Mr Price : Reports Interim Results for the 26 weeks ended 26 September 2020

MR PRICE GROUP LIMITED Registration number 1933/004418/06 Incorporated in the Republic of South Africa ISIN: ZAE 000200457

LEI number: 378900D3417C35C5D733

JSE and A2X share code: MRP

("Mr Price" or "the company" or "the group")

UNAUDITED INTERIM GROUP RESULTS FOR THE 26 WEEKS ENDED 26 SEPTEMBER 2020 AND CASH DIVIDEND DECLARATION

This short-form announcement is the responsibility of the Mr Price Group Limited board of directors and is a summary of the information in the detailed results announcement available on: https://senspdf.jse.co.za/documents/2020/JSE/ISSE/MRPE/26112020.pdf and https://www.mrpricegroup.com and does not contain full or complete details. These documents and the results presentation to the investment community are available on the group's website at www.mrpricegroup.com and copies may be requested from the company secretary ([e-mail] or [phone]) at the company's registered office. Any investment decision in relation to the company's shares should be based on the full announcement.

PRESS RELEASE

MR PRICE GROUP LIMITED REPORTS INTERIM RESULTS ENDED 26 SEPTEMBER 2020, DECLARES A CASH DIVIDEND AND ANNOUNCES A NEW GROWTH AGENDA

Mr Price today released its interim results for the 26 weeks ended 26 September 2020, a period in which the group absorbed the full impact of the COVID-19 pandemic, both in terms of operational disruptions (trading restrictions and port delays) and consumer behaviour impact (erratic demand). The group's cash-based, fashion- value business model has enabled a stronger performance than originally anticipated which has allowed management to continue its focus on growth opportunities. The key highlights from the period were:

• Post Lockdown*, diluted headline earnings per share grew 6.0%
• Market share gain for the full period as reported by the Retailers' Liaison Committee
• Online sales grew 71.5% from May 2020, accounting for 2.5% of sales
• Increased GP margins by 200bps to 42.0%
• High cash conversion raising the group's cash balance to R6.4bn
• Debt free balance sheet maintained
• Planned double-digit decrease in inventory on hand achieved
• Strong overhead management curtailing expense growth to below inflation
• Dividends declared of 210.1 cents per share, resumption of a pay- out ratio of 63.0%
• Share buybacks to the value of R85m (Additional R80m purchased in

H2 to date)

- Agreement signed to acquire local value apparel retailer

*The impact of the April 2020 store closures due to COVID-19, distorts the performance comparison between the results of the current and prior periods. To provide a more meaningful assessment of the group's performance, pro forma information has been presented for the period May to September 2020 ("Post Lockdown").

FINANCIAL PERFORMANCE

The H1 period has been presented with significant challenges and uncertainty due to the COVID-19 pandemic. The government enforced lockdowns have had a material impact on the economy and on household income. Over two million jobs were lost during Q2 2020 and the unemployment rate rose to 30.8% in Q3 2020, its highest level in 17 years. During the month of April 2020, the group estimates that it lost approximately R1.8bn in sales as all its South African stores were forced to close. In May 2020, further restrictions on items permitted to be sold in the Home segment were enforced. As a result, management were anticipating the impact on earnings growth to be more substantial than what has transpired. The value of partnership has been displayed by all stakeholders, collectively embracing the call to action.

Basic earnings per share decreased 34.5% to 290.5 cents, headline earnings per share (HEPS) decreased by 24.8% to 333.5 cents and diluted headline earnings per share decreased by 24.6% to 328.5 cents. As disclosed in the trading statement released on the Stock Exchange News Service (SENS) on 4 November 2020, the difference between basic and headline earnings per share was the result of a R153.4m IT and right-of-use assets (store leases) impairment assessment. Excluding the April 2020 lockdown, HEPS and diluted HEPS grew 5.9% and 6.0% respectively.

Total revenue from continuing operations (discontinued operations in Nigeria) decreased 14.4% to R9.2bn with retail sales declining 14.8% (comparable stores -18.0%) to R8.6bn. Despite this, the group grew market share by 100 basis points over the period and excluding April 2020, retail sales grew 3.2% (RSA up 3.7%). Other income decreased 13.6% to R433m, impacted negatively by the weak credit environment and repo rate cuts of 300bps this year. Interest earned on cash grew 12.1% to R149m. Cash sales declined 12.5% (credit sales declined 27.3%) but contribution to total sales increased to 85.4% of group retail sales. Consumers continue to prefer to transact in cash as their capacity to take on higher levels of household debt has been further compressed. Retail selling price inflation of 3.9% was driven by more full priced items sold over the period.

