
“Overall we may have lost some sales opportunities by restricting our credit growth, but we are confident that this approach remains the right one and will benefit us in the long run.”
The fashion value retailer reported retail sales growth of 14.8 per cent to 15.2 billion rand for the 52 weeks ending 29 March 2014 from 13.2 billion rand for the 2013 period.
“In South Africa, the group’s target customers, who are mainly in the mid to upper income levels that are less impacted by the poor economic environment, responded well to the fashion value offer, resulting in store sales growing by 13.1 per cent,” Mr Price said.
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“Strong growth was achieved in the new markets and channels of West Africa – Nigeria and Ghana up 98.2 per cent, and online – up 293.4 per cent.”
Bird also indicated that Mr Price’s model is cash generative, with 80.8 per cent of total sales being for cash, and that this ratio would likely increase given the company’s international growth plans, which are expected to be entirely cash based.
Total revenue for the group increased by 15.2 per cent from 13.8 billion rand in 2013 to 15.8 billion rand in 2014 and profit from operating activities grew 22.6 per cent from two billion rand to 2.5 billion rand.
Headline earnings per share rose 20.5 per cent to 765.1 cents in 2014 from 634.8 cents in 2013 and the company reported dividends per share of 482 cents in 2014, up from 398 cents in the 2013 period.
“We will devote appropriate time and effort to crystallising the entry strategies of our Mr Price brands – Apparel, Home and Sport, into new markets while being mindful of the challenges in the local market,” said Bird.
“The group plans to invest in excess of two billion rand over the next three years to provide the means to realise its vision, which is to be a top performing, international omni-channel retailer.”