Mark Blair-led Mr Price expects half-year earnings to jump by 30 percent thanks to strong retail trading operations

South African retail giant Mr Price Group Limited sees earnings rising more than expected as its financial performance benefitted from a strong boost in its retail trading operations.

In a trading update published on the Johannesburg Stock Exchange, the publicly traded retail company based in South Africa revealed that it expects its half-year profit for the period ending Oct. 2 to increase by between 30 and 40 percent.

In line with the projection, the leading retailer expects its headline earnings per share for the period to rise by between R4.336 ($0.2852) per share and R4.669 ($0.3069) per share, while basic earnings per share are expected to increase by between R4.212 ($0.2766) to 4.503 ($0.2957) per share.

Analysts believe that the double-digit growth in earnings expected by management is due to the base effect of lower earnings in the first half-year period of 2020 due to the COVID-19 pandemic and difficulties in the group’s operating environment.

During the affected base period, headline earnings per share declined by 24.8 percent, as all the group’s South African stores were closed during the nationwide lockdown between March 27 and April 30, 2020, with additional subsequent trading restrictions enforced as a result of COVID-19.

Information gathered by Billionaires.Africa revealed that a fast recovery is to be expected from retailers like Mr Price despite the drop in real income in the past two years and a record-breaking unemployment rate.

The group would have recorded an even higher growth in earnings, but the July civil unrest in South Africa hit its financial performance hard, as the group incurred impairment costs related to 111 stores that were damaged as a result of the violence.

In a bid to ward off the impact of these costs, the group received an interim insurance payment of R181 million ($11.9 million) from the South African Special Risks Insurance Association, and said it anticipates further payments in the second half of the year.

As of press time, Nov. 4, shares in the group were trading at R212.75 ($14), up 20 basis points in today’s trading session.

At the end of its 2020-to-2021 financial year, Mark Blair, the group CEO, received R18.8 million ($1.26 million) in compensation from the leading retail group.