Record Revenue and Telecom Gains Fail to Reignite Mr Price (MPR) Share Rally
Despite strong growth in telecom sales and record revenue, Mr Price’s share price reaction suggests investors are holding back, hinting at..
Quick overview
- Mr Price Group reported record revenue exceeding R40 billion, driven by strong performance in its telecom division and a solid second-half recovery.
- Despite positive financial results, the company's share price faced resistance at the 200-day moving average, indicating investor hesitation.
- The retailer's full-year diluted headline earnings per share increased by 10.1%, reflecting effective inventory management and resilient consumer demand.
- Going forward, Mr Price's ability to sustain earnings growth will depend on navigating consumer pressures and overcoming technical resistance in the stock market.
Despite strong growth in telecom sales and record revenue, Mr Price’s share price reaction suggests investors are holding back, hinting at waning momentum in its long-term rally.
A Strong Year Overshadowed by Technical Resistance
Mr Price Group (JSE: MRP) posted a solid performance for the 52-week period ending March 29, driven by robust second-half trading and a standout performance from its telecoms division. Group revenue exceeded R40 billion for the first time—a significant milestone that highlights the company’s operational expansion and strategic execution across multiple segments. CEO Mark Blair acknowledged the difficult start to the year but emphasized that strong recovery in the latter half, particularly in comparable store growth and gross margin improvements, propelled the group toward a strong close.
The retailer’s telecom division, which includes Mr Price Cellular and Powercell, delivered a particularly impressive performance. Retail sales from the segment climbed 13.2% to R1.3 billion over the year. Market share gains were sustained throughout the period, with the division showing steady traction and closing the financial year strongly after beginning in April 2024 at R175.70 and ending March 2025 at R221.40.
Muted Market Response Raises Questions About Momentum
However, the upbeat financial report failed to inject new enthusiasm into the market. While Mr Price’s share price edged higher to 25,000.00 ZAC following the release, it soon met stiff resistance at the 200-day simple moving average (SMA), a historically significant barrier.
The price action reflected a lack of conviction among buyers to continue the uptrend, despite the strength of the results.
MPR Chart Daily – Closed Friday Unchanged
This hesitation may also be linked to broader market fatigue. Mr Price’s stock has experienced a choppy long-term trend since 2015. While occasional new highs have been reached, these peaks have often been followed by significant pullbacks.
One such instance occurred in December when the share price touched a record 30,220.00 ZAC, only to reverse sharply and fall roughly 40% to 18,600.00 ZAC by April. Following that drop, the price rebounded, supported by long-term monthly moving averages. But this recovery has plateaued over the past two months.
MPR Chart Monthly – Closed Friday Unchanged
Friday’s price behavior, particularly the failure to decisively clear the 200-day SMA despite positive annual results, may signal a waning appetite among investors, or at least a need for clearer forward guidance before the rally can resume.
Impressive April 2025 – March 2025 Mr Price Financial Results
Mr Price’s full-year performance underlines the strength of South African retail resilience amid a challenging macroeconomic backdrop. While the broader retail sector faced headwinds from seasonal disruptions and sluggish consumer spending early in the year, Mr Price’s agile operational approach, coupled with disciplined merchandise execution, drove strong second-half results and solid margin gains.
The improved gross margin and reduced markdowns demonstrate enhanced supply chain alignment and customer targeting, particularly in the group’s fashion, sportswear, and appliance segments. With a strong dividend payout and improving top-line momentum, Mr Price enters the new financial year with solid footing.
Key Highlights from Mr Price’s Full-Year Results:
- Mr Price reported a 10.1% increase in full-year diluted headline earnings per share (HEPS), reaching R13.79, driven by a solid second-half performance and efficient inventory management.
- Operating profit grew by 8.9% year-on-year to R5.8 billion ($327 million) for the 52 weeks ending March 29, reflecting steady execution despite sector volatility.
- The company saw group revenue rise by 7.9% to R40.9 billion, while retail sales rose 7.8% to R39.4 billion, reflecting resilient consumer demand.
- Comparable store sales climbed 3.4%, showing underlying growth despite external economic pressures and calendar shifts.
- Gross profit margins improved by 80 basis points, now standing at 40.5%, credited to better merchandise planning and fewer markdowns, supporting stronger profitability.
- In the second half of the fiscal year, retail sales growth accelerated to 9.9%, with comparable store sales up 5.7%, highlighting a robust post-holiday rebound and adaptive inventory strategies.
- Despite sector softness in February and the holiday calendar shift pushing school holidays and Easter into April, Mr Price maintained strong retail momentum.
- The company declared a final dividend of 593.50 cents, up 12.7% year-over-year, reflecting confidence in cash flows and shareholder value creation.
Going forward, sustainability of earnings growth will hinge on continued margin protection, execution in high-growth categories, and the ability to navigate consumer pressure in a fluctuating interest rate environment. Still, the company’s latest results position it well among South Africa’s top-performing retailers.
Conclusion: Market Awaits a Clearer Signal
While Mr Price’s operational and financial strength remains evident—bolstered by a fast-growing telecom arm and margin-enhancing strategies—the share price suggests that technical levels and investor sentiment are not fully aligned with the company’s recent success. Unless the price can push beyond key resistance levels with volume, the risk remains that the stock could drift sideways or even revisit recent support levels.
Ultimately, Mr Price finds itself in a familiar position: fundamentally solid, yet technically constrained. Investors may require more than just positive earnings to commit fully—perhaps a clearer macro backdrop, improved consumer sentiment, or a breakthrough above the 200-day SMA to confirm renewed bullish momentum.
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