The group's identified capex savings for FY21 resulted in 10 less stores opening in H1 than originally planned. Despite this, 17 new

stores were opened, with the group expanding 2 stores, closing 9 and reducing the size of 12. This takes the total number of corporate owned stores to 1 386. Weighted average space growth was 2.2% and the group's store investment hurdles remain tightly managed. On an annualised basis, the number of loss-making stores remains immaterial, supporting the group's low right-of-use-asset impairment charge. The group renewed 125 leases in the period, resulting in average escalations decreasing and targeted rental reversions being achieved.

Merchandise GP margin improved 240bps to 43.2% as a strong value assortment across divisions resulted in low markdown levels. Telecoms (Mobile and Cellular) GP margin increased 260bps driven by strategic mix changes in Mobile and significant sales growth in Cellular handsets and accessories. Total group GP margin gains of 200bps were achieved with improvements across the group's Apparel, Home and Telecoms segments. Excluding April 2020, gross profit Rands grew 9.4%.

Selling and administration expenses were tightly controlled with growth of 2.2% well below inflation. Excluding impairments and additional debtors' provision, expenses declined by 4.5%. This performance was supported by management's identified austerity measures as well as government support initiatives. Expenses were negatively impacted by the impairments detailed above. Profit from operating activities from continuing operations declined by 32.0% to R1.1bn with operating margin decreasing to 12.7% of retail sales and other income (RSOI). Excluding April 2020 and the above-mentioned impairments, the operating margin increased by 40bps to 16.0%.

As targeted, inventory on hand at the end of the period was 16.7% lower than the corresponding period (including goods on the water, total inventory was down 9.1%). Inventory levels decreased at a faster rate than sales, which is testament to a merchandise assortment that was in high demand. The group's sourcing strategy and its ability to respond quickly to changing trends within season is built on strategic relationships with its long-standing supply base. This partnership approach enabled the group to work closely with suppliers to exit low demand categories and increase stock levels in high demand categories, ending the first half with clean stock levels.

The credit environment remains under pressure. Transunion's Consumer Credit Index reported deteriorating consumer credit health again in Q2 2020. The National Credit Regulator (NCR) report noted a spike in account arrears as well as the rejection rates on new accounts reaching an all-time high. The group received 27.3% fewer account applications over the period and the approval rate decreased by 310bps to 30.1%. The total debtors' book decreased 7.7% as credit sales and write offs deteriorated in line with the market. The group has therefore raised its impairment provision from 10.4% at the end of FY20 to 15.2% at the end of H1 FY21, in response to its modelled expected losses. Collections channels were significantly impacted in

April 2020 by store closures (approximately 80% of collections) but have subsequently improved monthly. Collections as a percentage of the debtors' book have recovered and are now in line with the prior year.

COVID-19 TRADING INSIGHTS

Following the lifting of the level 5 lockdown restrictions, in the period May to September 2020 ("Post Lockdown"), a range of relief mechanisms from government (additional social grants and repo rate cuts) and the private sector (bank payment holidays and retrenchment packages) aided consumer expenditure. Household discretionary income flowed into the food, drug, apparel and homeware categories as entertainment, travel and liquor were curbed by restrictions.

Post Lockdown, Mr Price Apparel, Mr Price Home and Sheet Street (divisions representing 83.1% of the group's retail sales) grew sales 4.5%. The group gained market share over the period with market share levels in the months between June to September 2020, the highest in three years.

During the Post Lockdown period, the group has capitalised on several trends:

• Consumers' appetite for credit is low, preferring to transact in cash. This has favoured the group's cash-based model, with cash sales growth of 6.4%, accounting for 85.5% of total sales. Credit sales decreased by 12.1%.
• Consumers still prefer to shop convenient locations compared to large shopping centres (although foot traffic has subsequently increased). The group's diverse store footprint has been a competitive advantage and its micro, small and medium stores continue to perform strongly.
• Due to less frequent visits to physical stores, consumer transactions have declined but basket spend per transaction has increased by double digit levels.
• Online sales grew 71.5% (PY 19.4%) and accounts for 2.5% (PY 1.5%) of the group's sales. Website traffic (web and app) increased 78.6% with the group holding the second highest share of traffic among its omni-channel competitors, according to Similarweb. This is a significant achievement considering the group only has six online brands. Further to this, according to Google trends, "Mr Price has been the most searched apparel retailer in South Africa over the last 5 years". Mobile is an increasingly important online channel and accounts for 65.7% of the group's online turnover. The group's mobile traffic grew 97.5% and received a new apparel order every 51 seconds (PY 1 min 39 secs), highlighting the importance of the group's continued investment into its digital capabilities.