Mr Price gives the realistic view

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Mr Price gives the realistic view

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Published Date: 2021-07-15 | Source: INCE|Community | Author: The Finance Ghost

Mr Price gives the realistic view

Mr Price is in the unenviable position of having its head office in Durban. The group had a front row ticket to the destruction of its assets.

As the group so rightly points out, the catalyst for the uprising is "several complex factors" and Mr Price goes on to condemn outright criminality. These are sentiments that we all share.

Thus far, 109 stores have been entirely looted. That's around 7% of the total footprint. To make it worse, a further 539 stores have been temporarily closed across the six divisions.

Unsurprisingly, most of the impact is in KwaZulu Natal.

Mr Price also makes realistic statements about its insurance with SASRIA. While the state-owned insurance company has tried to allay fears in the market, I personally cannot see how they can afford to cover everything. Mr Price alludes to this by noting the risk of claim pay-outs being "delayed and possibly impaired" - one of the first public examples I've seen of a proper view on the SASRIA situation.

The immediate priorities are to ensure the safety of staff and the prevention of further damage to the store estate. The next priority is to open the unaffected stores and to restore trade in the damaged stores.

Again, Mr Price is realistic here. The group notes the restocking challenge, referencing the Durban port and the ability of local suppliers to continue production.

It's encouraging to see a leadership team acknowledge the immense challenges going forward. Although Mr Price closed 4.46% up yesterday to end just 1.7% down over two days of horror, this announcement was released after the market closed.

If you're looking for the best test of whether the destruction has been "priced-in" by the market, watch the Mr Price share price today. I applaud the management team for saying it like it is.





1 Comments

Zain Khan. TITANIUM. KHAN'S TRANSPORT and LOGISTICS 2 weeks ago

I have been working together with the Mr Price Group for more than 18/20 years.Mr Price Group has always stood up for the community,staff,employees,suppliers,Transporter's and logistic companies that are contracted with them. I am truly saddened that a company like Mr Price has to feel the pinch. #sad



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