South Africa’s retailer Mr Price has come a long way since launching its mobile virtual network operator, which runs on a Cell C’s network since 2014. Three years later, thousands of customers are buying its cellular products and has diversified into financial services.
Its services are becoming an alternative to your traditional mobile phone companies, such as Vodacom, MTN, and Cell C, etc. They are also an alternative to traditional banks, such FNB, ABSA, Standard Bank, Nedbank and Capitec.
However, MR Price is only known for its affordable and quality clothes.
You may wish to know the amounts of money the company is making from the lucrative cellular and financial services.
The retail group announced on Tuesday that it has declared a 438.8c final dividend for the year to end April 2017, reflecting a 4.8% rise compared to the previous year. This was despite the company posting a 1.2% drop in revenue to R19 billion for the 52 weeks to April 1.
The group profit declined by 14.3% to R2.3 billion.
R387 million profit from cellular and financial services
Despite this poor performance, Mr Prices’ cellular and financial services divisions reported a 12.2% increase in operating profit to R387 million.
The two-star performers also generated R1 billion in sales, reflecting a 24.6% rise in the 52 weeks to April 1.
“The cellular margin improved from 6.4% to 15.7%,” said the company in a statement on Tuesday.
MRP Money, the financial services division, delivered double-digit profit growth. The primary financial products – store cards, airtime, and insurance – are positioned to reward and retain Mr Price most valuable customers.
The company said that sound credit management resulted in a net bad debt to retail book ratio improving to 5.3%. The provision for impairment of the debtors’ book of 7.3% is in line with last year. Insurance and cellular also performed well, with the latter including a R15m swing into profitability in the MRP Mobile joint venture.
MRP Money, increased 25.1% to R1.1 billion, driven by cellular which increased 55.1%, insurance 13.1% and debtors’ revenue 10.6%.