The Mr Price Group expects the global economy to see a recovery in 2021, off the low base created by Covid-19 and associated lockdowns.<\/p>\n
The group, which published its annual results on Thursday (27 May), said it only expects a full recovery to\u00a0pre-pandemic levels in 2023 across most nations.<\/p>\n
It added that the true state of consumer finances in South Africa will likely be revealed in the coming months as government benefits end and the road to recovery starts.<\/p>\n
“South Africa experienced fiscal distress due to Covid-19 which impacted domestic demand. However, this was softened by temporary relief measures provided by the government, the brought the TERS and Covid-19 relief grant, and private sector credit providers.<\/p>\n
“These relief measures have largely come to an end and the true state of the consumer environment is most likely to be revealed in the short to medium term.”<\/p>\n
The group said that it has benefitted from consumers receiving short term financial assistance, but believes that the primary reason for its outperformance since the level 5 lockdown is due to its superior merchandise assortment and strong value offering to customers.<\/p>\n
Results<\/strong><\/p>\n The group’s full-year 2021 year-end results for the 53 weeks ended 3 April 2021 showed HEPS increased 2% to 1 067.9 cents.<\/p>\n Diluted HEPS increased 1.9% to 1 049.0 cents and basic earnings per share decreased 1.8% to 1 023.6 cents impacted by a once-off impairment of intangible IT assets in the first half of the year.<\/p>\n Total revenue from continuing operations decreased 2.9% to R22.3 billion with retail sales decreasing 2.4% to R21.2 billion. In H2, retail sales increased 8.5% and the group gained 180bps of market share.<\/p>\n Profit from operating activities decreased 7.3% to R3.7bn, significantly affected by restrictions in H1 and operating margin declined 80bps to 16.7% of retail sales and other income.<\/p>\n Annually, other income decreased 15.7% to R860 million, negatively impacted by lower credit sales, attrition in insurance premiums and repo rate cuts of 275bps (since January 2020) impacting interest earned on the credit book.<\/p>\n The other key highlights from the period were:<\/p>\n\n
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