South Africa’s retailer Mr Price’s cellular division, MRP Mobile, reported a 5% drop in revenue in the 26 weeks ended 30 September.
The retailer attributed a reduction in revenues to product mix changes which delivered higher profitability.
MRP Mobile runs on a Cell C’s network since 2014.
Its services as one of South Africa’s mobile virtual network operators are becoming an alternative to your traditional mobile phone firms, such as Vodacom, MTN, Telkom and Cell C, etc. They are also an alternative to traditional banks, such FNB, ABSA, Standard Bank, Nedbank and Capitec.
Mr Price also offers financial services through MRP Money.
The retailer announced on Monday that its diluted headline earnings per share (HEPS) of 23.6% to 434.1 cents in the 26 weeks ended 30 September. HEPS is South Africa’s main profit gauge.
It added that total revenue rose 6.7% to R9.8 billion as total retail sales of R9.1 billion.
However, Mr Prices’ cellular and financial services divisions reported a 3.9% increase in sales to R545 million.
The product mix in the cellular division helped to push up profit in Mr Prices’ cellular and financial services divisions by 11.2% to R202 million versus R181 million.
The division’s assets also rose by 7.2% to R2.2 billion.
MRP Money, the financial services division, recorded an increase in interest and credit related charges of 6.6% and insurance products of 15.2% in the 26 weeks ended 30 September.
The primary financial products – store cards, airtime, and insurance – are positioned to reward and retain Mr Price most valuable customers.
Mr Price is relying on summer sales to generate more revenues.
The company informed investors on Monday that it is very concerned about the potential impact relating to sovereign ratings reviews and political outcomes. “However, the positive early signs of summer trading are encouraging, with October sales increasing by 8.3% and further momentum being gained going into November.”