Advertise with fastmoving.co.za
 
 

The dividend cut brings its payout ratio back in line with its policy.
The dividend cut brings its payout ratio back in line with its policy.

Mr Price cuts final dividend despite double-digit profit growth

RETAILER NEWS

By Robert Laing - Jun 8th 2018, 09:32

After generously raising its interim dividend by 22%, Mr Price cut its final dividend by 6%. 

The retailer said its decision to cut its final dividend was based on its policy of holding its payout ratio at 63% of headline earnings per share (HEPS). In its 2017 financial year, its payout ratio had widened to 73%.

Mr Price’s diluted HEPS grew 21% to R10.75 from R8.88, its results for the year to end-March showed on Friday morning.

The group’s overall revenue grew 8% to R21.3bn and its net profit grew 23% to R2.8bn.

The owner of the Mr Price clothing chain, along with other brands including Miladys and Sheet Street, declared a final dividend of 414.1c, down from 438.8c for the second half of its 2017 financial year.

But combined with the 279c interim dividend it paid in the first half of its 2018 financial year, versus 228.2c in the matching period in 2017, its total for its 2018 financial year came to 693.1c, a 26c increase on the prior fiscal year’s 667c.

Mr Price segments itself into four divisions: apparel, which contributed 71% of retail sales and 73% of operating profit; home, which contributed 24% of sales and 21% of profit; financial services and cellular, which contributed 5% of sales and 11% of profit; and central services, which reduced operating profit by R191m, a 23% increase from the R155m that it cost in the 2017 financial year.

Central services includes information technology costs, and Mr Price said its online sales grew 11.5%.

"Local store sales were up 8.3% while non-South African store sales increased by 3.8%," Mr Price CEO Stuart Bird said in the results statement.

Retail selling price inflation was 1.7% and 220-million units were sold, an increase of 6.4%.

"Net trading space increased by 2.1% and after opening 57 new stores, the group traded from 1,258 corporate-owned stores at year-end."

The group recently acquired 12 Kenyan franchise stores from Deacons East Africa.

Bird said the group’s envisaged capital expenditure in its 2019 financial year was R550m, funded by cash reserves.

This will include the opening of about 48 stores in addition to the 12 Kenyan franchise stores.

BusinessDay 

Read more about: trade | sales | retailer | retail | mr price | fashion | earnings

Related News

SAFW competitions offers entry into fashion industry
19/07/2019 - 08:41
It opened the door for David Tlale to showcase his designs at New York Fashion Work, Mmuso Maxwell to supply his garments to retail giant Woolworths and Clinton Lotter to take his work to the UK. Now, South African Fashion Week (SAFW) is once again looking to grow the fashion and creative industry by opening it to emerging designers.

US retail sales rise as households spend more
18/07/2019 - 14:16
US retail sales increased more than expected in June, pointing to strong consumer spending, which could help to blunt some of the hit on the economy from weak business investment.

Strong Asia growth boosts Richemont’s first-quarter sales
18/07/2019 - 13:38
The luxury-goods company reports a 9% year-on-year increase at constant exchange rates.

Refinery celebrates diversity with new fashion campaign
18/07/2019 - 11:39
Local fashion retailer Refinery is set to make waves across the local industry with its new spring campaign which embraces diversity, encouraging others to be unashamedly, authentically themselves.

Amazon offers $10 to Prime Day shoppers for access to their data
18/07/2019 - 09:53
Amazon.com has a promotion for US shoppers on Prime Day, the 48-hour marketing blitz that started recently: earn $10 of credit if you let Amazon track the websites you visit.