Mr Price prepares to go shopping


Mr Price prepares to go shopping

Published Date: 2020-05-21 | Source: Stephen Gunnion | Author: Stephen Gunnion

Mr Price prepares to go shopping

The retailer says internal market research has identified attractive growth areas that a capital raise will enable it to pursue.

Mr Price is planning an equity raise so it can take advantage of growth opportunities that arise in the beaten-down retail sector. The clothing and homeware retailer says it will ask shareholders for the authority to issue shares for cash not exceeding 10% of its current ordinary share capital at a general meeting next month.

Although the retailer didn't generate any revenue during the lockdown in late March and the whole of April, it said its current financial position remained sound, with positive cash resources and a debt-free balance sheet to support current business operations. Cash flow generation and balance-sheet strength would continue to be central to its strategy, it said.

Mr Price said internal market research had identified attractive growth areas and a capital raise would enable it to pursue and accelerate these opportunities, organically or through acquisitions.

The group said it had set clear guidelines for possible acquisitions, including geography, market sector, growth opportunity, size and valuation and that it would maintain financial discipline. Its focus was also on several growth opportunities in South Africa rather than a single large acquisition or offshore expansion.

The general meeting will be held on 29 June.

After trading mostly firmer yesterday, Mr Price's shares closed 3.6% lower at R119, valuing the company at just over R30 billion. The announcement was made just before the end of trade.

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