Today, South African retailer Mr Price reported lower credit sales and increased write-offs in its Financial Services business, pushing the segment revenue lower.
The retailer said Financial Services business revenue decreased 14.5% to R653 million in the year to end April.
The Financial Services segment manages Mr Price’s trade receivables and sells financial services products
“Lower credit sales, increased write-offs, lower interest rates and fewer new account approvals, all results of COVID-19 consumer impact, affected performance,” the company said.
“The total debtors’ book decreased 14.0% to R2 billion, and the group’s impairment provision increased to 13.4% of the debtors’ book in response to the expected further deterioration of the credit environment in full-year 2022.
“While new account applications grew in the second half of the year, the new account approval rate dropped to 32% from 34.3% in the prior period, as the group implemented additional income verification measures.”
The retailer added that collections as a percentage of the debtors’ book remained in line with the prior-year throughout the second half 0f the year.
Mr Price’s Financial Services and Telecoms Business were previously presented as one segment (Financial Services and Cellular).
However, the chief decision-makers have separated into two segments for a more meaningful breakdown as the Telecoms business continues to grow. The comparative information has been restated.