Mr Price’s clothing and financial services operations drove earnings growth in the first half, in which the homeware and sportswear operations were hit harder by the moribund economy.

An interim dividend of 279c per share was declared, up 22.3% from the year-earlier interim dividend.

Headline earnings per share (HEPS) for the six months to end-September grew 22.2% — right in the middle of recent guidance for a 20%-25% increase — to 442.9c, with diluted HEPS up 23.6%. Basic earnings per share (EPS) rose 21.9% and diluted EPS were up 23.2%.

Revenue rose 6.7% to R9.8bn, made up of R9.1bn in retail sales (up 6.4% from a year earlier); R576m in other income, which includes cellular services (up 6% from a year earlier); and R67m in net finance income, which was up almost 90% from R35m a year earlier.

Operating profit rose 22% to R1.5bn.

In its results statement, Mr Price emphasised margin improvements, keeping growth in input costs to 3.9%. The operating margin improved by 200 basis points to 15.7% of retail sales and other income and the gross margin was 280 basis points better at 42%.

Retail sales and other income is revenue excluding R67m in finance income, and was R9.7bn.

Of that, the apparel operations contributed R6.9bn, up 9% from a year earlier. Mr Price Home contributed R2.3bn, down 0.6%; and financial and cellular services R545m, up 3.9%.

Operating profit from the apparel segment surged 42.5% to R1.1bn, while at Mr Price Home’s operating profit declined 16.2% to R305m. Financial and cellular services’ operating profit was up 11.2% to R202m.

Central services, the division that provides services to the trading segment, posted an operating loss that was 25% wider at R92m.

Interestingly, in SA online sales growth far outstripped in-store sales growth in the apparel segment, at 29.7% against 10.5%.

Mr Price said the apparel division had the highest number of Facebook fans and Instagram followers in the South African fashion retail sector, and YouTube views had more than doubled. "With regard to the impact of foreign retailers, our numbers show that our sales growth is generally better in locations where we compete with them," said CEO Stuart Bird.

Cash generated from operations rose 15.9% to R1.3bn, while cash resources of R1.6bn were up from R1.1bn a year ago.

The retail net bad debt to book ratio was 5.9% and an impairment provision of 7.3%.

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