Our analysis show the division has been unable to capitalise on the market share losses of the ailing Edcon. We are concerned by the stock build up in MRP and calculate that the excess stock in FY19 could amount to ZAR336m, and markdowns on this stock could reduce GPM by 80-120bps. We look at the MRP B-ordinary shares and estimate their conversion the current MRP share price could have a c. 3.2% dilution of HEPS.
