Mr Price lifts interim earnings

Its diluted basic earnings per share rose to 172.5 cents from 140.8 cents earlier.

The group declared a dividend per share of 93.6 cents from 76.7 cents, up 22%.

Revenue increased to R5.444 billion from R4.915 billion, while profit from operating activities increased to R679.47 million from R538.78 million in 2010.

CEO Stuart Bird commented: "Sales growth was impacted by the high base set by the extended school holidays associated with the FIFA World Cup 2010, which took place in June and July last year. Excluding these two months sales growth amounted to 14.3%."

Retail sales for the period increased by 10.7% to R5.282 billion, while sales in like-for-like locations were up by 9.6%.

The company's apparel chains increased sales and other income by 11.2% to R3.9 billion, with comparable sales up by 8.8% and retail selling price inflation of 5.1%.

Operating profit grew by 19.0% to R626.6 million and the operating margin increased from 15.4% to 16.5% of retail sales.

Mr Price Apparel recorded sales growth of 11.2% (comparable 8.8%) to R2.9 billion - 55.7% of group sales, and operating profit was well ahead of the prior period.

Mr Price Sport opened four new stores which contributed to sales increasing by 20.5% (comparable 7.6%) to R293.6 million and exceeded budgeted profitability levels.

Miladys increased sales by 6.4% to R514.7 million despite closing a net six stores.

The Home chains increased sales and other income by 9.7% to R1.5 billion, with comparable sales up by 11.5% and retail selling price inflation of 6.6%.

Operating profit rose by 57.3% to R130.5 million and the operating margin increased from 6.1% to 8.8% of retail sales.

Mr Price Home increased sales by 7.8% (comparable 9.8%) to R1.0 billion, while Sheet Street increased sales by 14.0% (comparable 14.9%) to R468.9 million and operating profit significantly exceeded both the prior year and budgeted levels.

Bird said that 81% of all sales were for cash and the business model had enabled the company to maintain our strong balance sheet.

"Despite increased dividends, capital expenditure more than doubling and purchasing treasury shares to the value of R211.1 million, we ended the period with cash resources of R900.0 million," he added.

The decision taken to extend more credit to high performing account holders resulted in gross trade receivables increasing by 11.6% from R854.7 million to R954.0 million.

The book had continued to be well managed, with a net bad debt to book ratio of 4.1% and is adequately provided against at period end, the company said.

On Tuesday, Mr Price also announced that executive chairman Alastair McArthur would be retiring at the end of the year and that Nigel Payne would become independent non-executive chairman.

Both changes will be effective on 1 January 2012.

Looking ahead the group said that it expected retail trading conditions to remain tough, but was encouraged by positive October sales growth, which augurs well for the festive season.

"Sales growth will be supported by the group actively pursuing space expansion opportunities, the introduction of new generation stores in November in the three Mr Price chains, which are designed to further improve customers' shopping experiences, and by opening a first test store in Nigeria in March 2012," it added.