Mr Price increases dividend despite drop in profit

Mr Price. Picture: FREDDY MAVUNDA

RETAIL group Mr Price opted to shield its shareholders from its drop in sales and profit by raising its final dividend to match the previous year’s total.

Mr Price raised its final dividend 4,7 percent to 438,8c after cutting its interim dividend by eight percent to 228,2c, thereby maintaining its dividend for the year at R6,67.

But the government increasing dividend withholding tax to 20 percent from 15 percent means shareholders will receive less cash.

Mr Price reported that its overall revenue for the 52 weeks to April 1 declined 1,2 percent to R19,8bn and its aftertax profit fell 14,3 percent to R2.3bn.

Its clothing chains suffered a 24,2 percent drop in operating profit to R2bn while limiting its slide in sales to 3,2 percent, ringing up R13.7bn.

Its MRP Home and Sheet Street chains managed to grow operating profit 3,6 percent to R822m on flat sales of R4.9bn.

The group’s smallest division, financial services and cellular, was its best performing, growing operating profit 12,2 percent to R387m and sales 24,6 percent to R1bn.

“The year proved to be exceptionally challenging for the retail sector. Consumer confidence remained low as a result of the poor state of the local economy and a lack of faith in the current political leadership’s ability to set high standards of governance and deliver inclusive growth,” CEO Stuart Bird said in the results statement.

“Cabinet reshuffles and downgrades by ratings agencies have caused further exchange-rate volatility, which the consumer ultimately has to absorb. As a result, the retail environment has become more competitive, with any growth in a stagnant market coming from increased market share. This has led to retailers in our sector increasing their promotional activity to drive sales and manage stock levels.” –www.businesslive.co.za