Potential Investors Report: Mr. Price Group
The Mr. Price Group is a fast growing retail group that has caught the eye of many investors not only in South Africa but across Africa as a whole. However, its status does not always necessarily mean that it is a good quality investment. Annual Financial Statements are designed to aid investors to make informed decisions about their investment. In this report, I will analyze the Mr. Price Group Annual Financial Statements for the year ended March 2011.The main financial statements I will analyze are Statement of Financial Position, Statement of Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flows to get useful ratios. Financial Statements are numbers that need to be interpreted into useful information that will highlight the Mr. Price’s financial strengths and areas of financial uncertainties. Mainly we seek to find how much debt there is, how much is the group actually making. However, in order to give a robust analysis we need to look beyond the statements and into the internal and external environment for threats and potential gains. A brief overview at Mr. Price Group as a whole.
The Group is a retail business consisting of the Apparel (Mr. Price Apparel, Mr. Price Sport & Milady’s) and the Home Chains (Mr. Price Home & Sheet Street). Its operations are in Botswana, Namibia, Lesotho and Swaziland. The entity celebrated its 25th year anniversary in 2011 since it started in 1985. The Apparel chain consists mainly of the entity has a well defined mission statement, “To add value to our customers live and worth to our partners whilst caring for the community and environment.” The Group aims to maintain sustainability which is a core factor known as ‘going concern’ when analyzing an entity for investing. The entity has the vision statement, ‘To be a top performing international retailer to keep it aligned with its long term prosperity goal. They claim passion to be engine that drives them which created by the golden rule of respect, trust, communication and recognition between employers and employees, customers and suppliers. Mr. Price focuses on targeting trendy 16-24 year olds throughout Africa as well as anyone looking to add a hint of modern design to their home. It looks to meet its customer needs and to enhance the brand thus creating a greater market share. Mr. Price employs over 20 000 employees and a steering towards employment equity with 91.6% black employees and 65.2% being females. It gets its staff motivated as well keeping them in line the entity’s vision through the Mr. Price Group Employees Share Investment Trust(facilitates purchase of share) and The Red Cap Foundation(skills development). It also recognizes and rewards employees on exceptional contributions to the company through cash incentives and awards such as the Mr. Price Group Medallion and the Running man award for long service Assessment of Management
The Board of Directors is in compliance with the King III principles and practices. The Chairman of the Board is Mr. AE McAuthur who was the former CEO his independence is questionable but the Group highlights its reasons for not complying with prescribed guidelines It has the following Committees; The Audit Committee, The Risk and Sustainability Committee, The Remunerations and Audit Committee. The standard of accountability to investors is important and thus it is important to have independent directors whose backgrounds have bee reviewed to understand them better. The Board composition of independent directors satisfies this requirement. The current CEO of Mr. Price Group is Stuart Bird CA (SA). He has managed the core apparel chain for seven years and has been serving the Group for 17 years before his current position. The CFO is Mark Blair CA (SA) and has served the group for the past 5 years. This is a good because the executive management is run by educated individuals. However, it can also be a risk...
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