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Ttoday, South African retailer Mr. Price reported a decline in credit sales and an increase in write-offs Financial services activity, pushing the segment’s turnover down.
The retailer said financial services revenue declined 14.5% to 653 million rand of the year at the end of April.
The Financial Services segment manages Mr. Price’s trade receivables and sells financial services products
“Declining credit sales, increasing write-offs, lower interest rates and fewer new account approvals, all results of the impact of COVID-19 on consumers have affected performance,†the company said. .
“The total accounts receivable decreased 14.0% to R2 billion, and the group’s allowance for impairment increased to 13.4% of the accounts receivable in response to the further deterioration expected in the credit environment in 2022.
“As new account requests increased in the second half of the year, the approval rate for new accounts dropped to 32%, down from 34.3% in the previous period, as the group implemented additional income verification.
The retailer added that collections as a percentage of accounts receivable remained in line with the previous year throughout the second half of the year.
Mr. Price’s financial services and telecommunications businesses were previously presented as a single segment (financial services and cellular services).
However, the main decision makers have split into two segments for a more meaningful distribution as the Telecom business continues to grow. Comparative information has been restated.
Also read: How much money does Mr. Price make from telecommunications?
