Consumer Discretionary
Primaresearch’s analysis reveals MRP’s traditional chains have had modest top-line growth despite considerable space expansion over the past nine years. They also calculate the chains’ trading densities (which MRP stopped disclosing from FY22) and find evidence of flat / declining results. These trends are surprising, considering the weak macroeconomic environment, which should have supported value retailers. Management is working on initiatives to exploit scale opportunities, but these may be limited considering the divergent business models of the companies. Primaresearch forecasts diluted HEPS of R13.17 for FY25 (+5.2% Y/Y) and downgrades the stock to Sell.
Edition: 190
- 12 July, 2024