With load-shedding four times higher, Mr Price posts drop in half-year profit

Budget fashion retailer Mr Price on Thursday reported a 9.3% decline in half-year profit, hit by elevated levels of power cuts and as double-digit inflation in food and transport impacted its value customers more severely.

It reported headline earnings per share, a profit measure, of 449.9c for the 26 weeks ended September 30, down from 496 a year earlier.

Retailers in South Africa have been impacted by rolling power blackouts, sometimes lasting up to 10 hours a day, which have reduced trading hours and added the cost of running diesel generators.

Mr Price, which also sells homeware, said blackouts were four times higher in the first quarter than the same period in the prior year.

It spent R140m to accelerate its backup power solutions, which by the end of the first quarter had completely covered its core business compared with only 60% of its store base at the start of the quarter.

The group estimates a loss of 60,000 trading hours from power cuts, equivalent to about R190m in revenue in the half year.

Group revenue grew 26.4% to R16.8bn, with retail sales growth of 27.8%, helped by the acquisition of branded footwear and clothing company Studio 88.

Excluding Studio 88, retail sales grew 3.8% and comparable store sales fell 0.8% in the half year.

Reuters