MR PRICE GROUP REPORTS STRONG FIRST QUARTER
MR PRICE GROUP LIMITED
Registration number 1933/004418/06
Incorporated in the Republic of South Africa
ISIN: ZAE000026951
JSE share code: MPC
MR PRICE GROUP REPORTS STRONG FIRST QUARTER
[Cape Town, 29 July 2002] At the Mr Price Group Annual General Meeting held on
Friday, Joint Chairman Laurie Chiappini said "The group has experienced a good
start to the new financial year, with trading profits for the first quarter
ahead of budget. This trend has continued into July which is the start of the
summer season. The company is on track to again achieve a meaningful increase in
earnings for the year ending March 2003."
The group recently announced an expansion programme which foresees a R500-
million investment for the group over the next three years which will be funded
from internally generated cash flows. The programme will be largely focused on
store expansions and renovations in the cash division to allow for the
introduction of new merchandise departments and growth in sales. An 80% increase
in space is envisaged across the Mr Price Weekend Material, Mr Price Home and
Sheet Street brands.
"The response of property developers to our expansion plans has been excellent"
said Chiappini. "We have already secured nearly 40% of the 150 000 square metres
we were looking for by 2005, and should be trading in this secured space by this
Christmas. The new space includes large stores secured in Century City,
Tygervalley, Gateway (Umhlanga), Kollonade (Pretoria) and N1 City."
"We have been testing new categories of merchandise in the larger stores and the
results are very positive. It has been a battle to keep pace with customer
demand", he added. He referred in particular to new and expanded departments
like Red Surfwear, Oakridge, the Body Material underwear range, and the Kitchen
Confidential range of kitchenware which have been enjoying success in the
recently expanded Mr Price Weekend Material and Home stores.
Joint Chairman Stewart Cohen said that while some had described the expansion
programme as "ambitious", it was nothing more than "right-sizing" the business.
"We have simply outgrown our stores, which until now have averaged only 350
square metres across the Mr Price brands in apparel and home.
"While some of the Mr Price stores are expanding to around 800 square metres,
the Mr Price chain average will only increase to 480 square metres over the
three year period. Despite some initial declines in sales density, turnover and
profits within the test stores have increased on average by 60%. The excellent
return on investment from the expansion programme creates a very attractive
investment opportunity for the strong positive cash flows being generated by the
company" said Cohen.
Cohen said the new generation stores were a great improvement. "A visit to a
new generation store like Mr Price Home in Gateway is an eye-opener", he said.
"There is a vast improvement in the way the existing merchandise is presented
and the co-ordination is superb. The new departments and categories add to the
excitement. The store concept greatly improves both the value and the customer
shopping experience."
He said he expected the expansion programme to provide a powerful platform for
growth in market share and profitability in the future.
Ends
For further information, please contact Tamra Veley on (021) 426 1233 or 083 251
3658
Date: 29/07/2002 11:52:53 AM Produced by the JSE SENS Department
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