Retailer Mr Price says profits have rebounded from SA’s hard lockdown in 2020, but civil unrest has shaved off almost R90m in earnings.
Headline earnings per share (HEPS) are expected to rise by between 30% and 40% in the six months to October 2, the group said in an update, a profit rise of about R346m.
When normalised for the effects of asset write-offs due to the civil unrest in July, this profit measure would have risen by between 40% and 50%, Mr Price said, or a profit rise of up to R432m.
Civil unrest throughout KwaZulu-Natal and parts of Gauteng in July resulted in the looting of 111 of the group’s 1,592 stores, or about 7%.
An interim insurance payment of R181m was received after the end of the period, Mr Price said, resulting in a timing difference between asset write-offs and the receipt of insurance proceeds.
“The group continues to carry the costs of the looted stores since the looting, despite not being able to trade and generate income,” the statement read. Associated business interruption losses were being assessed, with Mr Price expecting further payments to be received in the second half of its 2022 year, and the first half of 2023.
Mr Price attributed the rise in earnings to an improved retail trading performance against the low base in the previous comparative period.
All the group’s SA stores were closed during the nationwide lockdown from March 27 until the end of April 2020, with additional subsequent trading restrictions enforced due to the Covid-19 pandemic. HEPS declined by 24.8% in the previous period.
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