Research archive for MRP

As breathtaking the rise of the Mr. Price share price was, the fall has been equally mind numbing. Except when it happens the other way around, it feels like ice water has been poured all over you on a winter day. A Mr. Price trading update on Friday afternoon caused the share price to fall into a heap, the stock was down nearly 18 percent by the close on Friday. What? This year the stock nearly clocked 200 Rand a share, a quick look Friday saw it close to 150 Rand. How is that possible? Total sales growth for the third quarter was a mediocre 6.5 percent for the group, with retail selling price inflation up at 6.6 percent. Effectively meaning that sales in inflation terms are flat. That was the last thing that Mr. Market needed to see and hear, with the stock trading on a pretty demanding multiple, the expectations are always high. One earnings miss, or a near miss, and the stock was flamed.

Mr. Price stock as discussed earlier fell sharply on their 6 month results release. Obviously with the half year results there is more information, basic EPS rose 15 percent to 426.2 cents per share, the dividend increased 17.3 percent to 248 cents. There is a pretty hefty 58 percent dividend payout policy. Mr Price revenues grew 9.2 percent to 9 billion Rand, cash sales growing faster than credit sales. Remembering that cash sales represent 81.4 percent of their total sales. If it means cash, it means that the customer pays for it, not necessarily cash, remember. i.e. You can use your bank credit card, that counts as a cash sale for Mr. Price, they get the money in the till.

Mr. Price stuck out a trading update yesterday, this was for their third quarter to end December, rather than the usual half year numbers that we have been seeing mostly. You would say that Mr. Price is a company that likes to offer fashion right now, at affordable prices, more affordable than their peer grouping. Perhaps in large part that has been the beauty of the success of the company, as they say in this release, they target young customers in the mid to upper LSM groups offering fashion at good prices. Against the corresponding quarter from the prior year, Mr. Price managed to grow sales by 14.2 percent, a fabulous achievement. The more I see from all of the clothing retailers (other than the first to report, Truworths), I am starting to get the sense that the average consumer is looking marginally better. What leads me to believe that the nearly three weeks that we have had this year so far (post the hurrah period) sales have been at a similar level from the prior quarter. The stock closed up 2.3 percent, near a record high.

Yesterday we received full year results from high flying retailer Mr Price. Wow, these guys deserve all the money they make. They have done fabulously well through good times and bad. Revenues increased 15.2% to R15.8bn. Headline earnings per share were up 22.4% to 715c while the dividend was increased by 21% to 482. The company has now achieved a 28 year compound annual growth in headline earnings per share of 23.4%. The share price has grown 27.1% on an annual basis since listing.

We have been receiving more updates from the retailers, both yesterday and now this morning. Let's start with Mr Price.

Yesterday Mr Price released full year numbers for the period ending 30 March 2013 which came in at the middle of the range alluded to by the trading update released at the beginning of the month. This company sure has been an amazing performer. And they remind you of this in the report, why not?

This morning we received a trading update from Mr Price which looked very good at the face. ...

At half past four yesterday we received another trading update from one of the retailers. These updates are really painting an interesting picture of the environment at the moment. The update was from Mr Price which at the face of it looked very disappointing. But as ever the market had already priced in the news. From trading at R145 on January the 7th it fell all the way down to R125.55 where it opened yesterday. It is currently trading just above R120 as I type this.

This morning we received the following trading update from high flyer Mr Price. "Basic earnings per share ("EPS") and headline earnings per share ("HEPS") of Mr Price for the 26 weeks ended 29 September 2012 are likely to be higher than the previous corresponding period by more than 20%. A range cannot be accurately estimated at this stage and shareholders are advised that a further trading statement will be issued in due course to provide earnings forecast ranges for EPS and HEPS as required by the JSE Listings Requirements."

Yesterday we had a 4 month trading update from one of the darlings of the JSE, Mr Price. The stock has been one big success story coming from R15.10 in July 2008 to R136 today, just short of a ten bagger which I'm sure we will see pretty soon. How did the update look? It was solid with 14.9% sales growth, 9.7% of that was from an increase in sales while the rest was due to price increases or inflation as retailers like to call it.

This morning we had a voluntary trading update from Mr Price. This company has set some high standards and again it has not disappointed. For the year ending 31 March 2012 they are expecting earnings per share to increase between 18 and 23%. It must be noted that this year for Mr Price is a 52 week year compared to the prior 53 week year. From a personal view I actually haven't bought an item from Mr Price in a while. Not because I don't like their products but more because the queues are always so long. A good sign of course.

This morning we had a trading update for the third quarter (2 October 2011 to 31 December) from Mr Price. Wow that was quick, maybe Stats SA should take note. As expected it was good news from the guys who seem to get it right every time. Sales grew 15.9% compared to the festive season of 2010.

Yesterday we had unaudited group results for the 26 week period ending 1 October 2011 from the ever impressive Mr Price. 367 Mr Price stores, 143 Mr Price Home store, 45 Mr Price Sports, 191 Milady's and 232 Sheet-Streets all ticking away at a good pace. That is 978 stores which includes 20 franchises and 49 stores outside of SA. They employ 18 176 people. Nice.

Mr. Price results released for 53 weeks to end 2 April 2011. 53 weeks? Well, they are a retailer, so everything is measured in weeks. How did you do this week, last week, and so on.... But they do also give a 52 week performance too, for the benefit of those anxious types. 180 million units sold, that is an increase of 9.9 percent (we are NOT going to be anxious and stick to 53 weeks reported OK?) on the prior period. That translated to a revenue increase of 13 percent to 10.973 billion ZAR, earnings of over one billion ZAR for the first time to 412 cents per share. Which is an increase of 51 percent on last year!! With a fairly generous dividend cover of 1.6 times the dividend increased to 252 cents per share.

Byron's beats. Senor Price, or just plain old Mr. Price is roaring ahead. You know the expression, cheap for a reason? Turns out the opposite in the case of the equities market is sometimes true too, expensive for a reason. About to turn cheaper.