Mr Price Group Limited - Mr Price Sells The Hub
MR PRICE GROUP LIMITED
Incorporated in the Republic of South Africa
Registration number 1933/004418/06
ISIN: ZAE000026951
JSE share code: MPC
(`Mr Price` or `the Mr Price group`)
PRESS RELEASE
29 AUGUST 2005
MR PRICE SELLS THE HUB
Following the recent sale of the Galaxy Jewellery chain, the Mr Price
Group today announced that agreement had been reached for the sale of
The Hub division comprising 12 departmental stores and two shoe
stores. The purchaser of The Hub is a consortium of management and a
private investor supported by a leading financial institution. The
transaction, which is effective from 27 March 2005 is subject to the
conclusion of due diligence and certain conditions precedent. The Hub
recorded sales of R345 million in the past financial year.
The cash generated from the sales of The Hub and Galaxy would be
invested in the group`s expansion programme for its remaining chains
and other new concepts in the pipeline. The remaining chains achieved
combined sales of R4,0 billion in the 2005 financial year: Mr Price
(R2,2 billion) the home chains, Mr Price Home and Sheet Street (R1,2
billion) and Miladys (R0,6 billion).
In the 2005 financial year the two chains that have been sold
contributed approximately 13 cents to the reported group headline
earnings of 120,4 cents and the sales were concluded at prices close
to net asset value. The group`s long-term sales and profit targets
will not be significantly affected and the disposals will have a
positive effect on the group`s return on equity.
Commenting on the two transactions CEO, Alastair McArthur said `While
Galaxy and The Hub are good businesses with long track records, their
current return on investment is below the high level achieved by the
group`s other successful business models. Significant investment in
these two chains cannot be justified at present and thus their growth
prospects are limited inside our Group. They can however be very
successfully and profitably run as independent private companies`.
`The sales will allow our management team to focus on the four major
retail brands in the group, Mr Price, Mr Price Home, Sheet Street and
Miladys. These chains all have great growth potential and no further
disposals are contemplated`, said McArthur.
Date: 29/08/2005 12:47:06 PM
Produced by the JSE SENS Department
Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information.
