Mr Price half year numbers

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.

Loads of regulatory activity in Nigeria impacting on many businesses and no doubt consumers too, Mr Price: "Trading in Nigeria was initially strong, but slowed appreciably in the last two months due to recently imposed restrictions on imported merchandise. Although these are expected to be temporary, the Company's interactions with regulators are focused on urgently re-enabling supply." How NOT to fix your economy, place restrictions on the only people investing in it, SMH.

CEO of Mr. Price, Stuart Bird, had rather more sobering news about the local lay of the land: "The economy is not in good shape and consumer confidence is understandably low, but our resilient fashion value model is built to withstand these conditions". Whilst Mr. Market was obviously looking for an Oliver Twist print (we want more), the results looked good to me. However, when your stock trades on a 25 multiple, the market expects more.

Expectations are for the company to deliver in excess of 10 Rand in earnings for the full year to March, and growth rates in revenues are expected to be in the 12-14 percent range. Earnings are expected to grow by the high teens, percentage wise. As such the current rating looks a little cheap. Whilst we like the company, and the prospects look good (the share price equally looks good at current levels), the truth is with Woolworths and Brait in our portfolios, you cannot own everything. If you are looking for extra retail exposure, this is more than a "decent" company, which we are comfortable to own as supplementary exposure.