Mr Price’s 1H22 results showed a strong recovery off a low base, with the acquisitions also boosting topline growth. In MRP Apparel, we estimate that comparable volume may still be -4.1% lower than pre-pandemic levels, but this may be due to the unrest impact. Apparel OPM has improved in 1H21, but we think that the lower-margin Power Fashion could limit future gains. The Home division has rebounded well, and Yuppiechef has had a minor impact with only R72m sales contribution. Home OPM reached a high of 19.0% in 1H22, but it is questionable whether margins at these levels are sustainable. Product-mix changes with more higher-margin furniture sales contributed to the higher OPM. MRP’s unit sales have been flatlining in recent years, and we calculate that the acquisitions added 21.6m units to volume. Power Fashion contributes 7% to sales but 18% to volumes. We were concerned that the high volumes of Power Fashion’s low-value product could consume distribution capacity, but management said its supply chain would remain separate from MRP.
