MPC - Mr Price Group - Termination of export partnerships and trading update
MPC
MPC
MPC - Mr Price Group - Termination of export partnerships and trading update
Mr Price Group Limited
Registration number 1933/004418/06
Incorporated in the Republic of South Africa
ISIN: ZAE000026951
JSE share code: MPC
Press Release
TERMINATION OF EXPORT PARTNERSHIPS AND TRADING UPDATE
The Mr Price Group today announced that it had brought to an end its involvement
in export partnerships.
In previous annual financial statements and results announcements, the company
had advised that it had been exploring the potential of unbundling the export
partnership structures. The company has now successfully concluded its
negotiations with all relevant parties. The unbundling provides certainty with
regard to collection risks and eliminates exposure to future changes in the
rates of tax, interest and exchange rates. The unbundling of the export
partnerships has resulted in an impairment of R59m which will be reflected in
the company`s income statement for the year ended 31 March 2010.
This impairment will not affect growth in core headline earnings per share,
which is expected to be between 15% and 20%. After accounting for the once off
impairment, growth in headline earnings per share is expected to be between 5%
and 10%. As this impairment is once-off in nature and does not affect cash
reserves at 31 March 2010, dividends will not be affected.
"Rather than run the partnerships out to their termination in 2018, it makes
commercial sense to terminate them now at the current favourable exchange,
interest and tax rates," said CEO Alastair McArthur. "While there is some
financial impact, it provides certainty and improved focus by eliminating a non-
retail activity. It will also simplify our reporting of earnings which has been
confusing with the inclusion of non-trading income from the partnerships".
Durban
31 March 2010
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 31/03/2010 14:01:02 Produced by the JSE SENS Department.
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