termination of export partnerships and trading update

Mr Price Group Limited
Registration number 1933/004418/06
Incorporated in the Republic of South Africa
ISIN: ZAE 000026951
JSE share code: MPC

Press Release 31 March 2010

TERMINATION OF EXPORT PARTNERSHIPS AND TRADING UPDATE

The Mr Price Group today announced that it had brought to an end its involvement in export partnerships.

In previous annual financial statements and results announcements, the company had advised that it had been exploring the potential of unbundling the export partnership structures. The company has now successfully concluded its negotiations with all relevant parties. The unbundling provides certainty with regard to collection risks and eliminates exposure to future changes in the rates of tax, interest and exchange rates. The unbundling of the export partnerships has resulted in an impairment of R59m which will be reflected in the company’s income statement for the year ended 31 March 2010.

This impairment will not affect growth in core headline earnings per share, which is expected to be between 15% and 20%. After accounting for the once off impairment, growth in headline earnings per share is expected to be between 5% and 10%. As this impairment is once-off in nature and does not affect cash reserves at 31 March 2010, dividends will not be affected.

“Rather than run the partnerships out to their termination in 2018, it makes commercial sense to terminate them now at the current favourable exchange, interest and tax rates,” said CEO Alastair McArthur. “While there is some financial impact, it provides certainty and improved focus by eliminating a non-retail activity. It will also simplify our reporting of earnings which has been confusing with the inclusion of non-trading income from the partnerships”.

Durban
31 March 2010

Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)